Just got Married, Wife has 12k in credit card debt

[bclizzle]

So my wife and I got married last month. About 11 months ago, she was 2-3 months away from finally graduating and getting her degree (30 years old, went back to school). She was struggling with the work load of a full class schedule, and crazy bartending hours, plus hated the bar tending gig. I had her quit to focus on school and get it done. I paid the majority of her bills. What I didnt know until months later was that she was still using her credit cards for god knows what even though she had no income source. Fast forward to now, her total debt on 4 cards is about $12,000.

Im taking every penny from the wedding and I want to kill this debt the best I can.

My questions are... Obviously I dont have enough to cover all of it. I know I can call and negotiate, settle for less, and potentially get all of it done for 8k (I think anyways). The mortgage is in my name. I have good credit, and income. I really dont foresee any time in the next 5-6 years ill need her to be on any of our loans if we take them. So part of me isnt that worried about beating up her credit right now.

But again, I dont even know if this is the best approach.

I guess I dont really know where to begin. So any help would be appreciated.

side note (she hasnt made any purchases on any of these cards in 4 months or so. Shes making minimum payments.

Im in the process of finding out exact balances and interest rates. I can post when i get them if needed

[disneysteve]

First thing, have the two of you opened up about all financial issues? Are you sure there is no more happening behind the scenes that you don't know about?

As for trying to negotiate a settlement, if she has been making the minimum payments consistently, they probably won't do anything. Unless she can convince them that she is unable to afford the payments, why would they settle?

If you have $8,000 available to put toward the cards right now, send off that payment today. Then the debt drops to $4,000 and you can keep chipping away at that as fast as you can.

[disneysteve]

Also, you mentioned that she was 2-3 months from finishing her degree. Did she finish? Is she working? How much is she making?

[Jluke]

Can she sell or return anything she bought? Doubt it but worth asking.

4 cards
Option 1: pay down/off the smallest balance(s) first

Option 2: pay down/off the card with the highest interest rate.

Option 3: consider a transfer to a 0% card.

Make sure she contributes and/or pays you back.

[disneysteve]

Make sure she contributes and/or pays you back.

This is debatable. It depends on how they are handling their household finances. If they are making everything joint not that they are married, there's no payback involved.

My wife and I do everything jointly. There's no "mine" and "hers". It's all "ours".

[snafu]

Congratulations to you both as newlyweds. I'm guessing DW graduated as expected early in 2017 and is now working. Is she on board with your plan to focus on clearing this debt? What is her attitude towards personal money management and debt? Was there anything purchased that is no longer used or needed that could possibly be sold to free up sums to put towards debt? Does she anticipate a major refund of income tax? Is it possible to change her tax deduction for the final quarter to better reflect actual earnings and tax payable to free up more dollars to pay down CCs as quickly as possible?

Since she has maintained minimum payment, what prevents transferring the debt to either 0% CC or very low rate a Line of Credit and putting every possible dollar earned to wiping this out PDQ? The risk of moving to 0% card remains the super high interest that results if she fails to pay the balance by the final date.

[LivingAlmostLarge]

Congratulations. Before doing anything what is the status of your financial awareness between you?

[bjl584]

First thing that I would do, as others have mentioned is to get on the same page financially. It sounds like she was handling things in a way that you weren't aware of. Now, it just smacked you in the face. Avoid having that ever happen to you again.

The creditors won't negotiate if you've been making payments to them.

What is your wife's income status? Is she working? Did she finish school?

[~bs]

my opinion falls in line with steve's. if you're married, and especially if you were aware of the debt already, it's your debt too. I suppose you could attempt to "penalize" her by making her go on a budget diet to pay for her own student debt. Not sure how well that would go over with her though. lol. More realistically, you should work towards paying off the debt together. After all, you are married.

[TexasHusker]

Three other things to remember if you end up in divorce court one day:

1. What's hers is hers.

2. What's yours is half hers.

3. Don't forget 1 and 2.

[msomnipotent]

It worries me that she didn't tell you about the credit cards. I had credit card debt when I was engaged. My husband knew all about it because we both knew that he was ultimately going to be paying it. I had to quit my job to move to his house, so I had no way to pay. I wasn't enjoying retail therapy, though. My cat had cancer and I had to spruce up my condo to sell it.

Personally, I would not do anything to hurt her credit score. You never know when you will need it, and she could just add to her debt while thinking, "Well, my credit is already shot, so why care". It is better to pay it off correctly and teach her (if she doesn't know) how to budget wisely. Act as a team so both of you feel responsibility towards the debt.

[Mikehills101]

You have to talk it out and settle with a budget allocation for her debt. If you don't have enough funds to pay it in advanced let say half of the debt, then start saving for the debt. Not only you but also your wife need to save money for that particular debt. The only way is to have another income or job or better yet cut off any unnecessary things to buy.

[scfr]

Im in the process of finding out exact balances and interest rates.

I think this is where you need to begin (finding out the exact balances and interest rates).

Other immediate steps I'd recommend are, in this order: 1) Setting up regular chats with your wife about your finances and 2) Jointly coming up with a budget that will incorporate your debt pay-down plan (which you can't do effectively until you know exactly how much is owed).

For married folks, when it comes to financial success, constant communication and being on the same page as your spouse are probably the most important ingredients. This doesn't mean you have to agree on everything, but you do have to keep talking and you have to come up with plans that work for both of you.

[bclizzle]

hey all, sorry for delay in getting back. Tons of great feedback here, so let me try and answer the questions and comments I seen

first. yes she graduated in December 16. Started at Enterprise in February. Moved over to Progressive in July. Missed about 10 working days due to wedding and honeymoon (unpaid).

Shes at about $44k. Im making her contribute the 6% to here 401k because they match up to 6% and Im not giving up that free money, especially to retirement. Its only about $90 a pay from her check.

Second. I wouldnt say she "hid" it from me or anything like that. I think it was a combination of her being scared to death of my reaction, mixed with her being so unaware of how quick interest racks up. I truly believe she only thought she was about $8k in the whole. It is actually closed to $14k once i got in there and tallied it all.

She had some lates and delinquencies throughout that run. Last week we made payments to each to at least get paid up to date.

The first thing I want to do is see if they will waive any lates. Between the 4 cards I think I counted over $1k in late fees.... Id love to try and get some of they reimbursed, is that something they ever do?

So is this the suggested route? from Jluke?

Interest rates are all the same between the 4.

Im going to try and get late fees taken off if i agree to pay X, worth a shot.

pay off smallest ones first, then start throwing largest chunks possible each month towards the remaining?

also, with her credit history, i cant imagine she will qualify for a 0% card. So would I have to open it? can i transfer her balances to my card? whos the best 0% card? discover?

[disneysteve]

Im making her contribute the 6% to here 401k

Your choice of words here is very concerning. It suggests that the two of you are not on the same page and are not working together on your finances. You didn't say, "We decided to have her contribute 6%."

pay off smallest ones first, then start throwing largest chunks possible each month towards the remaining?

If the interest rates are all about the same, that makes sense. Knocking out the smallest debts first helps simplify things and reduce the number of debts you need to keep track of and the number of payments you need to make each month.

also, with her credit history, i cant imagine she will qualify for a 0% card. So would I have to open it? can i transfer her balances to my card?

You can definitely transfer her balances to your card. If that's the way to knock down the rates, go for it.