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My wife just told me about 50,000 in hidden debt.

Community Leader
Valued Contributor

Re: My wife just told me about 50,000 in hidden debt.

I'm more thinking that if you can save your credit (especially since you have the income) it will help.  Having 1 person keep their credit intact is better than both of you ending up with credit counseling or something along that line on both reports.  If you can fix your credit, then you can start working towards lower rates and ways to save money while paying off the debts that are left in her name.  The problem is that even with the $10,000, you're going to be in the negative.  Paying off high interest rate cards is going to be difficult and very costly.  Improving your credit will hopefully open the door to some 0% balance tranfer options or fixed rate personal loans which could potentially save you thousands of dollars.



EQ 679 EXP 700 TU 763
Frequent Contributor

Re: My wife just told me about 50,000 in hidden debt.

Unless you lower your monthly bills and still spend years paying all this back you should talk to a bankruptcy attorney. Either way your credit is shot for a while. Currently 527. Will take years to get utilization down to bring scores back up. Your scores will recover quicker from bankruptcy.
Last app 1/2/2017.
In the garden until at least 6/2/2017.
Contributor

Re: My wife just told me about 50,000 in hidden debt.

For what it's worth I applaud you for the respect you show for your wife.  my humble opinion is bankruptcy as an absolute last resort.  I haven't ever gone through a bankruptcy but I hear its terrible.  I also don't see anything wrong with taking out a 401 K loan to give you some breathing room.  It will free up the monthly payment amount to start tackling other debts.  It's a slow and steady process but I as long as you stay current on your cards as the utilization goes down you'll see your scores respond.  So far you're taking a huge hit for Utilization, and probably AAoA, and the 2 late payments.  UTIL and AAoA will improve over time as you pay these cards down.  and the lates aren't major and won't hurt as much over time as well.  My 2 cents is take out teh 401k Loan and pay off the Discover Card, and whatever else you can that will free up as much money on monthly payments. Then attack smaller cards that you can pay big chunks on to pay them off using the money saved from the other monthly payments.  Get current on the Credit One cards as well.  I agree with the previous poster that said to keep them open for UTIL purposes only, but do not under any circumstances give them to your wife.  change the passwords to all of the accounts if you have to.  Addiction is a terrible thing, and you cannot enable, but I do appreciate how you're standing by her. 

 

THere is no perfect way and everyone will have an opinion.  THis is just mine

New Contributor

Re: My wife just told me about 50,000 in hidden debt.

No kids and I assume she is physically able to work yet she does not work while racking up debt

You blame yourself for not being "aware"?

Credit cards taken out in your name that you do not know about. ?

Bankruptcy attorney? I think you are looking for the wrong type of attorney...

Good luck though.
Frequent Contributor

Re: My wife just told me about 50,000 in hidden debt.

Think of it this way.

Pay those debts down at $1,000 a month and it will take 50 months. That's over 4 years. It would be 2 or 3 years before your scores get back to decent.

Or you file bankruptcy and you bank $1,000 a month in savings. At the end of 50 months your scores will be in the 700's and you'll have $50,000 in savings. Bankruptcy is not that bad at all. Your scores will be in the mid 600's within 12 months.
Last app 1/2/2017.
In the garden until at least 6/2/2017.
Moderator

Re: My wife just told me about 50,000 in hidden debt.

OP didn't post asking for marriage counseling so let's keep any and all posts on topic and following these guidelines Friendly, Supportive, Respectful

 

If you can't respond directly to the OP's questions, then don't post.  They have come here for credit advice so stay focused on that area.

Established Contributor

Re: My wife just told me about 50,000 in hidden debt.

I would freeze my and hers  credit. I would to get my name off any unauthorized cards asap.  I would be looking at either getting a 2nd job myself and/or having her go to work asap.  I would payoff any cards i thought I might want again ie Disco so if I did have file bk they would not be included and after bk would let youget new cards however watch timing if you have to bk.  Next step cut all living costs to bread and water only.    The money I was putting in 401K now goes on debt payment.     You have a tough situation and it will take many months of inter strength. I think I read where Chase let a person close cards and pay off over 5 years at 0% maybe some will let you do that 

Contributor

Re: My wife just told me about 50,000 in hidden debt.

Backwoods makes some awesome points... freeze your credit reports so no more new cards can be opened... and you might call those store cards that you don't need and see if you can close them and pay them off over time without interest.

Valued Contributor

Re: My wife just told me about 50,000 in hidden debt.

I wouldn't take out a 401k loan.  It won't make a dent in your debt and if you switch jobs you will owe all the money back immediately or you pay huge tax and penalty.  Bankruptcy won't help you with taxes but could wipe out that credit card debt.  

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Established Contributor

Re: My wife just told me about 50,000 in hidden debt.

At this point, I'd very, very seriously consider filing bankruptcy (as well as other actions to help your wife reduce exposure to temptation to feed her addiction - because that's what you're dealing with here, addictive behavior, and going into counseling to deal with it is the fundamental step forward for her - such as freezing your credit reports to make it impossible for her to apply for any more cards). This is a situation where the best thing you can do is wipe out whatever you can through BK and start over again. Don't take out any further loans, and especially do not cut into your retirement if you can possibly avoid it. If taxes are an issue, contact the IRS and your state and/or local tax agency and see what you can do about getting on installment plans to repay whatever's owed; in certain circumstances the government will even temporarily suspend collection actions on back taxes if you can demonstrate severe financial hardship, but you need to communicate with them about the issue.

Ch 7 BK discharged 12/14, well along in rebuilding credit. FICO 11/2/17:TU 660/EX 694/EQ 688 FICO 8 (Aug 2017) or 680 FICO 9 (Penfed Sep 2017), VS 3.0 11/7/17: TU 704/EX 690/EQ 697. $32.3K revolving credit as of 11/7/17; $951 Cap One secured Platinum MC, $2000 Apple FCU Platinum Visa,$3500 Amazon Prime Store Card, $3500 Walmart Store Card, $3500 Cap One Quicksilver MC, $3600 Discover It, $4000 Care Credit, $4300 Overstock Store Card, $7000 Penfed Power Cash Rewards Visa, $10k PenFed used car loan, $5k Navient student loan. In the garden again from 10/26/17 for at least the next 3 months unless I get a really really good preapproval.