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I am recently married and my husband is a businessman. I quit my job as a flight attendant before getting married. Although life after the wedding was initially peaceful, I discovered that my husband has a credit card debt worth Dh200,000 ($54,458), which he never told me about before the marriage.
I became aware of the debt only after recently stumbling upon his credit card bills.
I feel betrayed because I believe that financial transparency is crucial in a relationship. My husband still buys expensive gifts for me without thinking of the consequences.
He also believes in keeping up with the Joneses and spends beyond his means. He earns a monthly income of Dh11,000 after accounting for his business’ operational expenses. However, he initially told me he earned Dh20,000 a month.
I want to help him and bring him back on track financially without hurting his feelings, but also worry that I might be held responsible for his debts if he misses payments. What can I do? JB, Dubai
Debt panellist 1: Jaya Ratnani, managing partner at Freed Financial Services
Many people can feel as though they are drowning in credit card debt, which typically comes with high interest rates. Some people apply for credit cards due to attractive promotional offers and eventually end up buying things they do not need.
Some people also pay the minimum amount due without realizing that the interest is compounded on unpaid amounts and this results in the credit card debt rising very quickly. It seems that this is the situation your husband is facing with a credit card debt of Dh200,000.
Based on your current predicament, the best possible solution is for your husband to contact the bank and request a credit card debt restructuring payment plan.
Prepare an in-depth analysis of your current financial situation considering your husband’s income of Dh11,000 and all other liabilities. The bank will assess your current situation and devise a settlement payment plan in line with its repayment ability.
It is recommended to consolidate your debt in the form of a single payment. The advantage of consolidation is that you deal only with one institution, making it easier to keep better track of how much you owe to a single entity.
You could also opt for a business loan from your primary bank that comes with a lower interest rate compared with credit cards, which typically carry a rate of more than 30 per cent per year.
You can also try to support your husband by looking for a job until he recovers from his debt obligations. A good way to come out of debt is to stop using credit cards and start using cash or digital wallets.
Focus on making a realistic budget based on income and not expenses. You can try to allocate funds for essential expenses such as rent, debt repayments, food, utilities and transport.
With the remaining amount, aim to build an emergency fund that should only be used for expenses such as car maintenance, house repairs or any other unforeseen emergencies.
Debt panellist 2: Nathan McFarlane, founder of AskHelpWith.com
This is a problem I have come across all too often. Discussing finances with your significant other is imperative to make your financial life work.
It is normal to experience financial difficulties at different points of your life but one thing that will not solve the problem is hiding from it.
I would suggest you confront your husband on this immediately, as his financial situation and expenditure directly affects you. The finances should be completely transparent and you should set certain ground rules on expenditure.
You should be aware that Dh200,000 of credit card debt is substantial. Even at minimum payment levels, his entire monthly income has gone, potentially meaning default status.
Based on what you have said about the debt levels he has versus the amount of income coming in, this debt is not going away anytime soon. What I can say is that you should not legally be held accountable for his debt but naturally, as his wife, this will be a burden on you.
I think you will have to put your foot down on this one for the good of your livelihood and your marriage. I wish you the best of luck in overcoming this.
Debt panellist 3: Felicity Glover, personal finance editor at The National
Financial infidelity can be quite damaging and lead to trust issues between couples if a spouse is hiding debts, inflating their salary or hiding big-ticket purchases, among others.
Being honest and accountable about money in a relationship is vital to reach your shared financial goals, such as buying a family home, investing and saving for children’s education.
This is a difficult position for you to be in as you accidentally found your husband’s credit card statements rather than him being open with you about his debts.
The good news is that you will not be liable for your husband’s debt. Under UAE law, only the person whose name is on the debt — such as a mortgage, personal loan or credit card — is liable for it. You would only be responsible if you were a guarantor or had provided a signed security check against the debt.
At Dh200,000, the credit card debt is very high and should be your husband’s first priority to pay off as the compound interest will quickly add up. If he cannot afford to pay it off at once, he could apply for a personal loan, which carries lower interest rates and would be much more manageable financially.
But keep in mind that if your husband does pay off the debt with a personal loan, he should surrender the cards to avoid building up high interest debt again as it could easily spiral out of control. I would also suggest working on a budget to keep spending in check and setting out shared financial goals to work towards.
Taking on secret debt to fund a lifestyle or to keep up with the Joneses is unhealthy, not only for a person’s finances but also their mental health. This could mean that your husband may have difficulty talking about it.
I do understand that the topic of money and debt can cause great stress between couples. However, it is important that you are also transparent with your husband. Try to calmly talk about what you have discovered about his financial situation and why you are concerned about the credit card debt and his lower income.
If you do not feel confident doing this, you could also try couples’ counseling to discuss the problem in a neutral setting that will help to keep emotions in check and, hopefully, put you both back on track to have a happy and secure financial future together.
The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to firstname.lastname@example.org
Updated: February 2nd 2022, 5:00 AM