(Closed) Just found out FI is in a load of debt. Now what?

posted 9 years ago in Money
  • poll: How much debt will you and your FI carry (NOT including mortgages)
    Nothing-we are debt free! : (95 votes)
    23 %
    $10,000 or less : (90 votes)
    22 %
    $10,000-$20,000 : (55 votes)
    13 %
    $20,000-$30,000 : (40 votes)
    10 %
    $30,000-$40,000 : (17 votes)
    4 %
    $40,000-$50,000 : (17 votes)
    4 %
    $50,000-$60,000 : (20 votes)
    5 %
    $60,000-$75,000 : (20 votes)
    5 %
    $75,000-$100,000 : (18 votes)
    4 %
  • Post # 62
    2430 posts
    Buzzing bee
    • Wedding: July 2012 - The Gables Inn, Santa Rosa, CA

    I have $55k in student loans, and he has $12k in auto loans, plus between $7-9k each in credit card debts (mostly from college). 

    BUT, we also make over $100k per year combined, and we just bought a house, so for us– this level of debt wont last long. 

    Post # 63
    218 posts
    Helper bee
    • Wedding: February 2012

    @WillyNilly:  My pleasure! I love them too, they totally helped save me mentally, emotionally, and financially! They are a good use of the non-profit sector. 🙂

    Some have said that hiding the debt is a form of deceit, and while I don’t necessarily disagree, having a lot of debt can also be EXTREMELY embarrasing. I was SOBBING over it when I finally told my DH (at the time BF), and at that point I had already taken steps to get my debt under control! But I was still so humiliated. It doesn’t make it right, but it just happens, even to the best of us! It doesn’t make her Fiance automatically a bad person, but yes, he DOES need to get it under control.

    From personal experience, sometimes the debt can feel so overwhelming that you just go into major denial mode and ignore it, cause thinking about it is so consuming. Does it help the problem go away? Of course not; it actually makes it worse. But it’s just sort of the way it works, unfortunately, until the person decides to deal with it. 

    Post # 64
    900 posts
    Busy bee
    • Wedding: July 2012

    I have a lot debt mostly because of school. he has some, but we never figured out how much. We want to get a house also….I just dont see it happening anytime soon.

    Post # 65
    12265 posts
    Sugar Beekeeper
    • Wedding: June 2011

    i have no debt and he had about 6k in student loans which i dont count because we could pay it off anytime, its just not worth it to pay it off since the interest is so low.  He has a 12 year old car that hes been driving for over 9 years and isnt into cars at all, which is a relief for me.  both our budgeting is exactly the same as your Fiance, we dont buy much, charge everything, can always pay it off and not really worry about budgetting for savings or emergency. for me, i could not be with someone with loads of consumer debt who wasnt on the same page with financial goals as me.  even early on dating we discussed our habits and finances.

    Post # 66
    2268 posts
    Buzzing bee
    • Wedding: May 2011

    I have about 6k and he has about 8k–but I also have a good bit in savings so I guess it sorta evens out. We’re currently attacking our debt on a monthly basis!

    Post # 67
    666 posts
    Busy bee
    • Wedding: August 2012

    We have fI’s truck and the debt we did just have was our trailer and razor that we paid off last week ($25,000) so the truck is it unless you consider our house.

    I don’t buy anything if I can’t pay cash for it. I have a credit card but it is strickly for building my credit. Same as Fiance, we pay cash for everything. 

    Post # 68
    909 posts
    Busy bee
    • Wedding: October 2012

    Wow, he should have been up front with you about that. My Fiance and I recently went over our credit history with each other, though we’ve always been open with each other about finances. 

    I am debt-free, but my Fiance has a little over $40K in school loans. He’s terrible with money, so he doesn’t even have a credit card right now (he maxed out his first credit card and had to close it and has only paid it off within the last year). We’re waiting till after the wedding to figure out whether we want to do joint accounts, etc., but I’m definitely the one who does the budgets. We may just keep separate accounts for a while.

    Post # 69
    239 posts
    Helper bee
    • Wedding: December 2013

    We sold my car last month, and are paying off bf’s car TODAY. (phew!)
    ((ETA: we each have 1 credit card, but they are for emergencies and thus no balance on them.))

    The debt ‘we’ carry is his student loans. He pays twice the pmt per month so should have those done in about 2 years. We have chosen to not merge finances. We share a house account checking and savings, but also have our personal accounts.

    We will probably have a pre-nup. Not because of trust issues or anything, just because we have both been burned in the past and also I bought the house we both live in, and supplied the down-payment.

    To OP: I worry for you. 🙁 It scares me that he did not tell you about this before you were already planning on getting married. This would make me very, very, very nervous. (And that you already own a business together, and he didn’t tell you about his debt? That is concerning)I hope that you are able to get a plan in place that protects you and your children, and that you do what is best for your family (that can include him too, if that’s what you choose.)

    Us bees are here for you!!

    Post # 70
    2567 posts
    Sugar bee
    • Wedding: September 2011

    Finding out about that level of debt just a few months before the wedding would be pretty close to finding out about another woman; the OP says she has asked her fiance about his finances several times and never gotten a straight answer. I don’t think I could trust my partner after a revelation like this.  We’re not talking $12 grand or something that one could reasonably pay off in a short while; this is a substantial amount of money, and it’s not so much the debt that would put me off but rather the lack of honesty. I would have serious questions over whether I could be in a long-term relationship or a marriage with this person.

    My Mr and I are carrying about $80k in debt, down from close to $100k a few months ago; we are not thrilled about it, but not crying ourselves to sleep either.  The lion’s share of that balance was for a new roof (absolutely needed, and our old roof was tin meaning they could not just patch the one area but had to rip the whole roof off and start over), solar panels (we decided if we were going to pay all the labor for the roofing, we might as well get the panels while the crew was already here), a new kitchen (completely unplanned expense and the reason we are buried but we had an opportunity to barter for the bulk of the labor), and the wedding. Based on our combined salaries and my annual bonuses, we’ll have that paid off in about 14 more months. We are ok with this but we also talk about our finances all the time.

    Post # 71
    737 posts
    Busy bee
    • Wedding: November 2014

    Yikes I could never marry someone so irresponsible with money. People should just not live above their means! It always spells trouble! And you say he is lazy and unmotivated…..yet you want him to be the provider (not you)? TBH, this doesn’t look like a good situation. You will always have to push him and he will never be sufficiently motivated to be the provider you need him to be. He may even come to resent all of your pushing. With your radically different philosophies, do you really think you’ll be happy long term? Not meaning to be harsh, just trying to give an honest assessment.

    It is one thing to have “debt” in the form of company investments for example, but this is just outrageous.

    Post # 72
    4394 posts
    Honey bee

    There are a lot of problems here, obviously. I would say the biggest problems are that he NEEDS a camero, you NEED a new car, and you NEED a house. No, you don’t NEED any of those things. You both NEED to live within your means. These things are wants, not needs. 

    Post # 73
    110 posts
    Blushing bee
    • Wedding: September 2012

    I have over 60K in student loan debt from grad school and a few thousand in other miscelaneous debt. I was very upfront about it with my Fiance though and we are very open with our finances. 

    Post # 74
    741 posts
    Busy bee
    • Wedding: June 2013

    I would actually hold off on getting married until you figure this out. Credit agencies can sometimes come after you, too, if you are married. And, like PP mentioned, they could take your house and business because he owns part of those. This is also a huge deal in terms of marriage, can you get past this and live with his spending habits for the rest of your life? I know I couldn’t.

    Neither Fiance nor I have any debt, even from college because of scholarships, so we are lucky in that respect. We have both agreed to do our best to stay out of debt unless it is for school, cars, and a mortgage. Basically those big purchases that better you down the road. That being said, debt in not insurmountable, but it will be if he continues this attitude about it.

    Post # 75
    1890 posts
    Buzzing bee
    • Wedding: April 2018

    $100k just seems like a staggering amount of debt to have to me… Especially since you say he got a $300k settlement in the divorce? That’s frightening.

    The other red flag is that… he doesn’t like to work? I could never marry a man like that. While I do want to work after my marriage, I need the comfort of knowing that my husband could support me if I wanted to take time off to have kids!

    You guys definitely need to have a talk about finances. No matter how much you love somebody, that kind of irresponsibility is too dangerous to overlook.

    Fiance and I will be debt free, but for what it’s worth, we’ll have almost nothing in the way of nice things for a while. We have to rent a home, not own it, and we really won’t be able to afford things like going out to eat all the time or expensive tickets to fun events.

    Post # 76
    99 posts
    Worker bee


    Honestly? If I were in your shoes, I’d be postponing the wedding until he: 1) sold the Camaro and liquidated all available assets and paid as much his debt as possible, 2) either secured a good-paying outside job OR a part-time job in addition to the business, 3) in conjunction with you, worked up a viable household budget that you both agree to & abide to and 4) along with that budget, had a repayment schedule for the balance of his outstanding debt to be paid off in 3 years or less.  Slice TV has a great show – Til Debt Do Us Part hosted by Gail Vaz-Oxlade.  Start watching it together and/or go to her website. She has free tools you can use to help map out a healthy financial plan.

    Another thing BOTH of you need to do, is learn the difference between “wants” and “needs”.  From one of your posts, I think you said your Fiance has $60K in car loans – which would be an entire year’s salary for him from your business.  As you’re virtually 50/50 in your business, then I think it would be fair to assume your HHI is $120K.  At that tax bracket, your take-home is about $7,300 per month.  Your $35K car loan, on a 5 year schedule at 0% would cost about $650/month.  Insurance approx $225.  For argument’s sake, say a tank & a half of gas a week on a 50L tank at $1.25/L – $100 a week or $430/month.  Don’t forget oil changes, windshield fluid, etc – say $20/month average on that. I’m already up to $1,325/month just for ONE car.  Or 18% of your after tax income.  Transportation shouldn’t be more than 15%. (Add his Camaro into the mix and you’re probably in the 30% (or more) range.)  My point is:  you didn’t NEED a $35K car.  You WANTED it.

    Likewise, you don’t NEED to buy a house.  You WANT to buy a house.  Again, using the $120K HHI, the upper limit of the mortgage you can comfortably carry is $360K.  If you can even pre-qualify, seeing as your business is still in its infancy.  But say that you do qualify:  once you add in taxes, heat, water, hydro, you’ll probably be over the maximum 35% recommended budget amount for housing.  Oh, wait, you’re 3% over on the one car loan already, so your debt load would be too high to qualify for much more than $350K.  I sure hope you have a lot of equity for the downpayment, because with 3 existing kids, you’re going to want a 4 bedroom, and good luck house hunting in Toronto when the AVERAGE detached house price hit $600K this spring.  

    And there’s still the $40K consumer debt to pay off (assuming he sells the Camaro).  Assuming he has average credit cards with a 19.9% interest rate, in order to pay that off in 3 years it will cost about $1525/month to do so – about 21% of your monthly HHI.

    Ok, let’s see now – 18% for your car, 35% for housing, 21% for debt repayment.  That leaves you $1900/month for everything else. Food, clothing, cell phone, tv, internet, vacation fund, savings, and “fun”. I doubt there will be ANY money for invitro, much less season’s tickets to the Jays.  Are you really sure you want to live this way due to his bad financial choices?  Ok, my numbers are probably nowhere near and probably way more dire than your real numbers.  I just hope you get my point.

    The other option of keeping your finances separate and making him responsible to pay off his debt. How will you feel if your man can NEVER afford to be able to do anything fun.  No money to go out for dinner. No money to go to a movie. No money to go on vacation with you.  Believe me when I tell you, I know of what I speak.  I’m in a post-divorce relationship with a man on his second-time around.  Once his child support and debt obligations are paid (lawyers bills and constant Section 7 expenses for the kids), there is VERY little left for him to live on.  I love travelling; he can’t afford it.  Even an every-other-year $650 week at a 3 star all-inclusive in Cuba is out of his budget.  Not a chance he could ever travel anywhere we can’t drive to with his kids.   However, the debt that he has, is NOT from overspending on wants. He’s ambitious at work; not lazy. And he has terrific potential.  And he’s RESPONSIBLE with his money and doesn’t spend out of his budget, and has a plan to pay it off within the next year & a half. If your Fiance isn’t able to make some hard financial changes, he will NEVER pay off his debt, and this will be your life for the next 50 years.  Another option is your Fiance being willing to hand over all financial control to you and live solely on what you determine his “allowance” to be (and whether or not you want to be his money “mommy”). If he doesn’t change his attitude OR allow you to have complete financial control:  I foresee financial disaster for the two of you.

    Before I leave you – a couple more things you may not know.  If your Fiance cashed in a ton of RRSPs – did he pay all the withholding taxes?  If not, he could be in more debt than you realize; and to the CRA to boot!  Secondly, should your marriage fail and you are in black with your marital assets – yes, they are divided equally.  However, should your marriage fail and you’re in the red:  the debts are NOT divided equally.  They are allocated to the primary on the account.  So, if he trashes his credit, and you cosign and/or add him to your credit cards – YOU’RE the one who will be on the hook.

    Please think through all the legal implications of FINANCIALLY marrying this man.  As much as I love my man and see how far he’s come in getting his shit together – knowing what I know about Family Law in Ontario, I really struggle with getting married vs. continuing to live common-law as if we’re married. 

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