My Wife's Debt - Should I Pay It?

[bee]

I just found this thread and I read almost every post here. I just wanted to let you know what I did this past November when I had collections call us regarding three cell phones that dh had in his name for him and our two daughters. The total bill was for $2400, I told them that I would get back to them asap. I did research on the internet on bankrate.ca regarding debt collectors and realized that I could indeed negotiate with them. I called them back and asked if they would settle with $1800 in a money order, this collector made it quite clear they would only accept a cheque even though I was not comfortable with the idea because of our account information on it etc...

I did send them a cheque but at the bottom of the cheque I wrote this "By cashing this cheque constitutes payment in full."

They never did send me this in writing but I do have the cheque to fall back on if they should ever say I did not make the payment agreed upon. I hope this helps

I am living in Quebec as well

[Goldy1]

I agree the money is joint. Like it or not, that's the way it is. I don't benefit directly from the money by husband spends on bowling, and he doesn't benefit from the food I buy that only I like and eat, but we are a team.
I feel communication is important. I know it's easy to say we are a team when we have similar frugal money values.
I think hiding purrhases is a sign of serious shopping/buying addiction. Obviously the bankruptcy didn't teach her a lesson. I mean, didn't getting into that jam stress he rout enough to make her realize "stuff" isn't worth the peace of mind? Or does bankrupcy foster irresponsibility b/c the debt is erased?)or so I think it would be, I don't know too much about it)

[disneysteve]

What is the current status of the CC debt? Is it all in collections or is any of it current? Break that down for us with interest rates and minimum payments.

So far, the situation really doesn't seem terrible. You are earning almost $200/month more than you are spending, not counting the debt payments. Plus, your budget includes quite a bit that can be trimmed out at least temporarily until the debt is taken care of (Cable, Gifts, Misc. Luxury, Charity, etc.). And you've got $9,000 in savings, which exceeds your current debt.

I think if you guys tighten your belts, cut the fat out of the spending and dip a little into savings, you could have this debt gone within 2 years tops and still maintain an emergency fund. I think this is very fixable.

[SnoopyCool]

NCO Financial. Grrr.... I've dealt with them before. While you are trying to figure this out, consider writing them a cease and desist letter, sending it to both the office that is contacting you AND their HQ in Penn. Have them send you proof that you owe the debt (an itemized statement) - just to buy time. This will at least give you time to figure out what you need to do and if they contact you again after they've received the letter they can be fined somewhere in the ballpark of $1,000 per infraction (send letter certified mail).

Good luck.

NCO Help

[beta decay]

Whether morally and legally I think you should pay the debt is totally irrelevant if you have no money with which to pay it.

Well, I do technically have the money to pay the debt in full. But that would leave us to live paycheck to paycheck. We can afford it, but we would have to hope nothing bad happens. That's one big reason I'm very stressed out about the idea of paying it. It's also a big reason my marriage came close to divorce. If I had loads of money it would just have been a trust issue that we could work out. But this is our lives we're playing games with, so it's very stressful to me.

This isn't very relevant right now, but I remembered some no-mercy type of thing NCO said, and figured I'd repeat it. When NCO Financial called my wife one time to get her to pay she told them she can't afford it. They responded with something like "Well you're feeding your kids aren't you? You're paying rent aren't you?" I just wanted to get that off my chest. Anyway...

I think we need to start over and treat this as a typical debt thread. List your income and all of your expenses and let us see the big picture and see if we can come up with suggestions about how to handle the debt, trim expenses, boost income, negotiate with creditors to reduce the amounts owed, etc.

I cannot continue with the 55 hours a week anymore. It's not a matter of doing what I have to do. I simply can't do that much on average anymore. It drains me too much. Last year's average work week is going to be much more than it will be this year. I think 45 hours per week is what I will be going for this year.

I'm listing things here for the whole year, not weekly nor monthly. Many things are estimated of course. Our household has two adults and two children.

42,000 Estimated Gross Income (this year)
6,000 Income (other sources)
48,000 Total Gross Income
7,000 Income Tax/Social Security/Whatever else is a required deduction from paycheck
41,000 Total Net Income

12,000 Rent
5,000 Grocery Food
4,800 Medical Insurance
3,000 Medical Bills/Co-pays Not Covered By Insurance (Between 2,500 and 6,000 but I'll estimate 3k)
2,000 Gas For Cars
1,800 Life And Income Disability Insurance
1,500 Gas (Heating/Stove)
1,200 Electricity
1,200 Car Insurance (Both Vehicles)
1,100 Internet/Phone/Cable TV
1,000 Auto Repair
1,000 Misc. Items (soap, toilet paper, etc)
1,000 Clothing
700 Gifts For Holidays
500 Misc. (excise tax, unexpected expenses, everything that doesn't fall into another category)
300 Misc. Luxury
300 Charity
200 Cell Phones
200 Restaurant/Take Out
38,800 Total Estimated Spending
2,200 Total Estimated Savings

7,000 CC Debt

900 Medical Bills Unpaid (not overdue, but simply not paid yet)
9,000 Savings In Bank

(I tried to line everything up but I don't know how. I put spaces before 3 digit numbers so they line up with 4 digit numbers, but posting for some reason takes the spaces away.)

[disneysteve]

I guess that explains why you think I should pay such an incredibly large sum of money and regard it simply as my obligation.

My income is enough to support my family, but barely. A $7,000 debt to pay is outrageous. It is not some small amount that I stubbornly refuse to pay.

Whether or not I should pay the debt is very far from a small decision.

Apparently, I misunderstood your original post, and I apologize for that. The title of the thread is "SHOULD I pay it?" You didn't write, "My wife has debt and we can't afford to pay it. What should I do?" That is a very different question. Whether morally and legally I think you should pay the debt is totally irrelevant if you have no money with which to pay it. I think many of the responses, mine included, have been addressing whether or not you are obligated, as her husband, to pay the debt. But that really isn't the issue. It isn't a question of whether or not you should pay it. The issue is that you are unable to pay it and still put food on the table.

That changes the entire thread in my mind. I think we need to start over and treat this as a typical debt thread. List your income and all of your expenses and let us see the big picture and see if we can come up with suggestions about how to handle the debt, trim expenses, boost income, negotiate with creditors to reduce the amounts owed, etc.

[beta decay]

...probably because you treat her like a child.

If by that you mean I restrict her access to the family funds, then I do. I have somewhat recently been restricting access and simply giving an allowance as a desperate measure to keep my family off the street and under a roof.

Maybe you feel that since you provide the income for the family you get 100% say in how it is spent.

No. I don't even want a 50% say. The arrangement used to be where I made money and my wife had 95% control. After working 55 hours a week for too long and still often running a negative balance in our checking account I realized I needed to take control or lose my mind.

In my opinion that approach has backfired on you.

Possibly. Things aren't working so well. Maybe I would have been better off losing my mind (and job along with it), and living off the negative $100 in our checking account.

You need to relax your grip on spending and allow her more freedom, not less.

I had allowed that freedom in the past, and we never had money. After I recently took control, contrary to what you think I should have done, we started to save money like we never had before.

...he's added substantially to the...damage to her credit rating.

Thank you for that complement, but it's undeserved. I didn't do it intentionally, but it turns out to have worked for the better. A higher credit limit would only make things worse, so it's a good thing I avoided that.

I'd advise her to leave him. Obviously he's got her on a tight leash with an allowance and no money for anything else. Is she his wife or his slave?

Yes, she is my slave. She works 55 hours a week to pay the bills, and will now be taking over my debt for me. Or, umm, wait. That's the other way around actually. I work 55 hours a week...

Didn't he notice items appearing that she bought?

Yes. If a piece of jewelry, for example, would appear I would question it. The answer would be reasonable sounding, like it was a gift to the host of a Tupperware party (well, actually, in this case it was called a jewelry party). If she bought a new piece of clothing for $100, she might simply say it was on sale for $12.

Sounds like he held the purse strings so tightly after that she was forced to betray his trust to be able to spend a dime.

Please don't waste my time anymore with your worthless diatribe.

You should pay it...and be done with it so that you both can move on with your lives.

I would like it to work that way. I don't know if spending all of the money I've saved over the past few years should be spent that way though. Doing so could, given a little bad luck and loss of job, destroy my family. We have very little, and nothing to fall back on.

You get a divorce. To me, hidden spending like this is equivalent to having an affair.

That sounds quite different than your previous post. You seem to be saying I should pay the bill, the whole amount (not some smaller settlement amount), because that is my obligation to the cc company and to my wife. Then after paying all my money to the company I should divorce my wife because of a monetary affair? I cannot see any understandable consistency in your ideology.

...I was earning about 65K...Three years later, I was earning about 130K...

I guess that explains why you think I should pay such an incredibly large sum of money and regard it simply as my obligation. That is because you don't find it to be a large sum of money. It may take me 2 years to save up $7,000 but it would take you no time. I appreciate that you posted to offer help, but I think you live in such a different world than me you can't possibly know what it's like to have such little and also such a large debt. The idea of simply paying it because it's owed is far more than you think it is. Have you ever eaten ketchup packets for dinner? Have you looked in the garbage, hoping someone threw away half a pizza. Have you ever actually entered a dumpster? I've worked 55 hours a week for years. It's only 1/4 of the way through the year and my wife's medical bills so far are about $2,000 (not counting the portion that insurance pays for.) My income is enough to support my family, but barely. A $7,000 debt to pay is outrageous. It is not some small amount that I stubbornly refuse to pay. It took me years to save up that much money. I have been hiding a disability of my own so that I won't lose my job. I desperately need to see a doctor, but if I do I will lose my job, and will have to settle for half the pay working a cash register. My family would be on the street in no time. I would then lose my children, and all of our lives would unravel. Whether or not I should pay the debt is very far from a small decision. It is a life changing decision if some small chance has it's hand against us afterward.

As for the OP's question, the worst that can happen is that your wife gets sued, a judgement is rendered against her and, should she fail to pay, that judgement may be executed against her assets. Does your wife have any assets?

Thank you very much. Finally a simple and to-the-point answer to a question of mine.

My wife has no assets.

As for you, did your wife forge your signature?

No. But my name was attached to the credit account without my knowledge, and it negatively affected my credit report. I spent many hours dealing with Capitol One over this. I told them that I hadn't signed anything, and had not agreed to anything, so it's not right that my credit report be affected. They said that they don't need my permission to add me to the account. All they need is a request from the primary account holder. After too much stress I finally was able to get them to remove my name from the account. After that I filed to have my credit report fixed. It was.

If you decide to stick it out, you'll have to let go of resenting she did this, and any expectation she'll pay it back.

I don't have any expectation that she will pay, since she has no income. If I resent her still I don't think it would be hard to get rid of that resentment, provided I could trust her not to do this again. Though I really have no way of knowing if I can.

[thekid]

That is a very important distinction. When my wife and I got married, I was earning about 65K and she was earning about 20K. Three years later, I was earning about 130K and she became a SAHM for the next 10 years earning nothing. If she had to support herself, that couldn't have happened. We agreed early on that she would stay home and raise our daughter. There was never any question about that. Even after she returned to the workforce, she has never earned more than about 10% of what I earn. Leaving each of us to fend for ourselves financially would be ludicrous.

Completely agree Steve. This isn't a one size fits all. Some arrangements work for some circumstances and some for others. Ours works well for us and yours for you. That's all I've meant to say, that depending on circumstances and personalities, a "split finance" arrangement works very well (even better) than a fully communal arrangement.

We plan on having kids very soon, my fiancé plans on returning to work, but at a reduced schedule. I may well have to pick up a heavier percentage of the load, that's only fair in my book as she would pick up a heavier load of the child rearing. Then again, her assets may make that moot, but sure the point remains that in a marriage, each partner should contribute as per his/her means for communal items (and non communal items if they so wish).

[disneysteve]

Honestly though, this works because, like you and your DH, we both have the means to support our own selfs.

That is a very important distinction. When my wife and I got married, I was earning about 65K and she was earning about 20K. Three years later, I was earning about 130K and she became a SAHM for the next 10 years earning nothing. If she had to support herself, that couldn't have happened. We agreed early on that she would stay home and raise our daughter. There was never any question about that. Even after she returned to the workforce, she has never earned more than about 10% of what I earn. Leaving each of us to fend for ourselves financially would be ludicrous.

[thekid]

Thekid,

You sound like my DH and I. We both keep separate finances (and have 1 joint account which is just for expenses like rent, utilities, food, etc.). We each put our 1/2 into that, but beyond that things are separate. We both wanted it that way and are both very independent people. To me this just feels natural. I've never combined finances with any previous partner either (I was 36 when I married him, so we both had long histories before then). Both of us take care of our own finances, and both earn enough to support ourselves.

PS - We are probably the happiest couple I know. We like this set-up. I have never had an argument with DH over money (or any of my exes to be honest) at all.

Pretty much the same for us. I'm a bit more of a spender than she is, so when I want something "communal" that she feels is too much...I pay for it...when we both agree, we pay 50-50 (same goes for her "communal wants").

Honnestly though, this works because, like you and your DH, we both have the means to support our own selfs. If it wasn't the case, the arrangement would have to be different in that contributions to communal goods would have to be on an uneven split percentage (if not 100%-0% if one did not work or have assets). Also, if one partner has significantly higher means than the other and kept a higher "lifestyle", there could be problems.

But for "modern" couples with similar means, this works perfectly.

[DebbieL]

Thekid,

You sound like my DH and I. We both keep separate finances (and have 1 joint account which is just for expenses like rent, utilities, food, etc.). We each put our 1/2 into that, but beyond that things are separate. We both wanted it that way and are both very independent people. To me this just feels natural. I've never combined finances with any previous partner either (I was 36 when I married him, so we both had long histories before then). Both of us take care of our own finances, and both earn enough to support ourselves.

PS - We are probably the happiest couple I know. We like this set-up. I have never had an argument with DH over money (or any of my exes to be honest) at all.

[thekid]

I'm Canadian too. My thinking falls in line with what Thekid has posted. I am also a very modern woman and have never depended on a man for anything financial so that probably contributes to my thought pattern too. I personally would never want to be in a position where someone else felt they needed to take care of or be responsible for me.

My fiancé and I are getting married in a few months. We both have sufficient means to take care of ourselves and have always operated with separate accounts and finances. Since we bought a house, we have a joint account and joint CC card we use for household expenses and keep the rest of our finances (including savings) separate. Prior to getting married, we have also decided to sign a marital contract opting for a "separation of goods" regime to govern any break up. In Quebec, this means, if we break up, I keep what is mine and she keeps what is hers except for 4 categories of goods (which we can't by law decide before hand not to split the value upon separation -those being i) primary residence, ii) other family residence, iii) pension fund and iv) furniture). So far, we've paid for those items 50-50 (except for the pension fund, but we both have one).

I'm an attorney and make a good salary. My fiancé is a teacher and comes from a wealthy family and has considerable assets. Nobody "needs" the other financially, so this seems to be the fairest way to go about it. I do whatever I want with what's mine, same for her....we share in our joint expenses.

At the same time, we are extremely close and are very family oriented, with very strong family values.

I don't think one thing has anything to do with the other.

This also reflects my vision of a "union", which is something like this: [me][US][her]. Some spheres are communal (our home life, couple life -including shared interests, hobbies and friends- and future family life), some spheres are her space (her career as a teacher, her hobbies and friends), some are mine (my career, sports I play and friends). We don't become "one" person, we are two people joining together for communal projects through shared affection.

[thekid]

thekid - That's very interesting. It is quite different than the way things are done here in the US and just a very foreign concept to me, having lived my whole life with a very different view of marital responsiblity. I realize different cultures do different things. In my mind, there are no "private obligations" within a marriage. Everything is joint, so the system you describe wouldn't apply.

I get the same slight "culture shock" at times here too. Interesting these little differences. We sometimes feel like our way is the only way that makes sense, I know I get that. Pretty cool to have discussions and see other points of view. I certainly enjoy it.

[DebbieL]

I'm Canadian too. My thinking falls in line with what Thekid has posted. I am also a very modern woman and have never depended on a man for anything financial so that probably contributes to my thought pattern too. I personally would never want to be in a position where someone else felt they needed to take care of or be responsible for me.

[disneysteve]

thekid - That's very interesting. It is quite different than the way things are done here in the US and just a very foreign concept to me, having lived my whole life with a very different view of marital responsiblity. I realize different cultures do different things. In my mind, there are no "private obligations" within a marriage. Everything is joint, so the system you describe wouldn't apply.