Oh look, something I can contribute to. I... I'm not sure how to feel about that one.
Debt 1 - Wife's Visa - Current Status: DEAD
My wife and I knew the broad strokes of our finances when we were dating, but it wasn't until we got engaged and moved in together that we sat down and laid out the details. For me it was a matter of protection. Years of careful and cheap living had resulted in an exceedingly padded bank account. For her it was a matter of embarrassment. Years of bad choices had resulted in a paycheck to paycheck life that crushed her self worth.
I was shocked at the debts she held. $10,000 on this account, $10,000 on another, $5,000 owing on that one over there, a car payment bigger than the mortgage. She was in a position where she made very good money, but was simply incapable of making more than the minimum payments on all of these debts. So I made her a deal. I picked the biggest two on the list and told her I would pay off one of them in full. That night. But she had to commit the payment to the next one on the list.
So she called the bank, confirmed the balance. I called my bank and delivered a backhanded blow to the $10,000 Visa balance that removed its head from its shoulders. She then called back her bank and cancelled the card.
Debt 2 - Wife's Line Of Credit - Current Status: DEAD
This was the second on the list. A $10,000 line of credit that had, once upon a time, been taken out as a "consolidation loan". The problem was that as soon as the LOC had been maxed out the bank had raised the interest rate from a comparatively conservative (but still painfull) 8% to a far more difficult to contend with 13%. Interest, of course, compounded daily. As agreed she was putting the former Visa payment towards it, whilst also saving/paying for the upcoming wedding. During the following year leading to the wedding-
Debt 3 - Wife's Car Loan - Current Status: DEAD
- Recieved its final payment. That money also started going towards the LOC. We held a social (a fundraiser for those unfamiliar) to raise money for the wedding. We turned a nice profit from the wedding as well. In the end an event that cost us $7,000 to put on gave us a return of $15,000. It was at this point we called the bank and got an update on the balance. We still owed $7,000. We cursed, we raged, we wailed and gnashed our teeth. We took the entire profit from the wedding and used it to pay off the Line Of Credit. And then we closed it and swore to never deal with that bank again.
Debt 4 - Wife's Loan - Current Status: DEAD
Time passed. I did sweeping renovations to the house, a two year project that has so far averaged $1,000 a month kn cost. Money was tighter, but as we considered this an investment we kept rolling. I had noticed paperwork, and my wife had passed comments, concerning a loan that had not come up during our original consolidation of funds. With other, more pressing matters temporarily resolved I found the time to dig out the paperwork and go over it. A loan, held for the last six years, slowly nickle and diming us to death. I approached my wife for details.
Back in 2009 she had been dating a bad dude. One day, to make a long story short, he had stolen her credit card and maxed it out before skipping town. When she reported the theft she was told, in no uncertain terms, the because he had used her PIN that meant she had given him the code. She was therefore on the hook for the balance. At 25% on a $10,000 limit.
She has gone to the bank, gotten a loan, and paid it out. The loan had been for a three year term and everyone had been very sympathetic. The payment was $200 a month.
A three year term.
That was on it's sixth year.
And still had a $4,000 balance.
By my math she had made $12,000 in payments on an original loan amount of $9,000. And she still had $4,000 to go. It turned out that every year they had been sending her paperwork that tweaked the terms of the agreement, and she had just been signing them and sending them back. Somewhere along the line they has tweaked things so that the interest rate had jumped five points higher than she'd agreed to, added insurance, and made it so interest compounded daily.
I was not a happy man. I went to the bank, pulled money from where I could, and beat that loan to death with a blunt instrument: my chequebook.
Debt 6 - My Car Loan - Current Status: STRUGGLING FOR AIR
Not much to tell on this one. I got a 0% car loan five years ago for too much money. I chose the smallest, most fuel efficient car I could afford for the lowest price possible. I now owe $600 on the loan. I'm just going to let those payments come out on schedule, there's only two more after all, because I have more pressing matters to contend with. Such as:
Debt 7 - Wife's Dental Loan - Current Status: MINOR INJURIES
My wife has a distinct lack of front teeth and has since she was a child. They had to be removed, for whatever reason, and she had been wearing a retainer with fake teeth for decades to hide this fact. The retainer broke and we made the decision to get them fixed permanently. At the time money was steadily coming in. By the time the work was done and the loan payments showed up (another $10,000 loan) we'd had a financial disaster and were not in the position we thought we would be. We were able to throw $1,000 at it right off the top, but since then have been making only slightly more than the minimum payment. On the plus side we've got it down to $7,000. On the crappy side we still owe $7,000.
Debt 8 - My Mortgage - Current Status: ON THE ROPES
Not much to tell. Purchase price of home was $35,000, bought from my grandparents. Ten year mortgage, paid 20% down, took a very aggressive tack. Currently owe about $16,000, but that hardly matters. The house was an investment. I have put $30,000 worth of materials into a full renovation, increasing the value to over $150,000. We intend to sell as soon as we finish the house, and get sufficiently into the bare minimum renovations needed in our second home which we already own. This other property, appropriately enough, just happens to be:
Debt 10 - My Wife's Mortgage - Current Status: HEALTHY AND IMPOSING
The purchase price of this home was $50,000. Thanks to the sheer volume of debt churning we have performed over the last 5 years both of our credit scores are remarkable. As such we were able to get a 25 year mortgage at 2.8%. We intend to utilize upcoming funds from the sale of the house to start the process of making this a 5 year mortgage.
I am suddenly realizing I could probably do a blog post on any one of these debts, as well as the stories behind them. But to make a long story short.
TL;DR -
Approximately $75,000 in combined total debt, including two mortgages.