At 28 Sally contracted her first STD. It was a long and painful process to get over and she’s doing much better (thank-you for asking). One thing she learned from her experience is that prevention is better than cure. Surprisingly, STDs are more common than you think!
“Sexually transmitted debt” is when you become liable for your partner’s debt as a result of your marital or de-facto relationship, rather than a conscious acceptance of the debt. It can arise in a relationship in a number of contexts, for example, when you provide an “all monies” mortgage or if you guarantee your partner’s loan. STDs commonly arise when one party incurs debts during the relationship (for example by not paying their taxes, by gambling large sums of money or through bad investments) and the other party becomes liable for a share of those debts.
When Sally met the charismatic and handsome Paul she was living in an unencumbered property gifted to her by her family. They fell in love and were married. After the first 18 months of marriage cracks began to appear in what had previously seemed to be a perfect relationship. Paul – a serious spendthrift – found himself with sizeable personal debts totalling a whopping $115,000 via credit cards and a car loan!
To assist Paul, Sally agreed to be guarantor on a home equity loan to consolidate the debt at a lower interest rate, with the aim of reducing the debt as soon as possible. Less than a year after the new loan had been established, Paul walked out on Sally and their 8 month old daughter – literally leaving Sally holding the baby – and the $115,000 debt!
After assisting clients with similar cases we have come to the realisation that the most effective prevention for STDs is honest communication from the beginning. It is vitally important that you both understand how each other “deals” with money, credit, budgeting and your long-term financial goals.
Here are some tips we’ve learned from others for avoiding STDs:
If financial woes are causing you major grief, perhaps cut financial ties. Have separate bank accounts and credit cards. This might be the wake-up call, if you’ve been propping your partner up.
Don’t go guarantor or open a joint account or allow secondary use of your credit card if you don’t understand your obligations.
Do not sign up for loans for your partner – from large business deals to mobile phone accounts – and people often find themselves holding the bag when their partners have stopped paying or are unable to pay.
Try and get utilities on jointly when you set up house. If you split up and move out make sure the gas, water, electricity, etc, are terminated because if your name is on the bills you’ll have to pay them.
If you split up and have a joint account and/or mortgage, advise the bank, and get advice on what you can do to stop infection.
If your partner leaves you for someone else and kindly leaves you with the family home (and all the associated costs) while they takes the cash assets, it’s time to get advice from a lawyer.
Romance is wonderful, but the rose coloured glasses can be deceptive. Keep an eye on joint accounts.
Get advice before signing any documents, especially if you’re not sure what the implications are for you financially.
If an ex has done the dirty on you financially, urgently get hold of your credit file to see exactly what damage has been done. If there are a few black marks on your reports, assess the damage and start the repair jobs, if possible, by contacting the organisations directly.