Just found out the wife ran up some serious credit card debt

All you need to do is enter and win the Loudon Classic. This is like an 80s movie plot writing itself.

http://forums.13x.com/index.php?threads/ok-we-have-to-talk-about-the-loudon-classic.380398/

(Sorry for your issues and best of luck)

 

BTDT. I went through Consumer Credit Counseling services many years ago to get a situation similar sorted out. In the end...got rid of my money problem...(25k three different times). Been great since. Imagine that.

 

THIS! The debt is the easy part, it’s just a math problem. I like Dave Ramsey’s debt snowball instead of taking out debt to pay off debt.

More importantly I’d get some counseling. If you’re a churchgoer see if you can find a church offering Re Engage. It helped my wife and I tremendously when we were at our worst.

 

Maybe someone needs a J-O-B. Or a second one to pay off her CC tally. Good luck getting it paid off ASAP. Sounds like you know your options.

 

I would echo the sentiments that if you had created the debt together, it’s a mutual problem to address.

However, since she did it without your knowledge, there is a bigger issue (trust, etc) to address beyond the financial debt & that issue is hers to rectify.

You “fixing it” for her simply presents the opportunity to do it again.

Good luck, not an easy situation to be in.

 

You really need to get to the bottom of this. Frankly, you even typing that line makes me wonder if subconsciously you know this is bound to repeat itself.

And no offense, but if you don't make enough to support what she views as the lifestyle she's "entitled to", you're just going to spin your wheels until she finds a guy who can support her "properly" (to be clear, that's "properly" in her eyes, I'm making no judgement here).

 

Never borrow to pay off debt. You need to increase income, and decrease spending. Have a car worth money? Sell it, and drive something cheaper. Have some un-needed recreational vehicles? Sell them. Sell anything that you don’t need. Ditch the smart phones. Eliminate any monthly bill that isn’t necessary to survive. Start living off of beans and rice. You will need to make lots of sacrifices to successfully clean this up in a hurry. When you have debt, you have to think like every paycheck that you earn, isn’t yours, that money belongs to someone else. Again, DO NOT borrow any more money to try to pay this off.

 

Thanks everyone, it really means more than you know to read the well thought out responses. Honestly I was dreading getting on here and reading the hard truths but I do appreciate it. To address some of the questions:

What was she spending on, how didn't you notice? She doesn't spend a ton on clothes, lavish things, it's more of what 418 said, "death by a thousand cuts". Lots of eating out, fast food, ordering delivery food. We have two kids in multiple sports/music, I suspect she was putting a lot of their expenses on credit cards. Putting living expenses on credit cards etc. We take one vacation a year, I'm sure some spending from that went on credit cards. Ultimately I let her handle our finances and didn't have a good grasp on what was going on. I also DO have credit card debt, but it's literally 1/10th of what she has and very easy to knock out. In fact, I'll pay it off in the next two weeks, having said that I am accountable as well for similar behavior, just not on the grand scale she's taken it to. Also, I have a bunch of tangible assets I can sell at anytime, she has virtually nothing to show for all this debt. I have (4) older sport bikes all paid for. I've seriously contemplated selling at least 3 of them to make a dent in this mess

Seems to be the general consensus is not to take on debt to pay debt but hear me out. Right now we pay $719/month in just pure credit card interest. Total CC payments are $1200/month. This are all cards she's run up. Conservatively we have 160K equity in our house, would get a 40K home equity loan. Total payments would go from $1200 to $400 so free up $800/month to pay towards this debt. Also, instead of lighting $719 on fire each month in interest, we'd only be throwing away $274. (insane, I know) Knowing some of the details, does this sound feasible? While increasing your income (taking on a 2nd job etc) is a good idea it takes some time to get going. Plus you only net 70% after taxes of every dollar you make. My thought was that this was a fairly quick way to minimize the interest we piss away every day/month/year. Thank again for listening to all this.

 

It's embarrassing but we've been to two of his speaking engagements in the past and have the books. Evidently has gone in one ear and out the other. Oh, and actually went to that financial peace university class for a bunch of sessions about 8 years ago. Just remembered that. It's sad.

 

I bet you right now I could tie you for embarrassment. Hence the reason I’m at a serious “d” crossroads……..and that doesn’t stand for dick

 

Bitcoin!

(j/k. Sorry for your troubles.)

 

It's not a scam. It makes perfect mathematical sense. Get rid of debt with high interest rates in exchange for something with lower interest which in turn means you pay off your debt faster, given that you pay a fixed amount each month. I was in that exact situation in my early 20s. Had 3 credit cards with something around 25% interest rate each, that were almost all maxed out and because of the high interest rates on all of them, I was barely making a dent in the balance I owed. So I got a personal loan at 8% interest and consolidated that debt. Paid off the credit cards with that loan and then I slowly paid off the loan which was easier to manage. Learned my lesson but was able to dig myself out of it.

 

Every once in a while I think I gotta get out of my 20+ year relationship. I mean my wife eats in the bed, leaves the passenger floor board in her G-Wagon a hoarding mess. Gets mad when I have more than 6 motorcycles.

And then You guys post up your love lives....

Ok, I'll stop looking at 2 bed condos on Zillow. I'll put away the calculator to figure out my divorce settlement. I'll stop looking for bike number 7 and I'll brush the crumbs off of my side of the bed.

 

You should sell all four, to be honest.

 

Seriously. This place puts a lot of things in perspective.

 

There needs to be pain in the repair this or the behaviors that got you here won't change. You've already admitted to being shown the way out via the Ramsey method but were unwilling to put it into action. Borrowing against your house to reduce the pain isn't going to lead to a success and will likely just put you in danger of losing the house.

Beans and Rice, Rice and Beans as the saying would go. He would also tell you no one is racing any more, no one is participating in the activities that caused the debt until it is cleaned up and that means suffering the embarrassment of telling your kids that the party is over for now. This may help them retain the lesson and avoid this mistake in their future. I'll be the first person in my family tree to ever retire before they died. Comfortably and well before retirement age. Again, it is a lesson learned from experience. The wife at least got some financial sense passed on from her grandfather and as we have been working in the same direction for the last 24 years post my stupidity, we have prospered more than either of us ever thought possible.

 

There are a few different options that might help, but in reality, you are living beyond your means. This will not be quick or easy. Your biggest problem isn’t the debt, its the spending. The home equity loan might solve some interest problems, but it won’t solve the spending problem. The debt is merely a symptom of the real problem. You NEED to cut down on the spending. Making the minimum payments will never get you out of this. You need to sit down, write up a budget of “necessity” bills, and deduct that from income. Every other cent needs to go into paying down this debt. Without changing the spending problem, even if you were to get this debt payed off, you are going to end up in this situation again. A second job will absolutely help, every little bit helps. 70 percent of something is a lot more than 100 percent of nothing.

 

If you think you can stop the excess spending, even though many others say not to, I would do what you said and get a lower interest rate loan off my house.

If you and your wife can’t stop the extra spend, then that is a bad idea because it may cause you to lose that house over time.

I’ve always paid off my credit cards in full every month. Fortunately my parents taught me that, but from what I understand, once you are paying interest on a card, every purchase has no grace period and starts accumulating interest charges from day 1.

I agree with selling the bikes and other stuff. Other than winter coming upon us, which generally depresses prices, used cars and bikes are still pretty expensive historically.

The huge recession that may already be here, will most likely really depress prices, so you have a good opportunity to move out those items at a higher value than they will probably be worth in another 12-24 months.

 

Most of these "consolidate debt" places give you a better interest then have a huge closing and admin fees and then extend the length of your loan to lower the payment to make it more "manageable". In the end you end up in the same boat.

I wasn't talking about going out and getting your own loan.

 

Think of it this way, are you 100% positive this is the last time you're doing this? Because if you're not, then you just smoked your equity out of your house for nothing.

Having her sit there and pay this off down slowly and painfully might be the lesson you both need. For you it'll be easy to let your guard down and think things are fine and then you're up the shit creek again.

I would try to get a personal loan, do not touch the house.