Sexually Transmitted Debt: Eewww!
You can contract more than just disease by sleeping with the wrong person…watch out for sexually transmitted debt, which can creep into your sex life while you remain blissfully unaware. Your doctor won’t pick up on it; there is no blood test for this one. Your bank book and credit score though: they will bear the brunt of this contagious and insidious plague.
Scott & Sheila had a fiery and tumultuous relationship – one they both loved and hated. Communication was not one of their strengths, and they had very different relationships with money and respective financial backgrounds. Bank accounts aside, they shared many things, including Scott’s credit card, Scott’s credit rating, and Scott’s cash. Sheila never had any of the above, so when it came time to buy a car, a big tv, and any other assortment of elaborate toys at her beckon, Scott was the one to pony up the cash.
Of course, because they were a couple, it didn’t matter that it was Scott’s credit card and Scott’s car loan. They would both pay everything off together, and ride off into the sunset hand in hand. Right?
Sadly, no. They broke up shortly after the last round of purchases, and Sheila managed to kick Scott out, rendering him homeless, with no cash (she drained their bank account), and nothing more than the clothes on his back, a new car loan, and an over-the-limit credit card. Sheila even (initially) kept the car. No matter anyway – Scott couldn’t even afford to put gas in it.
Making no judgment as to what happened behind closed doors to warrant the breakup, Scott was irrefutably the victim of sexually transmitted debt: a virus that took him many years to overcome, and one that he even inadvertently passed on to his next relationship before finally kicking.
Although the scenario above happened with relative innocence, there are people out there who are in the business of sexually transmitted debt. Elderly people or those with disabilities are prime targets. The veil of an initially fulfilling relationship can be lifted to reveal blatant abuse and use of one person’s financial stability for the other’s gain.
Regardless of whether there are honorable intentions or not, there are some ways we all can protect ourselves against sexually transmitted debt:
Avoid Joint Banking
To be an official couple, you don’t need to do your banking together. In fact many married couples get by just fine with mortgages and kids in tow without ever signing on the dotted line together.
If it is easier to have a joint account to pay for household expenses, then simply deposit the minimum amount of money into that account necessary to cover the bills, and enjoy your personal account for the rest. It doesn’t have to be a demonstration of a lack of trust; in fact managing finances separately can allow for one spouse to surprise another with a gift, and also for each spouse to maintain a degree of fiscal responsibility –an empowering and necessary skill at every stage of life.
Don’t Sign as a Guarantor
If you don’t want to see your partner’s debt become your own, then don’t become a guarantor! When you guarantee a loan, you are actually guaranteeing the bank that if the loan recipient can’t or won’t repay the loan, you will. Sure, your employment history or income may look better for qualification purposes, but unless you are prepared to take on the debt as your own, don’t do it.
Here are a few questions to ask yourself if you have been requested as a guarantor:
Co-Borrow at your own Risk
Similar to signing on as a guarantor, your personal financial history might bode well for co-signing a loan with your partner. This will be inevitable if you end up getting a house or car together, but you can add protective measures by ensuring that both spouses need to sign to redraw or increase the loan amount. Generally speaking, only co-sign a loan for an item you both can derive enjoyment from.
Joint Credit Cards = Joint Debt Traps
I had numerous clients who hid debt from one another all the time. Hubby and wife (very solid couples in some cases, I might add) had joint credit cards, but only one person opened the mail. That same person also managed to run up the cards to beyond their limits with impulse shopping purchases. If you have a subsidiary card issued for your credit account, you – and only you - are completely liable for the outstanding amount if your partner goes awol.
Discussing finances openly is difficult for many, if not most couples. And I must note that married and common-law couples (depending on where you live) often have legislation in place that prevents one spouse from escaping the relationship with all the assets while the other bears the brunt of all the debt. But even marriages can dissolve with a few nasty surprises: I have a friend who had no idea that her ex was spending all their money on booze, and many years (and legal battles) later she is still paying off tens of thousands of dollars of their “shared” debt.
Knowing this, how do we avoid all sexually transmitted debt and in so doing not shed trust from our vocabulary or decide to be single for the rest of our lives? Simply put, there is no way to cover off all the bases. One of the keys to a relationship is trust. Love is blinding, but keeping your eyes open and refusing to co-sign a loan might be wrongly construed as a lack of trust. It is a sticky web to navigate, and the only truly effective way to make it through is by talking everything through – even if the initial conversation is painful. If the relationship is to be fruitful – emotionally and fiscally – then both parties have to come to the table with their cards visible, and trust that they’re playing the same game.