Help: Husband's Surprise Debts

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
stanford73
Posts: 129
Joined: Tue Sep 11, 2018 1:05 am

Help: Husband's Surprise Debts

Post by stanford73 » Fri Nov 22, 2019 1:05 am

I hope I can get some candid advice.

My husband and I are in our late 60's and semi-retired working as consultants. I just discovered that my husband has not been setting aside money for quarterly taxes and owes the IRS $40k, which he is paying on a monthly plan. He also tapped our HELOC, without telling me, maxing it out at $80k. I feel a mix of emotions, but I am here hoping to get ideas on what to do financially.

Our house is valued at $950k with a $350k mortgage in an area that's appreciating rapidly. Rents are very high. We don't have much saved for retirement. $400k in a 401k; $50k Roth; $55K annuity; SS at 70 combined will be $4500. My husband has made anywhere from $60-180k over the past few years and I've made between $30k-60k/year as P/T consultant. My husband will be making much less money next year and my contracts end in December.In the last 5 years, we've taken a family trip to London for my son's graduation, but otherwise, we don't travel, have high mileage cars, etc. I was hoping to retire fully next year, at least that was the plan.

What would you do in my shoes? Thanks in advance.

EDIT
Here's our financial snapshot:

Emergency funds: Mine $3k DH: Zero

Debt: Mine: Zero debt DH: $20k credit cards

Tax Filing Status: Married, Filing Jointly

Tax Rate: 24% federal 4.6% state

State of Residence: Colorado

Age: 68


Current retirement assets

His 401k IRA rollover at Vanguard
70% in reserves
30% in stocks

His Roth IRA at Vanguard
None

Her 403b
TIAA $55 annuity

Her Roth IRA at Vanguard
100% Index Fund
_______________________________________________________________

Contributions

New annual Contributions None

Available funds

Funds available in his 401(k)
$400K

Funds available in her 403(b) & Roth IRA
$57k TIAA
$40k Vanguard Index Fund
Last edited by stanford73 on Fri Nov 22, 2019 1:01 pm, edited 3 times in total.

mhalley
Posts: 7765
Joined: Tue Nov 20, 2007 6:02 am

Re: Help: Husband's Surprise Debts

Post by mhalley » Fri Nov 22, 2019 1:56 am

Sorry for the situation, the finance part isn’t that terrible, but certainly isn’t great. The question is where did the money go? Simple living beyond your means, or is there something else, ranging from gambling, drugs, infidelity or mental problems, either psychological or mental deterioration like Alzheimer’s. He may need a physical exam. Once you get to the bottom of the problem, then you can work on the finances. You need marital counseling due to the communication problem in the marriage. You might need to postpone retirement, but without knowing your expenses it is hard to say. Paying the irs is a priority.

ohai
Posts: 1303
Joined: Wed Dec 27, 2017 2:10 pm

Re: Help: Husband's Surprise Debts

Post by ohai » Fri Nov 22, 2019 2:17 am

Hi, OP. Sorry to hear about that. While you are not exactly poor, it must be annoying to find that some 10%-15% of your net worth actually doesn't exist.

Assuming you don't want to take drastic steps (i.e. divorce), the first thing I'd do would be to draw up a detailed retirement plan. Determine how much you will have to save until retirement to support your budget. This will give you an idea of when you will be able to retire, and/or if it might make sense to sell the house and move somewhere cheaper eventually.

Also, obviously you are going to be more involved in household finances from now on. That means making sure bills are paid, monitoring income and expenses, choosing investments, and filing tax returns. You should also make sure that there isn't another surprise for you to discover.

I wonder why your husband had to take out the $80k loan, for example. Based on your household income and description of your lifestyle, I would think that you have enough income already.

Pacific
Posts: 1329
Joined: Tue Mar 06, 2007 8:19 pm
Location: Lost in the middle of the Pacific

Re: Help: Husband's Surprise Debts

Post by Pacific » Fri Nov 22, 2019 2:47 am

"He also tapped our HELOC, without telling me, maxing it out at $80k."
I'm not sure I understand this. Was he the sole signatory on the account holding the $$?

Also, do you need the home or could you downsize to a condo?

Something is missing here because there is no explanation of the purpose of him secretly spending so much money. I think you need to first discover the illness before applying the cure.

sd323232
Posts: 172
Joined: Thu Jun 21, 2018 4:45 pm

Re: Help: Husband's Surprise Debts

Post by sd323232 » Fri Nov 22, 2019 3:22 am

stanford73 wrote:
Fri Nov 22, 2019 1:05 am
I hope I can get some candid advice.

My husband and I are in our late 60's and semi-retired working as consultants. I just discovered that my husband has not been setting aside money for quarterly taxes and owes the IRS $40k, which he is paying on a monthly plan. He also tapped our HELOC, without telling me, maxing it out at $80k. I feel a mix of emotions, but I am here hoping to get ideas on what to do financially.

Our house is valued at $950k with a $350k mortgage in an area that's appreciating rapidly. Rents are very high. We don't have much saved for retirement. $400k in a 401k; $50k Roth; $55K annuity; SS at 70 combined will be $4500. My husband has made anywhere from $60-180k over the past few years and I've made between $30k-60k/year as P/T consultant. My husband will be making much less money next year and my contracts end in December.In the last 5 years, we've taken a family trip to London for my son's graduation, but otherwise, we don't travel, have high mileage cars, etc. I was hoping to retire fully next year, at least that was the plan.

What would you do in my shoes? Thanks in advance.
Sorry to hear that. I am Dave Ramsey show listener and he gets calls like that all time. This is more of marriage problem with financial infidelity being as a side effect. This may be a problem waaay beyond this forums help. You need professional help, because what your husband is doing is HUGE red flag (maxing out heloc without telling you???), those are huge amounts of money there.

minimalistmarc
Posts: 517
Joined: Fri Jul 24, 2015 4:38 pm

Re: Help: Husband's Surprise Debts

Post by minimalistmarc » Fri Nov 22, 2019 3:52 am

It’s personal but my wife would divorce me if I did this and hid it from her

fru-gal
Posts: 1271
Joined: Wed Jan 02, 2019 9:48 pm
Location: New England

Re: Help: Husband's Surprise Debts

Post by fru-gal » Fri Nov 22, 2019 3:53 am

I'm sorry this has happened to you. This must be very unsettling, to say the least.

I think the first thing to do is to lock down the finances as much as you can so that he can't take unilateral action. Besides that, if I were you, I'd manage the finances so you know what's being paid. Although that still leaves the possibility of things like his running up credit card debt unbeknownst to you. You may even have to check credit reports periodically.

Then find out why this has happened - a gambling addiction, dementia setting in. For that you may need a counselor of some kind.

Then I think you have to plan on working a few more years to get into better financial shape. How does your upcoming Social Security compare to your expenses, and what happens to the Social Security amount when one of you passes away (at which point expenses may be reduced, the house may be sold, etc, so that will also change.)

msk
Posts: 1443
Joined: Mon Aug 15, 2016 10:40 am

Re: Help: Husband's Surprise Debts

Post by msk » Fri Nov 22, 2019 5:35 am

I am assuming that husband is naively innocent but otherwise frittering away $, small amounts but often. DW was like that and then I discovered that she carrying $20k to $40k on various credit cards. Have a chat and tally up all the debt. If, like my DW, he'll probably not see any major issue. That's the tough part. You can try convincing him that it IS a problem, but in all likelihood you will not succeed. Walked with DW to the bank and paid off, and cut up the credit cards one by one, except for one that she might need to rent a car, etc. But as long as the other party does not see a problem, you'll just have to suffer the mess. From the spouse's point of view, you are fully solvent and credit is there to be used. No point in going to the grave rich. Have your chat, try to bring reasonableness into the proceedings. You will probably have to have another chat in a couple of years. Unfortunately. It's like being an alcoholic. No cure is possible unless the individual admits (to himself!) that there is a problem. Locking down the holec, etc. are only temporary solutions, but it's a start.

User avatar
Tamarind
Posts: 1866
Joined: Mon Nov 02, 2015 2:38 pm

Re: Help: Husband's Surprise Debts

Post by Tamarind » Fri Nov 22, 2019 5:47 am

Sorry this has happened to you.

Who owns the retirement accounts and the annuity? If it's you, OP.... Well let me say that this would likely be a divorcing offense for me, even if I thought the relationship would be salvageable. My priority would be end the possibility of the other person creating more jointly owned debt. If it's him, and you have little or nothing saved for retirement yourself, then you are in a much tougher spot.

Did your retirement plan already include selling the house and moving somewhere much cheaper?

User avatar
HueyLD
Posts: 7346
Joined: Mon Jan 14, 2008 10:30 am

Re: Help: Husband's Surprise Debts

Post by HueyLD » Fri Nov 22, 2019 6:05 am

stanford73 wrote:
Fri Nov 22, 2019 1:05 am
I hope I can get some candid advice.

My husband and I are in our late 60's and semi-retired working as consultants. I just discovered that my husband has not been setting aside money for quarterly taxes and owes the IRS $40k, which he is paying on a monthly plan.
If you file a joint return with him, his debt is your debt. Hopefully you and he can take care of this situation as soon as possible.

Shallowpockets
Posts: 1501
Joined: Fri Nov 20, 2015 10:26 am

Re: Help: Husband's Surprise Debts

Post by Shallowpockets » Fri Nov 22, 2019 7:14 am

$40k unpaid to the IRS. Where is this money going? $80k out of a HELOC. Where is this money going? Something is amiss here. You need to get yourself very involved in your joint finances. Need to ask where that money went?
How did you find out?
There needs to be an accounting. In detail. Or you are on a descending road into retirement.

aristotelian
Posts: 6671
Joined: Wed Jan 11, 2017 8:05 pm

Re: Help: Husband's Surprise Debts

Post by aristotelian » Fri Nov 22, 2019 7:33 am

Have him run a credit report just to make sure there isnt anything else out there that you don't know about.

sjt
Posts: 303
Joined: Fri May 26, 2017 3:03 pm
Location: NC

Re: Help: Husband's Surprise Debts

Post by sjt » Fri Nov 22, 2019 8:12 am

There are many beautiful LCOL areas you can retire to and be just fine.
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

DesertDiva
Posts: 696
Joined: Thu Mar 01, 2018 12:49 pm
Location: In the desert

Re: Help: Husband's Surprise Debts

Post by DesertDiva » Fri Nov 22, 2019 8:12 am

fru-gal wrote:
Fri Nov 22, 2019 3:53 am
I think the first thing to do is to lock down the finances as much as you can so that he can't take unilateral action.
yes, protect yourself!

User avatar
JoeRetire
Posts: 4448
Joined: Tue Jan 16, 2018 2:44 pm

Re: Help: Husband's Surprise Debts

Post by JoeRetire » Fri Nov 22, 2019 8:20 am

stanford73 wrote:
Fri Nov 22, 2019 1:05 am
My husband and I are in our late 60's and semi-retired working as consultants.

I just discovered that my husband has not been setting aside money for quarterly taxes and owes the IRS $40k, which he is paying on a monthly plan. He also tapped our HELOC, without telling me, maxing it out at $80k. I feel a mix of emotions, but I am here hoping to get ideas on what to do financially.

My husband has made anywhere from $60-180k over the past few years and I've made between $30k-60k/year as P/T consultant. My husband will be making much less money next year and my contracts end in December.
Time for both of you to put your plans on hold for a while.

Come out of semi-retirement and work full time until your debts are paid off and you can actually afford to retire.

And perhaps it's time for you to relieve your husband of financial duties, take over responsibility for paying the bills and the taxes. It doesn't sound like he is capable.

On the non-financial front, you might want to sit down and have a long talk with your husband regarding why he did what he did, where the money is going, and what you want to do about your marriage going forward.
Very Stable Genius

Leemiller
Posts: 1272
Joined: Sat Jun 01, 2013 12:42 pm

Re: Help: Husband's Surprise Debts

Post by Leemiller » Fri Nov 22, 2019 8:32 am

Something sounds off. Where did the money go? I don’t see how retirement on approximately 5k a month is possible when you’re spending so much more - and it’s hard to understand what the money was spent on. Frankly, it would be better if you could point to a new car or two. I think you need to dive into monthly expenses for the past year, including a review of bank accounts. I’m sorry you’re going through this. It really is a breach of trust. I would also run credit on each of you, just in case he still hasn’t disclosed everything.

User avatar
Sandtrap
Posts: 8638
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Help: Husband's Surprise Debts

Post by Sandtrap » Fri Nov 22, 2019 8:36 am

OP: you may get more actionable and comprehensive financial suggestions if you edit your original post to include more "numbers" in this format: (use the pencil icon for editing)

Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

As far as the husband's behavioral issues . . . . restructuring finances, etc, is for naught unless this is resolved.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

User avatar
HueyLD
Posts: 7346
Joined: Mon Jan 14, 2008 10:30 am

Re: Help: Husband's Surprise Debts

Post by HueyLD » Fri Nov 22, 2019 8:40 am

It may be time to hire a private investigator...

User avatar
CyclingDuo
Posts: 2822
Joined: Fri Jan 06, 2017 9:07 am

Re: Help: Husband's Surprise Debts

Post by CyclingDuo » Fri Nov 22, 2019 9:06 am

stanford73 wrote:
Fri Nov 22, 2019 1:05 am
I hope I can get some candid advice.

My husband and I are in our late 60's and semi-retired working as consultants. I just discovered that my husband has not been setting aside money for quarterly taxes and owes the IRS $40k, which he is paying on a monthly plan. He also tapped our HELOC, without telling me, maxing it out at $80k. I feel a mix of emotions, but I am here hoping to get ideas on what to do financially.

Our house is valued at $950k with a $350k mortgage in an area that's appreciating rapidly. Rents are very high. We don't have much saved for retirement. $400k in a 401k; $50k Roth; $55K annuity; SS at 70 combined will be $4500. My husband has made anywhere from $60-180k over the past few years and I've made between $30k-60k/year as P/T consultant. My husband will be making much less money next year and my contracts end in December.In the last 5 years, we've taken a family trip to London for my son's graduation, but otherwise, we don't travel, have high mileage cars, etc. I was hoping to retire fully next year, at least that was the plan.

What would you do in my shoes? Thanks in advance.
Even before you uncovered this unfortunate news, what are your current annual total household expenses?

If, when you hit age 70 in a few years, you'll bring in $54K of SS combined, how much of your risk portfolio (401k/Roth/annuity) will you also need to add to the $54K each year to meet your monthly/annual expenses?

The obvious has already been said upthread about open dialogue with your husband, some marital guidance on how to mend the financial woes, and get to the bottom of why he did not consult with you and where the money was going beyond the IRS taxes.

You still have $350K in mortgage debt, and now the additional $120K in IRS and HELOC debt for a grand total of $470K in debt. You have $500K in the risk portfolio (401k/Roth/annuity) and $600K in home equity.

Time to sit down and seriously consider as a couple how you can use your human capital shovels to shovel your way out of that $470K in debt with the few years you have remaining before retiring while keeping household expenses as low as possible. On the surface, it looks like if the combined income you were both bringing in during recent years ($180k + $60k), there was a money leak somewhere to not have built up a larger nest egg and to have incurred the additional $120K in debt during those years.

We don't have enough of the full story as to how this happened over the years, but would be curious what you uncover and how you as a team decide to fix it. All the best on developing a good plan and coming out of it all okay.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

Nowizard
Posts: 2428
Joined: Tue Oct 23, 2007 5:33 pm

Re: Help: Husband's Surprise Debts

Post by Nowizard » Fri Nov 22, 2019 9:08 am

If your husband knows of your concern and is willing to talk about it, you might suggest he read this thread and the comments. It could provide a path to resolve the issue, and it is often positive to "triangulate" with problem solving where you are discussing and debating about the opinion of others rather than your own with difficult topics.

Tim

aristotelian
Posts: 6671
Joined: Wed Jan 11, 2017 8:05 pm

Re: Help: Husband's Surprise Debts

Post by aristotelian » Fri Nov 22, 2019 9:33 am

CyclingDuo wrote:
Fri Nov 22, 2019 9:06 am

Even before you uncovered this unfortunate news, what are your current annual total household expenses?

If, when you hit age 70 in a few years, you'll bring in $54K of SS combined, how much of your risk portfolio (401k/Roth/annuity) will you also need to add to the $54K each year to meet your monthly/annual expenses?

The obvious has already been said upthread about open dialogue with your husband, some marital guidance on how to mend the financial woes, and get to the bottom of why he did not consult with you and where the money was going beyond the IRS taxes.

You still have $350K in mortgage debt, and now the additional $120K in IRS and HELOC debt for a grand total of $470K in debt. You have $500K in the risk portfolio (401k/Roth/annuity) and $600K in home equity.

Time to sit down and seriously consider as a couple how you can use your human capital shovels to shovel your way out of that $470K in debt with the few years you have remaining before retiring while keeping household expenses as low as possible. On the surface, it looks like if the combined income you were both bringing in during recent years ($180k + $60k), there was a money leak somewhere to not have built up a larger nest egg and to have incurred the additional $120K in debt during those years.

We don't have enough of the full story as to how this happened over the years, but would be curious what you uncover and how you as a team decide to fix it. All the best on developing a good plan and coming out of it all okay.
She said he made "$60-$180K" so the money leak may not be that dramatic. Agreed on all other points. She needs to audit all of his credit cards, bank accounts, etc.

(This is just speculation, but if he owns a business with variable income, I wonder if he was using personal funds to support the business, making it out to look like it was doing better than it was).

User avatar
Watty
Posts: 18052
Joined: Wed Oct 10, 2007 3:55 pm

Re: Help: Husband's Surprise Debts

Post by Watty » Fri Nov 22, 2019 9:52 am

stanford73 wrote:
Fri Nov 22, 2019 1:05 am
What would you do in my shoes?
Since you are already in your late 60s you cannot count on being able to work much longer.

In no particular order.

1) Have your husband get a good physical and go to it with him. Discuss with the doctor the possibility of early dementia since bad financial decisions can be a sign of this. This is not meant to be a snarky comment this is a real concern and it may not be obvious at first. By the time it is obvious there may be a lot of financial damage. In fairness you should get a physical too.

2) Get all three credit reports for both you and your husband and look them over for any surprises. You need to get yours too since things like credit cards could have been opened in your name.

https://clark.com/credit/free-credit-report/

2) Put credit freezes on all your credit reports so that no new loans can easily be opened.

https://clark.com/credit/credit-freeze-and-thaw-guide/

3) Review all your account statements so that you understand what is going on and from here on out you do all your finances and bill paying together.

4) Marriage counseling.

6) Figure out your plan for claiming Social Security here.

https://opensocialsecurity.com/

7) Even without the IRS problem you cannot afford your current house so you will need to move.

Now is a good time for that though since most housing markets are strong so it may be easy to sell the house at a good price. If you wait a few years to sell it you could end up forced to sell it in a really bad housing market. Your choices are;
a) Move to small condo or house where you live not but even that may be too expensive in places like the west coast or a large city in the North East.
b) In many cities housing is dramatically less expensive if you move 45 minutes farther out of town.
c) Move to a nice low cost of living area. There are lots of areas where you can get a decent home for $200K or a McMansion for $400K.

You may have family ties to where you live now but I would do "C" since you could buy a very nice home somewhere for $300K, have around $800K in savings, and soon have $4,500 a month in Social Security. With the Social Security you will also need to budget for living on one check if one of you survives the other.

student
Posts: 4298
Joined: Fri Apr 03, 2015 6:58 am

Re: Help: Husband's Surprise Debts

Post by student » Fri Nov 22, 2019 9:58 am

I agree with others who said that you need to have a complete overview to see exactly how much debts are there. Also, where did the money go?

User avatar
CyclingDuo
Posts: 2822
Joined: Fri Jan 06, 2017 9:07 am

Re: Help: Husband's Surprise Debts

Post by CyclingDuo » Fri Nov 22, 2019 10:07 am

aristotelian wrote:
Fri Nov 22, 2019 9:33 am
She said he made "$60-$180K" so the money leak may not be that dramatic. Agreed on all other points. She needs to audit all of his credit cards, bank accounts, etc.

(This is just speculation, but if he owns a business with variable income, I wonder if he was using personal funds to support the business, making it out to look like it was doing better than it was).
Agree.

Not enough information, but guessing their peak earning years may have included funding college educations (based on her comment of going to London for a college graduation), not having enough leftover income to save more than they did based on their lifestyle, high mortgage payment and property taxes, etc... .

Selling the home and using some of the equity to retire all debt, moving to a much lower cost of living area and lower housing costs (be it rent, a condo, small home) could leave them in decent shape if they downsized their lifestyle enough to survive on the SS and SWR from the remainder.

Regardless, the OP's story is a good lesson to everyone to utilize the decade or so leading up to retirement to have very frank discussions as a couple, be honest, be jointly involved in all decisions and be "in the know" with exactly what is going on regarding the household financial picture.

Until we all hear more from the OP - we remain in the dark regarding the entire picture.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

dknightd
Posts: 1930
Joined: Wed Mar 07, 2018 11:57 am

Re: Help: Husband's Surprise Debts

Post by dknightd » Fri Nov 22, 2019 10:12 am

How long have you been married?
Why have you not been talking about money, and retirement plans, before now?
Do you have an idea of what your expenses will be after retiring?
The level of debt is not horrible. I read $40k for taxes, 80k for heloc, 350k left on mortgage.
You might ask him why he has not been paying quarterly estimated taxes. You might also ask him why he tapped the heloc. There might be good reasons for both. It sounds like you need to talk to him about this, not us.
Your debt could be easily wiped out by selling expensive house and moving to a cheaper one.
Then your existing savings and SS might be enough to remain comfortable.

User avatar
Stinky
Posts: 2817
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Help: Husband's Surprise Debts

Post by Stinky » Fri Nov 22, 2019 10:13 am

CyclingDuo wrote:
Fri Nov 22, 2019 9:06 am
Time to sit down and seriously consider as a couple how you can use your human capital shovels to shovel your way out of that $470K in debt with the few years you have remaining before retiring while keeping household expenses as low as possible. On the surface, it looks like if the combined income you were both bringing in during recent years ($180k + $60k), there was a money leak somewhere to not have built up a larger nest egg and to have incurred the additional $120K in debt during those years.
This is excellent advice.

Beyond the obvious relationship issues discussed up thread, I’d be most concerned about what life style you can afford to carry in retirement - whether it be with your husband or without him.

I’m sorry for the emotional pain and betrayal that you must be feeling now.
It's a GREAT day to be alive - Travis Tritt

stan1
Posts: 8000
Joined: Mon Oct 08, 2007 4:35 pm

Re: Help: Husband's Surprise Debts

Post by stan1 » Fri Nov 22, 2019 10:21 am

What you need to do depends on the reason. I'd encourage you to get the medical, psychological, and legal help both of you might need as you work through the reasons. I would not recommend that you try to do it yourselves.

There can be hope. A distant relative found out that her husband (an active duty military officer) had a multi-year gambling addiction and had tens of thousands of dollars in debt. They sought help through counseling and he was honest about the problem to the military. They are still together, managing his addiction, and he was able to retire from the military with his pension in tact. Your situation will be different but I just offer that as a short example of hope in dealing with a complex problem.

rai
Posts: 1251
Joined: Tue Apr 06, 2010 7:11 am

Re: Help: Husband's Surprise Debts

Post by rai » Fri Nov 22, 2019 10:26 am

One time I lent a good friend $$ for a very short time like 4 weeks. This is a relatively small sum of money, but I didn’t ask my wife first, she was pissed. She would have said yes no problem, the money was trivial but she was mad that I did it without asking her first.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair

User avatar
celia
Posts: 9963
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Help: Husband's Surprise Debts

Post by celia » Fri Nov 22, 2019 11:09 am

The first thing I would do is jointly make a list of all your assets and debts with values attached and where the asset is and who the debt is owed to. Put it in black and white for both of you to see but realize that the first round may not be complete. There could be other things that don’t show up on your credit report.

The second step is to write down your budget. See where the money goes each month and where cuts can be made.

If you both look at it as a math problem, the emotions might not be so high.

Goal33
Posts: 1100
Joined: Sun Apr 12, 2015 12:30 pm

Re: Help: Husband's Surprise Debts

Post by Goal33 » Fri Nov 22, 2019 11:40 am

Not a financial topic
A man with one watch always knows what time it is; a man with two watches is never sure.

a_movable_life
Posts: 133
Joined: Tue Dec 20, 2016 9:33 pm

Re: Help: Husband's Surprise Debts

Post by a_movable_life » Fri Nov 22, 2019 11:49 am

Watty wrote:
Fri Nov 22, 2019 9:52 am

2) Get all three credit reports for both you and your husband and look them over for any surprises. You need to get yours too since things like credit cards could have been opened in your name.

4) Marriage counseling.
2) I second the check your own credit scores and also consider freezing them until this is all sorted out. I have had several women friends have their now ex-husbands or boyfriends open and use cards, accounts, or loans in their name. One of them is still digging out at 40 and another at 43. Right now stop the bleeding and attempt for future harm.

I'd even go so far as before confronting your Husband to make sure that you have money out of your joint accounts and change any direct deposits to an individual account. Keep that paperwork for that account at the office, or with a friend. I know a few people that when they knew they were caught they went to the bank and emptied the joint accounts and then either ran with it, spent it or hid it.

Then you are faced with making that mortgage payment and asking family and friends to help you out.

4a) Other people have discussed counseling. I'm hoping that what happened is that he overextended on a business deal. I had a couple in my office about your age and he and his brother went "all in" on what should have been the deal they retired on. One of the assets pledged was their home, They lost the home, she was rightfully furious and depressed, he was distraught and depressed.

For your sake I hope it is not drugs, or him trying to build his "Next act" with a different woman before he ends it with you.

I would also make sure that when you confront your Husband about this that people know where you are, to check in after, and that you have an escape plan. I know that sounds extreme, but one of the communities I am in just had a woman murdered by her boyfriend during an argument. Murdered at 32. I've hung out with this man.

birnhamwood
Posts: 65
Joined: Sat Jan 19, 2019 5:34 pm

Re: Help: Husband's Surprise Debts

Post by birnhamwood » Fri Nov 22, 2019 11:51 am

I would not live with a person I could not trust.

delamer
Posts: 9481
Joined: Tue Feb 08, 2011 6:13 pm

Re: Help: Husband's Surprise Debts

Post by delamer » Fri Nov 22, 2019 11:52 am

Ignoring the HELOC, IRS debt, and credit cards, you have a joint net worth of $1.1 million.

Subtract the above debts, and you have a joint net worth of about $950,000. At a 4% withdrawal rate, that’s $38,000/year.

At 70, together you’ll have $54,000/year from Social Security.

So a joint income of $92,000. If you sell your house and choose your new location wisely, you can live comfortably as renters.

But those are just numbers.

Only you can decide if you are willing to continue to live with someone who already has deceived you about significant sums of money. And only you can decide how likely it is that that behavior will happen again.

I’d certainly insist on taking full control of the family finances as a condition of staying in the marriage.

I am sorry you are going through this.
Last edited by delamer on Fri Nov 22, 2019 11:59 am, edited 1 time in total.

aristotelian
Posts: 6671
Joined: Wed Jan 11, 2017 8:05 pm

Re: Help: Husband's Surprise Debts

Post by aristotelian » Fri Nov 22, 2019 11:55 am

Goal33 wrote:
Fri Nov 22, 2019 11:40 am
Not a financial topic
She specified she is asking "what to do financially". Maybe there is nothing to be done but that is her question.

a_movable_life
Posts: 133
Joined: Tue Dec 20, 2016 9:33 pm

Re: Help: Husband's Surprise Debts

Post by a_movable_life » Fri Nov 22, 2019 11:55 am

Goal33 wrote:
Fri Nov 22, 2019 11:40 am
Not a financial topic
I know socially, heard from co-workers, or have had as patients at least 100 women where financial infidelity or gross incompetence by partners has undone years of saving, investing, and simple living.

So yes it's a financial topic.

Topic Author
stanford73
Posts: 129
Joined: Tue Sep 11, 2018 1:05 am

Re: Help: Husband's Surprise Debts

Post by stanford73 » Fri Nov 22, 2019 12:49 pm

Thank you all VERY MUCH for the thoughtful, kind and valuable advice. You are all wonderful for taking the time to reply. This is just what I needed to quickly get an objective third-party take on options and next steps.

I added more financial info above (as much as I could fill out), as requested.

To answer the questions raised above:

1. I've had financial discussions with DH in past years with regular "budget" sit downs that included spreadsheets he prepared of our income, expenses, budget items, etc. Those budget meetings trailed off in the last two years. The full extent of the debt (IRS, HELOC) was not included.

2. As for medical issues, my DH had prostate cancer surgery 4 years ago & is fully recovered; no signs of dementia.

3. Personal snapshot: Married 42 years. Three (wonderful) grown kids living near us. Purchased home 25 years ago (my inheritance funded $50k down payment). DH has had chronic unemployment issues, poor career decisions, etc. forcing refinancing of home twice to tap equity, family loans, bill collectors hounding us, etc. I've consistently worked either FT or PT to pay my personal expenses (car, clothing, etc.) plus kids' expenses (education, clothing, gifts, trips, etc.). Marriage counseling three times; consulted divorce attorney twice, but decided to stay in marriage for kids' welfare.

4. The HELOC was opened 5 years ago with both signatures. The understanding between us was that it would only be used for emergency situations. My DH tapped it unilaterally over that period of time for taxes and shortfalls in income to cover household expenses.

5. Although he has prepared and filed taxes every year, he hasn't paid taxes owed each year, so apparently there has been a running tab with the IRS since 2012. (I opened a recent IRS statement and discovered it.) His income fluctuates year-to-year and he found himself in a big hole (he says) when he made over $240k 3 years ago and paid zero taxes. In full disclosure, I've left the finances up to him--it's not my strong suit and he has an MBA--so I assumed all was being handled.

6. As for where all the money has gone, DH says " I spend nothing on myself" and it all goes to household bills and taxes. I don't know what money he's making or what he's spending it on, but I'm sure it's not infidelity, drugs, gambling.

I'm encouraged by a few of you who've said our finances are such that we can dig out from this situation. I spoke to DH this morning briefly asking him to put together a current spreadsheet, so we can have a candid discussion. He knows how I feel about the failure to tell me about these surprise debts. I'm also very realistic and practical--I know what cards I hold and what cards I don't hold, especially at this age and stage.

fru-gal
Posts: 1271
Joined: Wed Jan 02, 2019 9:48 pm
Location: New England

Re: Help: Husband's Surprise Debts

Post by fru-gal » Fri Nov 22, 2019 1:03 pm

stanford73 wrote:
Fri Nov 22, 2019 12:49 pm
Thank you all VERY MUCH for the thoughtful, kind and valuable advice. You are all wonderful for taking the time to reply. This is just what I needed to quickly get an objective third-party take on options and next steps.

I added more financial info above (as much as I could fill out), as requested.

To answer the questions raised above:

1. I've had financial discussions with DH in past years with regular "budget" sit downs that included spreadsheets he prepared of our income, expenses, budget items, etc. Those budget meetings trailed off in the last two years. The full extent of the debt (IRS, HELOC) was not included.

2. As for medical issues, my DH had prostate cancer surgery 4 years ago & is fully recovered; no signs of dementia.

3. Personal snapshot: Married 42 years. Three (wonderful) grown kids living near us. Purchased home 25 years ago (my inheritance funded $50k down payment). DH has had chronic unemployment issues, poor career decisions, etc. forcing refinancing of home twice to tap equity, family loans, bill collectors hounding us, etc. I've consistently worked either FT or PT to pay my personal expenses (car, clothing, etc.) plus kids' expenses (education, clothing, gifts, trips, etc.). Marriage counseling three times; consulted divorce attorney twice, but decided to stay in marriage for kids' welfare.

4. The HELOC was opened 5 years ago with both signatures. The understanding between us was that it would only be used for emergency situations. My DH tapped it unilaterally over that period of time for taxes and shortfalls in income to cover household expenses.

5. Although he has prepared and filed taxes every year, he hasn't paid taxes owed each year, so apparently there has been a running tab with the IRS since 2012. (I opened a recent IRS statement and discovered it.) His income fluctuates year-to-year and he found himself in a big hole (he says) when he made over $240k 3 years ago and paid zero taxes. In full disclosure, I've left the finances up to him--it's not my strong suit and he has an MBA--so I assumed all was being handled.

6. As for where all the money has gone, DH says " I spend nothing on myself" and it all goes to household bills and taxes. I don't know what money he's making or what he's spending it on, but I'm sure it's not infidelity, drugs, gambling.

I'm encouraged by a few of you who've said our finances are such that we can dig out from this situation. I spoke to DH this morning briefly asking him to put together a current spreadsheet, so we can have a candid discussion. He knows how I feel about the failure to tell me about these surprise debts. I'm also very realistic and practical--I know what cards I hold and what cards I don't hold, especially at this age and stage.
He;s not being honest with you, even when you try to have a discussion. He is likely not going to be honest with you in the future. Your kids are grownups; their welfare no longer depends on your marriage. You have already considered divorce. Do you really want this major stress and financial mess that threatens your retirement in your life long term? Or would you rather get divorced and be in control of your own life and your own finances.

I would be a nervous wreck if I were married to him.

rai
Posts: 1251
Joined: Tue Apr 06, 2010 7:11 am

Re: Help: Husband's Surprise Debts

Post by rai » Fri Nov 22, 2019 1:17 pm

To be honest maybe your house is too much for just you two. I don’t know where you live but $1M dollar homes are considered extravagant in most parts of the country and likely taxes on the property is not negligible. The average house in the US is in the neighborhood of $300K. Even California the average house is $550K you are almost twice that.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair

Topic Author
stanford73
Posts: 129
Joined: Tue Sep 11, 2018 1:05 am

Re: Help: Husband's Surprise Debts

Post by stanford73 » Fri Nov 22, 2019 1:25 pm

fru-gal wrote:
Fri Nov 22, 2019 1:03 pm

He;s not being honest with you, even when you try to have a discussion. He is likely not going to be honest with you in the future. Your kids are grownups; their welfare no longer depends on your marriage. You have already considered divorce. Do you really want this major stress and financial mess that threatens your retirement in your life long term? Or would you rather get divorced and be in control of your own life and your own finances.

I would be a nervous wreck if I were married to him.
I hear what you're saying. I agree. But, I don't think it's an easy decision, especially at this age and stage of life. My SS is $945 per month, plus an annuity of $320. How could I possibly live on that amount of money? Division of the assets (minus debts) would net me maybe $350k.

I had a window of opportunity 10 years ago to make a change. I don't think that option now is financially feasible.
Last edited by stanford73 on Fri Nov 22, 2019 1:31 pm, edited 1 time in total.

User avatar
Watty
Posts: 18052
Joined: Wed Oct 10, 2007 3:55 pm

Re: Help: Husband's Surprise Debts

Post by Watty » Fri Nov 22, 2019 1:29 pm

stanford73 wrote:
Fri Nov 22, 2019 12:49 pm
....no signs of dementia.
That sounds encouraging but it would still be good to get a medical opinion just to be sure.

In the early stages it can be extremely difficult to diagnose especially when you see him every day and would not notice gradual changes.

https://www.nia.nih.gov/health/managing ... rs-disease

aristotelian
Posts: 6671
Joined: Wed Jan 11, 2017 8:05 pm

Re: Help: Husband's Surprise Debts

Post by aristotelian » Fri Nov 22, 2019 1:44 pm

stanford73 wrote:
Fri Nov 22, 2019 1:25 pm
I hear what you're saying. I agree. But, I don't think it's an easy decision, especially at this age and stage of life. My SS is $945 per month, plus an annuity of $320. How could I possibly live on that amount of money? Division of the assets (minus debts) would net me maybe $350k.

I had a window of opportunity 10 years ago to make a change. I don't think that option now is financially feasible.
Sounds like he is going to be a net drain on your finances. Assuming that that is a valid reason for staying (which I personally find problematic) are you sure you will be better off financially staying with him?

snowman
Posts: 986
Joined: Thu Jan 31, 2013 12:59 pm

Re: Help: Husband's Surprise Debts

Post by snowman » Fri Nov 22, 2019 1:51 pm

stanford73 wrote:
Fri Nov 22, 2019 1:25 pm
fru-gal wrote:
Fri Nov 22, 2019 1:03 pm

He;s not being honest with you, even when you try to have a discussion. He is likely not going to be honest with you in the future. Your kids are grownups; their welfare no longer depends on your marriage. You have already considered divorce. Do you really want this major stress and financial mess that threatens your retirement in your life long term? Or would you rather get divorced and be in control of your own life and your own finances.

I would be a nervous wreck if I were married to him.
I hear what you're saying. I agree. But, I don't think it's an easy decision, especially at this age and stage of life. My SS is $945 per month, plus an annuity of $320. How could I possibly live on that amount of money? Division of the assets (minus debts) would net me maybe $350k.

I had a window of opportunity 10 years ago to make a change. I don't think that option now is financially feasible.
Was going to respond but OP beat me to it. This is actually very common. Once the couple gets to their 60s, even if the house gets sold and proceeds split half way, there isn't enough money to live on separately. Add to that unexpected end of career and health issues, and it simply isn't realistic option.

Katietsu
Posts: 2716
Joined: Sun Sep 22, 2013 1:48 am

Re: Help: Husband's Surprise Debts

Post by Katietsu » Fri Nov 22, 2019 1:53 pm

I am sorry the the OP is in this situation. I understand that there is $120k of recent surprise debt. But there seems to be a long history of troubling behavior by both parties with this last bit being a small part of the overall picture. The OP speaks about her husband’s uneven income yet speaks of her own income as only being responsible for personal expenses and optional expenses (education, gifts, trips). At minimum, she should have skimmed and signed the tax return. She had to know when he was unemployed. And yet, they are living in a $1 million dollar house on the brink of possible retirement with wife feeling no obligation to contribute to the mortgage.

I know I sound harsh. I am doing this because the best way forward is with both spouses participating equally and both spouses feeling the responsibility of the future. Or both spouses simply going their own way and responsible for themselves.

Get a handle on current and future expenses using Dave Ramsey, YNAB, Jane Bryant Quinn or whatever system works for you. Focus on where you are now and where you need to go not on where you have been. There is no reason for you to be homeless but you might need to make changes to your vision of retirement. This might be the last chance to make moderate changes instead of drastic changes being forced upon you down the road.
Last edited by Katietsu on Fri Nov 22, 2019 2:07 pm, edited 3 times in total.

Shallowpockets
Posts: 1501
Joined: Fri Nov 20, 2015 10:26 am

Re: Help: Husband's Surprise Debts

Post by Shallowpockets » Fri Nov 22, 2019 1:55 pm

Op, your quote.
>>>>>>DH has had chronic unemployment issues, poor career decisions, etc. forcing refinancing of home twice to tap equity, family loans, bill collectors hounding us, etc. I've consistently worked either FT or PT to pay my personal expenses (car, clothing, etc.) plus kids' expenses (education, clothing, gifts, trips, etc.). Marriage counseling three times; consulted divorce attorney twice, but decided to stay in marriage for kids' welfare. >>>>>>

Hint, hint, bad history there. You think anything will change? Has changed?
Get your accounting. Get your spreadsheet from him. Get a move on with a decision.

Your thread is akin to another thread here on someone’s errant irresponsible sister moving in with him. He’s 71. Now he has a roommate. Read that thread, maybe clarity for your situation will emerge from reading it.

Topic Author
stanford73
Posts: 129
Joined: Tue Sep 11, 2018 1:05 am

Re: Help: Husband's Surprise Debts

Post by stanford73 » Fri Nov 22, 2019 1:57 pm

aristotelian wrote:
Fri Nov 22, 2019 1:44 pm
stanford73 wrote:
Fri Nov 22, 2019 1:25 pm
I hear what you're saying. I agree. But, I don't think it's an easy decision, especially at this age and stage of life. My SS is $945 per month, plus an annuity of $320. How could I possibly live on that amount of money? Division of the assets (minus debts) would net me maybe $350k.

I had a window of opportunity 10 years ago to make a change. I don't think that option now is financially feasible.
Sounds like he is going to be a net drain on your finances. Assuming that that is a valid reason for staying (which I personally find problematic) are you sure you will be better off financially staying with him?
About 20 years ago, a divorce attorney gave me the following advice: "as long as you stay married to this man, your finances will be in jeopardy." At that time, raising children, I didn't give it much weight. But, his words have come back to haunt me now.

frugalmama
Posts: 205
Joined: Tue Mar 20, 2018 12:53 pm

Re: Help: Husband's Surprise Debts

Post by frugalmama » Fri Nov 22, 2019 2:01 pm

stanford73 wrote:
Fri Nov 22, 2019 1:25 pm
fru-gal wrote:
Fri Nov 22, 2019 1:03 pm

He;s not being honest with you, even when you try to have a discussion. He is likely not going to be honest with you in the future. Your kids are grownups; their welfare no longer depends on your marriage. You have already considered divorce. Do you really want this major stress and financial mess that threatens your retirement in your life long term? Or would you rather get divorced and be in control of your own life and your own finances.

I would be a nervous wreck if I were married to him.
I hear what you're saying. I agree. But, I don't think it's an easy decision, especially at this age and stage of life. My SS is $945 per month, plus an annuity of $320. How could I possibly live on that amount of money? Division of the assets (minus debts) would net me maybe $350k.

I had a window of opportunity 10 years ago to make a change. I don't think that option now is financially feasible.
First, let me say that I'm sorry as I can't imagine how frustrated and stressful this must be.

I think my concern would be that it could happen again and therefore, how can you afford NOT to separate finances now as you may very well be worse off later. In other words, your finances are bleeding out (as there is interest on that IRS debt, etc.) and he could just open another credit card, etc. etc.. Just knowing that someone is bleeding out isn't enough to stop the bleed. Your DH needs a "come to Jesus" meeting about the true state that the two of you are in and he must be MORE committed than you are to dig out just because he really has not been forthcoming in the past. Currently, I'd be concerned about that since you appear to be initiating all of the "change". I agree with the rest of the financial advice here and think that counseling is a must with this sort of violation of trust as it CAN happen again and once it happens, you are worse off than you are now.

California88
Posts: 50
Joined: Sun Feb 03, 2019 12:08 pm

Re: Help: Husband's Surprise Debts

Post by California88 » Fri Nov 22, 2019 2:08 pm

Seems problems started 2 years ago ... when the budget spreadsheet meetings you'd been having with him on a regular basis ... well they just "dropped off" ... and he started being secretive about finances.

I'm sorry you have to go through this - I'm sure it's overwhelming - but at least you're attacking the situation - and every day it will get easier - unfortunately it sounds like this isn't just a case of "getting through this rough financial patch".

User avatar
FlyAF
Posts: 488
Joined: Tue Jan 23, 2018 11:14 am

Re: Help: Husband's Surprise Debts

Post by FlyAF » Fri Nov 22, 2019 2:13 pm

Pay your taxes before things go from pretty bad to extremely worse. The IRS is the one entity you don't want to stiff and they wield a lot of power.

User avatar
Stinky
Posts: 2817
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Help: Husband's Surprise Debts

Post by Stinky » Fri Nov 22, 2019 2:15 pm

stanford73 wrote:
Fri Nov 22, 2019 12:49 pm
I've left the finances up to him--it's not my strong suit and he has an MBA--so I assumed all was being handled.
.......

I spoke to DH this morning briefly asking him to put together a current spreadsheet, so we can have a candid discussion.
Sounds to me like you need to take charge of all finances. Right now.
It's a GREAT day to be alive - Travis Tritt

Topic Author
stanford73
Posts: 129
Joined: Tue Sep 11, 2018 1:05 am

Re: Help: Husband's Surprise Debts

Post by stanford73 » Fri Nov 22, 2019 2:19 pm

Katietsu wrote:
Fri Nov 22, 2019 1:53 pm
I am sorry the the OP is in this situation. I understand that there is $120k of recent surprise debt. But there seems to be a long history of troubling behavior by both parties with this last bit being a small part of the overall picture. The OP speaks about her husband’s uneven income yet speaks of her own income as only being responsible for personal expenses and optional expenses (education, gifts, trips). At minimum, she should have skimmed and signed the tax return. She had to know when he was unemployed. And yet, they are living in a $1 million dollar house on the brink of possible retirement with wife feeling no obligation to contribute to the mortgage.

I know I sound harsh. I am doing this because the best way forward is with both spouses participating equally and both spouses feeling the responsibility of the future. Or both spouses simply going their own way and responsible for themselves.

Get a handle on current and future expenses using Dave Ramsey, YNAB, Jane Bryant Quinn or whatever system works for you. Focus on where you are now and where you need to go not on where you have been. There is no reason for you to be homeless but you might need to make changes to your vision of retirement.
I don't mind the reality check and I agree, if we are to solve this problem, we need to do this together. HOWEVER, my income (while raising three children!!) did not pay just for optional expenses--my car, clothing for myself & kids, school tuitions, food, cell phones, miscellaneous for kids, any travel). Also, our house is 3,000 square feet & was purchased at $250k 25 years ago. It has appreciated with equity, even though it's been refinanced several times. It's far from being extravagant in this hot housing market.

Locked