What a Mess

[Oldman124]

Hello all,

 

 

I am very new at this so would appreciate any help available.

 

 

The long and short of it is, that I have just found out my wife has run up debts by taking credit cards out in my name,

without my knowledge,

and has been paying the minimum payment on all of them,

thus incurring interest, to the extent that my account is maxed to the overdraft limit every month.

She finally told me about this as my mortgage finishes in September and I will be unable to pay it off.

 

 

As I was unaware of this until this week, am I liable for all the debts (including past interest paid)

or is there anything that can be done to solve this mess?

 

 

Having read through these forums it does seem I am in a better position that many as I do have employment and am bringing in an income each month.

My wife is not on my account, in fact does not have a bank account herself.

She is also not on the mortgage.

 

 

I am due to retire in three years, and there is no possibility of repaying all the debts in that time.

 

 

I can sustain the minimum payments, but the debts will not be cleared in my lifetime and it is making me ill with worry.

 

 

Can I explain to the credit card companies what has happened without penalty to my wife?

 

 

What to do???

 

 

Any help appreciated.

[BazzaS]

Why can you not pay your mortgage? (Repayment? Endowment??)

 

That needs to be your priority, over and above any unsecured debts.

 

 

Priority debts include taxes, utility bills and secured lending.

 

 

Unsecured lending (even their "minimum payments") should take second place, especially if you never took out the cards!

 

Only you can decide if you want to take on the responsibility for these debts to shield your wife from the consequences of her actions, or reveal her actions to the card companies

 

If you reveal her actions you could insist they go after her, or make an offer of token payments, asking them to freeze all interest.

[silverfox1961]

Hi and welcome to CAG.

 

Indeed, a mess!

 

This matter is going to take over your life if you let it. Your mortgage is the most important thing to deal with. You don't say whether the final payment is a lump sum or just the usual payment to end the mortgage. Either way, if you are going to have difficulty, contact the provider.

 

As for the other debts, these are unsecured and as such, not so important. You could write to each creditor asking for breathing space to get your finances sorted or asking them to accept token payments in the interim. If you inform them that this was a fraud perpetrated by your wife, they may involve the police.

 

As you don't seem to want this, you will have to accept the debts are yours and deal with each creditor accordingly.

 

The downfalls will be your credit file in the future. If you are planning any big purchases on credit, an entry on your credit file will likely have an impact.

 

The next thing to find out is why your wife did what she did and maybe a referral to her doctor to assist.

 

There are many other bodies out there that can help. National Debtline being the one I would go for.

[Oldman124]

Hi and thanks for the replies.

 

 

The mortgage was an endowment one that, like many others, when it matured did not entirely cover the amount owed.

It is only a small amount, £3,300, but as I have no savings and cannot save that amount by September, it is still worrying.

 

 

At the moment as all the minimum payments are being met each month, there is nothing to suggest I am in debt crisis

so was thinking perhaps I could remortgage to cover all the debts (including the £3300 for the final mortgage payment they amount to around £28,000)

and repay this over a period of 8-10 years.

 

 

At my age (62) I am able to retire at 65 and will be receiving an income (private pension and government pension) of the same amount as I do now, so would be able to make repayments for a re-mortgage if I do not have the credit card debts.

 

 

Am I likely to get a re-mortgage at my age?

Any advice greatly appreciated.

 

Also, the irony is that if I do nothing at the moment except keep on paying the minimum payment on the credit cards,

I will have enough balance on one of them to pay the mortgage off,

but this will incur more interest and hence more debt for the future.

 

 

I am worried though that if I speak to my bank regarding a re-mortgage would it cause them to look more closely into my finances

and then not only turn me down, but withdraw my overdraft facility.

 

 

Is this likely?

 

 

Any help appreciated.

[silverfox1961]

Under the rules laid out in the CoBS sourcebook, banks have a duty to treat customers fairly-even though it may be detrimental to themselves.

 

The mortgage is the most important thing so that needs dealing with first. If you contact the other creditors and offer a smaller sum as an 'Arrangement to Pay' rather than token amounts then they should mark your credit file accordingly and not a default. You could even try asking the credit card companies for a payment break of say 3 months allowing you to service the mortgage.

 

With the mortgage, ask for a couple of months extra to clear it. They may be able to help. If you have a bank account with the same bank as your mortgage, I would suggest opening another account elsewhere as banks have been known to dip into accounts to pay off other debts.

 

Being as open as possible is the better option and of course you don't want to 'dob' your wife in.

 

If the bank do remove your overdraft facility, this will put you in the position of incurring charges for being overlimit. This, I would feel would be unfair.

 

It is very difficult to say what a bank may do but if they treat you unfairly, you will have grounds for complaint.

 

With the cards. cut them up! Write to each provider using the letters in the library and see what they come back with.

[Oldman124]

Thank you Silverfox.

The mortgage account, a credit card and the overdraft are all with the same lender who I have been with for over 25 years.

I was unaware of the credit card being issued, and the overdraft limit was upped without my knowledge, as everything was done on line.

 

 

I also have a loan from them which I was aware of and have 12 months left from a five year agreement,

which has been paid every month without fail.

 

 

Should I approach my bank and see if, as this loan has been repaid without problem,

could I increase this loan to cover my overdraft and mortgage and then contact each creditor with regard to a break in payments?

Or,

should I contact the credit card companies first in case I am refused further borrowing and would have a bit more disposable income to put into my mortgage account?

 

 

If I contact the credit cards first,

will my bank be made aware of this and thus realise that although I have no defaults at the moment,

this may well change shortly?

 

 

I am inclined to contact the bank before the credit card companies,

but would appreciate any comments/help before I do anything.

Many thanks.

[Oldman124]

I do have another current account with a different bank which has been dormant for some time, but is still open and appreciate the information given with regard to a second account.

[silverfox1961]

Contact the bank first, explain your issues and ask for a payment break/extension,

 

The unsecured creditors should still be contacted but the bank is your immediate priority.

 

As you have a credit card and loan with the bank, they have the right off any payments from your current account so you will need to ask that they do not do this as it will push you further into financial difficulty.

 

I would get any money coming into the other account, just make sure that they haven't closed it if it has been dormant for too long.

 

National Debtline can assist with budget planners.

 

https://www.nationaldebtline.org/EW/information/dealing-with-creditors/Pages/default.aspx

 

Have a read and follow the links to the planner. This will ensure you will know how much you have to play with.

[Oldman124]

Thank you Silverfox, I will contact the bank tomorrow morning to make an appointment and will check the other account is still up and running. I am very grateful for your prompt replies and will post further on my progress when I have more information. I do appreciate your help very much.

[aburobert]

Personally I would be most cautious with the credit card companies. If they get any whiff of financial problems they have a habit of immediately doubling or trebling your interest rates with a view of defaulting the accounts with the maximum they can get owing.

 

This happened to me a few years back - they were most unsympathetic and their actions drove me deeper in the 'doo doo' when, with a little leeway, I could have dragged myself into maintaining and clearing the accounts I had. My problems were due to emergency surgery and convalescence where I needed a three month break of payments.

[silverfox1961]

Personally I would be most cautious with the credit card companies. If they get any whiff of financial problems they have a habit of immediately doubling or trebling your interest rates with a view of defaulting the accounts with the maximum they can get owing.

 

This happened to me a few years back - they were most unsympathetic and their actions drove me deeper in the 'doo doo' when, with a little leeway, I could have dragged myself into maintaining and clearing the accounts I had. My problems were due to emergency surgery and convalescence where I needed a three month break of payments.

 

There is a way out of this. When a credit card company increases the APR, the customer has the right to reject it. The effect of this is that no further purchases cannot be made but the preceding APR stands until paid off.

 

Any charges levied on credit cards can be reclaimed and once a bank has been informed of hardship, any charges could also be reclaimed on hardship grounds.

 

One thing I have to reluctantly admit. Debt Collection Agencies! When they take on a debt, all charges and interest should stop. You just have to hope that the debtor gets one of the fairer ones (if any are out there)

[Oldman124]

Hi again,

while I'm waiting for my appointment at the bank to see if I can sort the mortgage out,

something occurred to me that I don't quite understand.

 

 

From reading other posts on here, am I correct in thinking that the following steps are taken

 

 

- (1) write to creditor asking for payment break/interest frozen.

(2) If refused, stop payments and ask for original CCA. Is this correct?

 

 

The reason I ask is that as these debts were incurred by my wife, and not to my knowledge. I haven't signed any agreement.

 

 

They have all been done on line - requested, and accepted with no signature asked for.... is this the way it is done now?

 

 

Just a bit confused .

[dx100uk]

well I wouldn.t stop payments until they fail the CCA request

 

 

but if these were online applications post apr 2007

this could prove difficult.

 

 

dx

[silverfox1961]

Since April 2007 there is now no longer a need to provide agreements as proof of the account being used is enough. Also, electronic signatures are quite acceptable nowadays so no 'wet ink' signature is required.

 

If you challenge the fact that you never signed for the cards, this will involve the creditors fraud department and quite possibly the police (if the bank chooses to report it) As I understand it, you don't want to drop your wife in the doo doo so while you could tell the creditor that it was your wife, you would still have to accept the responsibility under the risk of dropping your wife in it.

 

The words rock and hard place come to mind!

[Oldman124]

Thank you both, as you can probably tell I am a bit of dinosaur when it comes to what can and can't be done through a computer, although I am glad of the help on here and am learning as fast as an Oldman can!

[theoldrouge]

dont worry too much about your mortgage, your bank must treat you fairly, as per PRIN principle6

 

plenty of options, have a read of the link below

 

Never swap unsecured credit onto a mortgage, there are many ways of dealing with these issues

 

http://fca.org.uk/static/documents/guidance-consultations/gc13-02.pdf

[tony3x]

As a mortgage broker I must point out that you must not do anything to jeopardise the ability to get a new mortgage. This means do not miss or reduce payments on the credit cards until you have sorted the mortgage out. High St lenders will not consider you at all if you have missed payments within the last 12 months (some are 24 months).

 

Depending on who you bank and the level of your pension income with I can give you a good idea on the likelihood of getting a new mortgage for an increased amount - PM me if you want me to have a look. Lenders base everything on affordability now and most will be not go past age 75 although there are some smaller lenders that will lend to 85. Your bank should treat you fairly regarding the small amount that you have outstanding though.

 

Technically it is correct not to turn unsecured credit into secured credit but as you rightly point out it will take years to repay the credit cards at minimum payment so in this instance I would consider trying to add them to the mortgage as you will be on a much lower rate.

 

If you are unable to increase your mortgage you may want to consider a lifetime mortgage as these are not income based. Some also allow you to make monthly payments

[silverfox1961]

I must point out the inherent dangers of dealing with this matter via PM. It is something NOT recommended.

 

tony3x you have been here a while so please respect the rules

[tony3x]

Sorry silverfox. Would not have dealt with by PM, just felt that any income details or the name of the bank would be better private. I would have put my answers on the thread.

[Oldman124]

Thank you both for your replies, I appreciate the help.

 

 

As you say Tony 3x until I have spoken with the bank I will leave the credit cards alone and just carry on with the minimum repayment.

 

 

Hopefully the bank will be understanding and will be able to suggest the best course of action

- either a re-mortgage to cover the entire debts or at least an extension to the existing mortgage left.

 

 

I am intending to tell the whole sorry mess to the bank representative and pray he/she will be sympathetic as I have banked with them for so long,

and up until the last few years have never been in debt. be it overdrawn or credit card.

 

 

I would say, to be fair to my wife, she did ask me to take over the finances a while ago, but in my infinite wisdom

I thought she would enjoy taking the responsibility as she had given up working due to medical reasons

and was not only more computer literate then I, but also had more time to deal with them.

 

 

Hindsight is a wonderful thing as they say, I just wish it could be bottled !!

[tony3x]

Technically your wife has committed fraud so be very careful what you say to the bank as you only have to talking to a jobsworth and it could be reported. As I said lenders base everything on affordability and generally are not very flexible on criteria, loyalty does not seem to count for much these days. Gone are the days when a bank manager could make a decision on lending, it is all done by computer.........so its normally yes or no. Some of the smaller lenders still use manual underwriting so take each case on its merits.

[theoldrouge]

I would also be very wary about what you say to the bank

 

there are ways of dealing with this, one due to your age being lifetime mortgages as already pointed out

 

if you are not too worried about inheritances etc

[Oldman124]

Hi there, I am hopefully seeing the bank next week, as I have discovered that gone are the days when you went to see a bank manager, and my local branch does not have anyone who can discuss re-mortgaging with me, so will be asking about an extension. In the meantime, I have letters to the credit card companies asking for the interest to be frozen and that I am able to offer a token payment for the time being. On reading back through the help I have received on here, I am now in the process of sending CCA letters, but I must admit, I have no idea how this helps? What is the reason for requesting this if everything was done on line? What do I look for when I receive them? Thanks again.

[theoldrouge]

word of warning, once you enter into any form of reduced/token payments to the cc companies

 

it will show on your credit file, and any chance of loans/ remortgaging will be gone

 

 

you need to think carefully, dont send anything prior to your bank visit

 

have a read of this link, it shows how banks and dca,s must treat you

 

http://fshandbook.info/FS/html/FCA/CONC/7/3

[Oldman124]

Hi, have just spoken to the bank regarding an extension and am being sent the forms to fill in.

 

 

I haven't send the letters to the credit card companies yet and will hold off until the mortgage sorted.

 

 

Hopefully, this will be done quickly so I know where I stand regarding an extension.

 

 

I was just wondering what the normal response from credit card companies was to freezing the interest and recouping the already paid interest?

Also, the likelihood of them agreeing to pay off in instalments the original credit amount.

Any information would be gratefully received.

Thank you.