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Spouse wants to separate, my debt repayment plan is now changing, significant short-term debt relief

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Re: Spouse wants to separate, my debt repayment plan is now changing, significant short-term debt re

@CapitalPrime wrote:

Hello Everyone -


I'm going through a separation with my spouse.


We are high income earners (almost $350k gross annual combined, I account for 67%).  However, also in a significant amount of installment debt due to both a medical issue and some other serious non-disclosed issues in the relationship.


Mortgage and car loans are all reasonable payments.  I can afford these on my own.  Including my home utilities & upkeep.  There are two mortgages on the home.  The second is a home equity loan which was used to consolidate even more installment debt.  While my credit soared for some time after this loan (2021), it's now going into the low 600s.


The plan has been to refinance the primary mortgage and take out yet additional equity in order to repay installment loans equating to approximately $95k.


More urgently, however, is what I would call loan shark "loans" from various online lenders that equate to just over $30k.  The interest rates vary from 35% - 300% from what I can see.  Some are in my name and some are not.


We have both recently receiving an influx of cash.  I am attempting to formulate a plan that uses the money wisely.


  1. Am I best to contact a credit consolidation company?   It's highly unlikely that I would quality for a consolidation loan but rather a negotiated settlement under one single payment that I can split with my spouse.
  2. The most urgent issue to address are the short-term "sharks" whose payments draw more than our net-monthly income.  Am I able to settle these and stop paying them, staying employed and working through a credit consolidation company?

Any other helpful advice would be greatly appreciated.  Thank you!

As a guy currently going thru this myself who had several secured and unsecured debts with a credit score sub-500 at the time things went south, I think the crucial question before anything else is:  have you consulted/met with a family law attorney?  If not, do that FIRST, with all details of your finances; assets, liabilities, past taxes, budget, what you owe, to whom, how much, etc.  If your wife asked for the separation or it was a mutual decision, you can bet that she already has. 


The key is that any financial moves you make are in line with your attorney's advice and advantageous to you and your wife agreeing on a separation agreement (depending on the requirements of your state of residence).  In my case, money/finances is a HUGE issue and I don't own nearly what you do.  Even if only your name is on a deed, title, loan whatever, depending how long you've been married it likely is considered JOINT assets/debts.  Without an attorney's guidance, it can be a minefield and if you make moves on your own, you could be hurting your case should things go ugly.  


Just my .02

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