Shocked by business debt revelation

iVillage Member
Registered: 01-24-2005
Shocked by business debt revelation
15
Mon, 01-24-2005 - 11:19am
Five years ago my husband quit his job to start his own business. I wasn't very happy about it, but he didn't discuss it with me beforehand, he just came home one day and announced it was a done deal, he'd given his notice. Whenever I've asked him how the business is doing, he is evasive but since he brought home a (small) paycheck and had clients, I figured he was at least breaking even.
He accidently left a P & L statement at home which I found and was stunned to see he was losing a great deal of money. I confronted him and he admitted he is deeply in debt. He has no plans to give up his business. He says he can slash expenses and start breaking even. Of course this does not address how he will pay off the debt---which is mostly on credit cards, of all things! He didn't want to work with a bank when setting up his small business.
I am 54 years old and we have 2 teenage kids, no savings and almost no retirement, everything was poured into this business. I work part time(not for him)
I feel extremely overwhelmed. My husband says if his company goes bankrupt, it will be the corporation, not us personally, but I am still sick with worry.
If he dies, will I owe all that money? How can we retire with a huge huge debt?
Is there any resource I could tap into for help/advice?

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iVillage Member
Registered: 03-28-2003
Wed, 01-26-2005 - 2:47pm
abagael,
I really feel for you. It just doesn't seem right that you two are married and he is hiding information about your financial security or lack thereof. Even if he doesn't need you to be involved in the business on a daily basis (which isn't always easy either), I would think he would want you to know where you stand financially so at least you know if you should be socking money away for yourself! I hope he opens up the books for you...nothing is worse than being blinded..especially by the person you are closest to in this world. i would never be able to handle it.....you are a very strong person! I hope things work out great for you guys in the long term...you can't always judge that by how things look today. Good luck, Heather
iVillage Member
Registered: 01-24-2005
Thu, 01-27-2005 - 11:05am

Heather,

I can't tell you how much I appreciate your sympathy. In fact, I'm sitting here crying after I read it because I feel so alone and kind strangers are the only ones I can talk to. Thanks for listening and encouraging me. I really love my husband and I want him to succeed, but I am so scared I go through the day with my heart in my throat. He keeps on pretending at home like everything is OK, so I've started e-mailing him at his office to try and talk about it without the face to face pressure. So far, he's ignored my messages.
Life is just hard sometimes. Naturally, this is not the only thing going on in my life---"when it rains it pours" can be so true. Thanks for reminding me there is ALWAYS hope, no matter how bleak things look.

Abagael

iVillage Member
Registered: 03-31-2003
Thu, 01-27-2005 - 12:34pm

Abagael,

What a terrible situation to be in. I agree with whoever suggested it that you should pull your own credit report and see what's on it.

Are the credit cards in DH's name personally, or are they truly set up as business accounts? If they're personal credit cards, you could be held jointly responsible for the debt. I'm sure you already know this, but credit cards are the worst source of business 'loans' out there. If the bills can't be paid in full at the end of the month, the cards are not being used for 'convenience' as some business owners will argue.

While this is all playing out with DH, I would suggest fashioning some kind of "Plan B" for your own financial future and peace of mind. You still have well over a decade until retirement--is it possible for you to find a full-time job that has a retirement plan you could contribute to? Or maybe you could arrange for some of your part-time earnings to be deposited into an IRA each year.

Hugs to you,
BK




iVillage Member
Registered: 04-07-2003
Thu, 01-27-2005 - 6:59pm

If the credit cards are set up in your Dh's name, then he will be held responsible, not the corporation. If YOUR name is also on the credit card, then yes, you could also be held responsible.

Here in Canada, at least, if a spouse dies, then his/her debt is NOT transferred onto the surviving spouse UNLESS that person's name is also on the debt. Also, if the account is joint, many credit cards these days have life insurance policies, whereas you pay a certain percentage of your balance every month as a premium, and if you or your co-signor/applicant dies, then the debt is paid.











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iVillage Member
Registered: 01-24-2005
Mon, 01-31-2005 - 11:03am

Thanks BK!

I did check my credit rating about 6 months ago, because we were thinking of refinancing our house. It was excellent, so my name is not on his accounts. I'm assuming, however, that I would still be responsible for personal debt since we are married.

I have applied for a full time job and am waiting to hear if I am offered the position. My plan is to pay off our personal credit card debt ASAP--I'm pretty sure I can do it in 12 months--then start saving money and putting it in my IRA----which is of course in my name only.

abagael

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