Friend Discovers Hubby’s High Credit Card Debt and Screams “I Want A Divorce”

by Neal Frankle, CFP ®

Over the weekend, my wife and I had a chance to sit down with a good friend of ours who recently discovered her husband’s credit card debt problem. I was shocked to hear about the financial situation she and her husband were in.

Jeanie and Victor have been together for over seven years now. She’s an architect and he’s a professional (struggling) photographer. While it was clear they weren’t swimming in cash, it never occurred to us that they were so financially troubled.

On a whim, she checked her credit score and was shocked by what she found.

Ever since they got married, she left all the financial decisions up to her husband Vic. He paid all the bills (or so she thought), and he was the final arbiter of what they could and couldn’t afford. Life was great because Vic gave a thumbs up to any and all spending.

To make a long story short, Jeanie woke up one cold morning to discover that Vic had only made the minimum credit card payments for over two years. Sometimes, he even made the house payment by taking a credit card advance. And all the while, the couple kept spending.

Every dog has its day and when it does, it often has a vicious bite. Jeanie found out that they had accumulated over $75,000 in credit card debt. Together they were earning over $140,000 a year, but they were spending almost $160,000.

Why didn’t Vic ever bring this problem to his wife’s attention?  Maybe he didn’t want to say “no, we can’t afford that” because he was a bit ashamed of himself. Jessica was the major wage earner – bringing home more than 85% of the family income. Perhaps he wanted to avoid the “can’t afford it” conversation because he feared it would lead to the “we can’t afford it because you don’t make enough money” conversation.

Maybe he didn’t want to say “no, we can’t afford it” because he just enjoyed living high on the hog. Who knows? Does it matter?

Jessica told us that when she found out how bad the situation was, she planned on leaving her husband. Her first call was to a divorce attorney.  She was completely despondent. She was ticked off at Vic for being so irresponsible, and at the same time, she had no idea how they could have spent so much money. She felt stuck and lost.  And she didn’t see any way out of the credit card debt problem her husband created.

Ultimately, they did stay together. Jeanie took over the financial management of the family. She made all spending decisions and Vic followed dutifully. Slowly, things improved.Over time,  they worked their debt down to less than $8,000 in three short years. They had a lot to be proud of.

While this was an amazing accomplishment, I could see that Jessica was still upset about her family’s financial situation. She was tired of always having to call the shots. She was happy that Vic turned over the reins to the finances, but she expects more.

She wants Vic to be a financial partner, not just a willing follower.

Here is the question I need your help on.

Is it realistic for Jessica to expect Vic to become a responsible financial co-steward? Or, given where Vic came from, should Jessica be happy that he’s admitted he’s no good at managing finances and is willing to follow Jessica’s lead?

 

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{ 27 comments… read them below or add one }

Ken September 23, 2013 at 9:50 PM

Did you intentionally change the names form Jeannie to Jessica?

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Ndy September 23, 2013 at 2:58 PM

For the marriage to be healthy and work well, Vic needs to help his wife out in the financial planning of their family. They both need to be taking decisions about finances together while the wife can continue being the one paying the bills. However they need to be involved together in doing the family budgets. This will also improve the communication in the marriage

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Neal Frankle September 24, 2013 at 5:16 AM

I completely agree. Thanks…..

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Funny about Money April 18, 2010 at 4:19 AM

They stayed together this time, but trust me: unless some major changes are made, they won’t be together at the end of their lives.

I was exactly in Jessica’s position. In the third year of the marriage, I told my husband we needed to get our finances under control. I designed a budget and suggested we try to live like sensible people, at least until we could pay off the credit card debt that he brought to the marriage and that by then was out of control. He patted me on my pretty little head and threw it out.

In the seventh year of our marriage, I decided to leave, largely because of the chronic financial situation, which he quietly hid from me. For a variety of reasons that had nothing to do with the underlying problem, I was persuaded to stay.

By the 25th year of our marriage, we were three-quarters of a million dollars in debt, down from the high of one million. He had signed a personal guarantee for a loan his law firm had taken out against the building it owned and occupied; his partners were embezzling from the firm and the nation was in a recession. The bank called the loan.

Fortunately, one of the partners’ wives had insisted that the loan documents exempt wives’ sole and separate property from liability, and fortunately, I had come into a small inheritance from a long-lost aunt.

Enough was enough. I walked. To keep our child in the expensive private school he was attending and to send him to the college of his choice, my mother-in-law and I borrowed against every liquid penny we had to avert my then-husband’s bankruptcy.

Someone else now has him and his debt. Lucky her!

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jingles February 18, 2010 at 7:05 PM

sounds like the hubby is an irresponsible person who would rather be led than lead. i dont blame her for initially wanting the divorce.

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MasterPo January 2, 2010 at 10:32 PM

Something similar happened to friends of ours earlier this year.

To make a long story short, the husband left payingthe bills (including the mortgage) up to the wife. She got behind VERY badly. Not just for a little questionable spending but some other family expenses that couldn’t be avoided.

Bottom line is they were literally days away from loosing their house and what little they had!

No help from the bank or the gov (didn’t qualify – thank you Obama!).

Finally someone gave them a personal loan to bridge the debt temporarily so they didn’t loose the house at least. And yes, they are paying it back on schedule with interest.

The point is the wife hid the financial arears from her husband until it was almost too late.

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Rob Bennett December 16, 2009 at 4:24 AM

I like the comments that point out that the important issues here are not what we generally think of as money issues. There are fear issues and communication issues and trust issues and willingness-to-speak-up issues and perfectionism issues and responsibility issues and issues relating to being able to forgive and all this sort of thing.

Money is always personal. So we cannot learn how to handle money without also learning how to handle ourselves.

This doesn’t mean that money blogs should become psychology blogs. It means that our understanding of what constitutes a money topic needs to expand.

The old way doesn’t work. That’s the bottom line. We need to try something new.

Rob

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Neal Frankle December 15, 2009 at 10:28 PM

PookahBoss,

You made a really important point. Even though one person may tend to do the finances, if something should happen to that person, the other person would step up in most cases.

Would it be better to learn the skills now? Absolutely. But when push comes to shove, “necessity is the mother of all invention”….right?

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PookahBoss December 15, 2009 at 3:31 PM

Yes, Sandy L.’s points are very good, and definitely apply – as do many other commentors’ points. Relationships involve give and take. Creator-of-choice knows that my S.O. (Significant Other) is far better at certain things than I am. We also make a conscious choice to help each other improve our weak areas for one simple reason:

We are stronger for it, together and as individuals.

That doesn’t change Sandy L’s point that, for example, my S.O. is simply better at certain tasks. We mutually agree to leave those to S.O. But we both know that if S.O. isn’t there to handle it, I can muddle through without sinking us financially.

That kind of trust requires a lot of effort to earn. I don’t think Jessica and Vic had that kind of trust to begin with. Now they’re paying a price for it.

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Kate December 15, 2009 at 1:08 PM

Wow – I can’t imagine finding out I was in 75k of debt. I haven’t made the smartest financial decisions, but I have taken steps to rectify those mistakes. I am not married yet, but one of my goals is to be completely out of debt before that happens. I don’t think that it is fair to assume my partner would want to share in that burden. I am glad that Jessica and Vic have started to work things out and amazed how much they paid off in 3 years.

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Ken December 15, 2009 at 9:47 AM

I think that she can continue to manage the brunt of the financial decisions. She does need to communincate with him regularly about where they are financially and how things get paid. Should she die he (desperately) needs to have a clue about how things are working. I like the earlier comment about letting him assume other duties that are causing her stress. There needs to be a balance and division of labor.

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neal@wealthpilgrim December 14, 2009 at 9:13 PM

PookahBoss, #15,

You did a fine job of spelling out where the problems are – they are both stuck in their fear.

Until they both deal with those fears, the solution will evade them.

I personally love the idea of both Vic and Jess getting involved but consider Sandy L’s points (#8) She makes some good ones.

Everyone DOES have flaws. Vic has demonstrated what his are already. Maybe Jess would be looking for trouble if she forces Vic to step up to the plate.

But either way, I’m with you PookahBoss. They really need to work on their communication skills. That may not solve the problem, but as my Grandma used to say,”It couldn’t hurt either!”

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PookahBoss December 14, 2009 at 5:36 PM

My apologies for the (very) long comment. I tend to be very analytical, and your blog fascinates me. So, here goes.

When I read through the post, the first thing I thought was:

What are these two people so afraid of?

Seriously:
* He didn’t keep her up-to-date on the Financial State Of Our Union.
* She didn’t go over his financial activities so that she’d be familiar with their current situation if hubby gets hit by a truck.
* He didn’t ‘fess up to screwing up until he was caught.
* She threatened divorce – her first (re)action on discovering the problem.
* He rolled over, gave her all the financial matters to handle.
* Assumption (because your post does not mention it, and if she *was* doing it different, I think you would’ve mentioned it): She isn’t keeping him up-to-date on the Financial State Of Our Union.

That speaks of much fear, on both their parts. Look at the patterns of over-reaction and non-communication you describe. I find myself wanting to ask them, How can you just dump the whole load on the other person without even TRYING to share that load?

She was happy when Vic took all the financial responsibility and acted like the grown-up. Now she’s unhappy because she has taken all the financial responsibility and has to act like the grown-up. Further, she still resents Vic for his screwup… three years later! It is well past time where she needed to sit down and either accept his failings or do something about them. Holding a grudge for three years is not doing something about them. I’m sure Vic has quite a bit of resentment he’s holding onto also.

Vic is also to blame. Not only did he royally screw-up their finances, but then he lied about it. Yes, lying by omission is still lying. Conflict avoidance by deception is still lying. “Yes, we can afford it, sweetheart. (No mention of the overdue bills.)” By your account, Vic still hasn’t stepped up to the plate and taken the most basic steps fix his mistakes. Yes, part of being an adult is you admit the mistake, take corrective action, learn from it, and get on with your life.

Now they’re stuck. She blames him. He blames her. They both feel guilty, angry, betrayed, failure, and much more.

I strongly suspect that what started out as not wanting to hurt the other person’s feelings, or make the other person think poorly of “me”, has now grown into a far more cancerous and lethal fear of emotional, passive-aggressive, or possibly verbal retaliation out of (somewhat) justified frustration. I expect the problems here will only continue to grow, until both the people involved start talking again. Because that is the fundamental key in a relationship: Communication. In order to have the healthy kind of communication that a couple needs, both of them need to overcome some fears.

So, with all that lead up, to answer your questions directly:

Why didn’t Vic bring this to Jessica’s attention? I think he was afraid of perceived failure, and her reaction to/rejection of him. There is probably a reason for those fears.

Who knows? Vic and Jessica do.

Does it matter? Absolutely. If they don’t recognize the problems going on here, and deal with them, it will only repeat itself — and probably in a worse form.

Is it realistic for Jessica to expect Vic to become a financially responsible co-steward? Yes. It is not only reasonable, but it is REQUIRED for both of them to be stewards of their family finances. At the very least, Vic must know how to keep their financial ship on course if Jessica gets bedridden with pneumonia or a broken leg. That means Vic must start acting like a responsible adult, overcome his fears, and start learning how to behave in a fiscally responsible manner. Jessica, too, needs to step up to the plate. He screwed up. She needs to get over it, and help him find ways to keep it from happening again. That is part of what marriage, what a ~partnership~, is. She must take on the adult responsibility of teaching another adult to compensate for a serious flaw, overcome her fears, and deal with her relationship with her significant other in a responsible manner. Immediately calling a divorce attorney over money is NOT responsible behavior. (Note: If she was contacting a lawyer for _advice_, not demanding a divorce, then she did the smart thing to protect herself. I don’t know all that was going on at the time and may be waaay off base here.)

Or, …, should Jessica be happy that he’s admitted he’s no good at managing finances…? No, for reasons described above. What if life knocks Jessica down for the count? Who does he have to fall back on to handle the finances, that he can trust – and verify – won’t rob them of all they’ve saved up?

This situation that you’ve described is going to take professional advice to both Jessica and Vic, in my opinion. A reliable marriage counselor and a financial advisor are a must, just to get them talking – really talking – again. Financial health is only part of a married relationship. But it is usually the first noticable victim of an unhealthy married relationship. It takes courage to admit a screw-up. It takes even more courage to admit fear regarding someone you love.

I do not envy them what lies ahead. It will be painful, and there will be tears, no matter how it turns out. They are in a mess. But they have at least taken the first few steps to get out of the mess… on the financial side. Clearing out $67,000+ debt in only 3 years is impressive, and speaks well of their ability to commit. Time to start working on the marriage… if they both want to stay married, that is.

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Abigail December 14, 2009 at 4:41 PM

First of all, the debt definitely lands on both their heads. Sure, he was supposed to handle it all. But she chose to leave it all to him rather than stay informed. And, really, the spending levels really should have tipped her off at some point.

I understand her wanting to have a partner in finances. My husband has severe ADD, so I am primarily responsible for finances. Over the last three years, though, we’ve been slowly getting him into the game. (My next read will be “ADD & Your Money.”)

It’s a long process, with a lot of steps backwards. (Impulsivity is not something you ever shake.) Still, over the last year or so, he’s really bloomed and started taking more frugal initiatives. He is better at asking himself whether he needs something, rather than buying it. He still wants almost everything he sees, but he’s getting better at not giving in.

So it’s fair of her to want SOME form of partnership — just so long as she realizes he may not be able to be an equal partner. (Also, he should consider some form of therapy — minister, psychologist, friend — to deal with the macho issues that probably led him down this path.)

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karyn December 14, 2009 at 4:05 PM

I don’t think it’s good for either spouse to be ignorant of the family’s finances. If nothing else, what happens when one spouse dies and the other has no idea how to pay the bills? Also, it would hopefully be empowering to both of them to be working together towards the same goals. Granted, if Jessica is naturally better at finances, she will probably do the bulk of the work – but Vic should be involved. To use Sandy’s analogy, my husband is naturally gifted at fixing things around the house and so he does most of that type of work and I’m the better cook, so I do that work. But both of us can “hold our own” in both areas and we hopefully learn from each other’s expertise as well.

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neal@wealthpilgrim December 14, 2009 at 2:05 PM

Sam…yes….I think we’ll all admit that Vic has some real skill……but not sure any of us really want to emulate it.

LOL

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Financial Samurai December 14, 2009 at 12:02 PM

Wow! $75K in CC debt? Impressive that he got such a HUGE line of credit when CC companies and banks are cutting credit left and right.

Actually, do you mind asking your friend to share with us how he got this credit? He must have some skills, or was a good debtor in the past no?

In my eyes, Vic is kinda a hero for being able to live the big pimin life for so long, and so secretly without letting his wife no. I would never be able to get away with it, so he’s got some true skills.

Vic should just take Jessica’s lead, b/c she makes more, and he’s proven to be irresponsible with money. Vic might be addicted to credit, which might mean unsatisfication elsewhere. What if it leads to gambling and other Tiger Woods-like stuff? Have more open conversations NOW!

Love these stories. Keep it up!

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Mike December 14, 2009 at 11:51 AM

I posted early and seem to be in the minority in my opinion that Jessica and Vic need to work together on their finances. So for all those who don’t see it as something worth his time I have one question…what happens to Vic in the event that Jessica dies? How has Vic learned from Jessica in a way that helps him in the event that he is the only one to handle his finances?

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Bryan December 14, 2009 at 11:37 AM

As a Mortgage Originator and Liability Advisor, I see this scenario more than anyone would like to believe. It works both ways, usually it’s the wife doing the stealth spending. I’ve even had people tell me they wanted to get power-of attoney for their spouse so the spouse does not see what kind of debt has been amassed, when they refinance their mortgage to pay it all off. Couples have to be very open with each other. If one knows they have a spending problem, they will be much better off asking their spouse for support rather than hide it until it becomes a 50, 60 , 70, 80,90 thousand dollar problem (which it does alot).

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Sandy L December 14, 2009 at 11:16 AM

Every person has flaws. I always think that marriages last when two people have flaws that the other partner can live with.

I personally know couples who give allowances to their partners and both people are fine with it. Some people just aren’t that good with numbers but are good at other important things.

I say play to each other’s strengths. Let’s just pretend Vic is a great handyman. Is it productive for Jessica to learn how to fix toilets when Vic is excellent at it? Should Jessica expect the same of Vic wrt budgeting?

I say Jessica keep the role of finance queen and if she needs help around the house, play to Vic’s strengths, not weaknesses. Have him take on something else that will help reduce stress in other ways. (Menu planning, cooking, laundry, vacation planning, home improvement projects, massages, etc, etc)

I personally don’t think it’s worth the risk and stress of having Vic take on that responsibility when she knows he’s bad at money management.

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neal@wealthpilgrim December 14, 2009 at 11:02 AM

It’s just little ol’ me Evan.

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Evan December 14, 2009 at 10:24 AM

Neal,

You wrote in the plural – we, us, etc. I am just curious is the Money School operated with Partners?

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neal@wealthpilgrim December 14, 2009 at 9:32 AM

Susan…hard to disagree w/that. Yes…she has some responsibility here too.

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Susan D. December 14, 2009 at 8:14 AM

She has to take some of the responsibility for the problem. She must have had some kind of gut feeling that a problem was brewing but she was in denial. She knew what she spent, why wouldn’t she think hubby was spending the same. If she is the moneymaker then she better be involved in at least knowing what’s owed.

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L December 14, 2009 at 8:11 AM

In my opinion, I think both are responsible for the debt. How could Jessica see that they are spending huge money and not ask any questions for years? That is about equally crazy as watching the debt pile up and not saying anything. Then she instantly wanted a divorce once she discovered it? That is ridiculous.

Both are responsible and both should be involved in managing their finances, or at least both should know exactly what they are doing with their money and both should be involved in the decision making.

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Mike December 14, 2009 at 7:57 AM

It is absolutely reasonable, rational, and logical to think/expect Vic to become an active participant in the financial decisions for this couple. This is the time for learning. Obviously Vic didn’t make great choices, and Jessica is better at that aspect of life. But how will Vic ever survive on his own if he doesn’t learn? And once this final 8,000 dollars is gone, how will Jessica learn to say yes to a non-necessary expense unless Vic helps her enjoy the money they make together?

It’s a two way street where each personality learns from and teaches the other, hopefully creating two more balanced individuals.

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Dana@Common Cents Coaching December 14, 2009 at 7:50 AM

I think that Jessica and Vic need to have a sit-down to get on the same page. They both need to be able to express what is important to them in their lives. It sounds like Jessica feels that she wants a partner who is fully invested in the decisions that need to be made about their money. Vic may feel that because he doesn’t make the bulk of the money and because he let things get so out of control that he doesn’t deserve to have any say in their money decisions. Once these feelings and values are out on the table, they should be able to put together a plan that makes both of them comfortable. In my house, my husband takes care of some of the bills, I take care of some of them. I track all of our spending on an excel spreadsheet. Then we sit down and talk over how we can tweak things to match the short-term and long-term goals that we have set up. It’s definitely not a perfect system–every so often I freak out and yell at my DH. However, it’s when that happens that I know that we need to have the talk again because things are out of whack for us. I think that if they can really be honest when they talk about money, then they will be able to work out a good system so they are both happy with the results.

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