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Love bites - protecting yourself from secually transmitted debt

Analaura Luna

There’s something about vampires. Just ask the eternally beautiful teenagers of the Twilight saga – nothing says ‘romance’ like a mysterious stranger who longs to nibble on your neck. The real world may not have an Edward Cullen, but it’s got another kind of vampire that can be just as seductive and dangerous – the financial vampire. These predators won’t be eyeing your jugular, but if you’re not careful they’ll infect you with a nasty case of Sexually Transmitted Debt.

You catch Sexually Transmitted Debt by taking responsibility for a loved one’s debts – and footing the bill when they default. It’s a serious condition that can damage your credit reference, bring debt collectors to your door and even bankrupt you. And it’s more common than you might think. Assisting your partner financially might seem natural, but community workers report that one in five of their clients have been bitten by a financial vampire and are haemorrhaging money.

There are three main ways you might contract Sexually Transmitted Debt:

• co-borrowing with your partner. You are both responsible for repaying the loan. If your partner doesn’t keep up the payments you could become liable for the entire amount;

• becoming a guarantor for a loan. This is guaranteeing your partner’s ability to repay it, and if they can’t or won’t, you’ll have to;

• taking responsibility for the utilities. When the bills arrive they’ll have your name on them – even though you’re both using the services.

Women are more likely to suffer from this ‘STD’ than men – a study by Veda Advantage found that 58 per cent of utility bills were in women’s names so it seems that they’re more than paying their share. Men are also more likely to be the cause of debt: over a five year period they accounted for 55 per cent of defaults. A creditor can sue either co-borrower if they stop receiving payments on a loan, but they’ll probably go after the most reliable party and statistically, that’s often a woman. That said, there are female vampires out there, so it’s not safe to assume you’re immune because you’re a man.

So how do you ward off financial vampires? Well, like the bloodsucking kind that can’t come into your home uninvited, financial vampires can’t take your money unless you let them. The simplest way to protect yourself is to avoid giving your partner access to your funds. Don’t put their name on your credit card or help them borrow money. If you are considering co-borrowing or guaranteeing a loan, read the contracts carefully and make sure you get independent legal advice before you sign anything. A signature on a financial document is a legally binding agreement, so if you couldn’t repay the entire amount if you had to, don’t sign. But Sexually Transmitted Debt isn’t always passed on intentionally – sometimes your partner may need to stop their repayments because they lose their job but you’ll still be liable, so think twice about taking on financial responsibilities even if you trust your partner completely.

But what if you’ve already been bitten? Finding out that you have an unexpected debt can be a shock, but there are things you can do. Sometimes a court will overturn your liability if you can prove that you didn’t understand what you were signing, but the unfortunate truth is that in 90 per cent of cases you just have to pay up. In that case, contact your creditors and explain the situation – they might help you arrange a payment plan that won’t send your budget into the red. If you need more advice about how to do this, click here to see Your Family Your Money’s articles on debt management or pick up a copy of Real Money Advice for Families for a more detailed discussion of strategies for eliminating debt and dealing with creditors.

Looking at your partner as a potential financial predator isn’t easy. And the good thing is they usually won’t be. But if your partner cares about you, they’ll understand it’s important to protect your finances – and they’ll want to protect theirs, too! Avoiding taking on unnecessary liabilities can save you a lot of heartache and keep a good relationship strong … and if you are seeing a financial vampire, you’ll be able to keep their fangs out of your bank account.

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Tags: relationship debt, sexually transmitted debt, couples money planning, relationships and money

Author's Biography

Analaura Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.