Help! My husband's debt is ruining our credit

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question for the expert

Dear To Her Credit,
I am 28 and my husband is 30. Until I got with him three years ago, everything was going great. I had my own house, where we live now, no credit card debt and a nice savings.

We have refinanced the house twice to pay off credit card debt that he brought into the marriage, and we still owe another $30,000 in credit card debt. We both have different jobs that pay less than what we were making before. We can't make the house payment that has doubled with the refinancing.

I don't know how much student loan debt I have (it is being deferred for now). My savings are wiped out. My husband brought no money into this marriage -- just debt.

What should we do? He has been looking for a second job, but due to his past and the current job market, he is unable to get one. Please, any help would be great.  -- Jen

Answer for the expert

Dear Jen,
I'm assuming you knew about your husband's "past" and his financial situation before you married him. (If not, that's another issue!) Apparently, his great qualities won you over despite his financial problems. I've known women who married men they knew were less responsible financially, and based on their experiences I know this problem is not insurmountable. By working together, couples can get back on track. In fact, sometimes nothing makes a man get serious about money like marriage and responsibility!

In retrospect, refinancing your house so it made your payments unaffordable was a mistake. Debt he racked up before your marriage was your husband's responsibility. He may have been able to settle his debt or even file for bankruptcy; now the debt is attached to your house. You could lose your house unless you and your husband make changes soon.

Not knowing how much student debt you have is a danger sign. Whenever we're afraid to find out where we really stand, we have passed the point of just being stressed. We're afraid to look!

You and your husband must immediately take three steps to regain control of your finances. You must do this together -- or it won't work. And you surely do not want to fall into the common trap of one person taking a somewhat parental role. If you've ever seen people do that, you know it won't help your finances -- or your marriage!

Here are the three steps:

1. Find out where you stand. Make a list of all your debts, including those dreaded student loans. List every credit card and debt -- even back taxes or personal loans. Add up the total amount you owe and your minimum monthly payments.

Make another list of your assets, including cars, motorcycles or boats, your house. Add up the total value of things you own.

Subtract the total amount you owe from the value of things you own. This is your financial net worth.

Now, make a third list and add up your income and expenses. If your expenses, including your debt payments and the bare minimum it takes you to buy food, insurance and other necessities, are greater than your take-home pay, at least now you know. You can make the best decisions only when you know where you stand.

2. Find more income. Looking for second jobs is a start. Jobs are not the only way to make money, however. Perhaps your husband can start a moonlighting business. I recommend a low-investment service business. For example, he may be a handyman, a musician or a computer genius. Find something where he can maximize the use of his skills.

You might want to find a business you can do together; otherwise, you won't see much of each other.

3. Cut expenses. I hope you don't have to sell your house. But houses are expensive. If you're having trouble making the payments, it can't be easy paying the taxes, insurance and maintenance expenses either. It's better to sell your house, even in a depressed market, than to lose it to foreclosure.

If you are making payments on one or two cars, sell them and buy an older car with the proceeds. Resolve never to make car payments again.

Agree on a budget you can live on until you get back on your feet. This doesn't have to be so bad when you're in it together. A home-cooked meal and a movie from the library is better than a fancy restaurant meal and overpriced movie that puts you further into debt.

It's too late to point fingers about the financial mess the two of you are in. However, you are still young. Think of this as your fresh start together. It's not too late to get your financial life going great again -- this time, together.

See related: How debt settlement works, how it affects credit scores, Deep in debt? Try to get a better settlement deal, settle his debt, Tips for uncovering, dealing with hidden credit card debt, When your spouse's debt collection becomes your nightmare, How foreclosures, short sales, other mortgage defaults affect credit

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Updated: 11-22-2017