I have recently learned that my husband took out several credit cards behind my back, and has maxed them out. Can you tell me; am I responsible for these debts even though I didn’t know the credit cards existed in the first place?
I am so sorry that you and your husband have found yourselves in this unfortunate, and often easily avoided, situation. I am not sure if you are aware, but more than 55 per cent of all relationships suffer from some form of financial infidelity. This means anything from hiding purchases and trivializing debt problems to opening an account without your partner’s knowledge.
Unfortunately, situations like yours not only harm the trust in your relationship, but can also do considerable damage to your financial health.
To start, I would pull copies of both your TransUnion and Equifax credit reports to see if you are listed on any of the accounts. If the accounts do not show up on your credit report, you are in the clear and not responsible for the repayment of these debts. However, if your name is associated with the accounts you are responsible for paying them back.
If paying off these debts is not possible in your household budget, I strongly recommend that both you and your husband ask for help now – before your troubles with debt get worse. Help could mean asking your creditors to consider a repayment plan, negotiating lower interest rates or exploring debt relief strategies with a trained credit counsellor.
When it comes to the larger issues of financial trust in your marriage, both you and your husband have a lot of work to do. While I understand that issues of financial trust can be devastating on a marriage, you can overcome this and begin an open and honest conversation about your future financial health.
Here are some suggestions to get you started:
- Be open and honest about your finances – Now is the perfect opportunity for you both to lay your cards on the table. Come clean and share all personal debts with each other.
- Address the root of the problem – Is your husband a compulsive shopper? Does he have a gambling problem? Does he simply not feel comfortable discussing money? Now that you are aware of the debt problem, you can begin to explore how you got to this point.
- Create some ground rules – Work together to create a new set of financial rules for yourselves and the household. Decide on these rules as a team.
- Budget – Budgeting is essential to any healthy financial strategy. Sit down together and draft a budget that includes all incomes, debts and accounts – even the ones that were kept secret. Budgeting will allow you to remain on the same financial page.
- Pay back those debts – Find areas of your budget to cut in order to address the outstanding debts. I know you may not think of these as your debts, but remember, you made a promise to support each other in good times and bad and for richer or poorer – this just happens to be one of those poorer times.
- Be transparent – Don’t forget that you’re a team. Tackle your finances together. Make a point of paying bills together and ensure that all accounts be accessible to one another.
- Talk about money – Having regular conversations about your finances will go a long way towards repairing both your relationship and your finances. Make all financial decisions together and set aside time for “money dates” where you can review your budget, spending and debt obligations.
Jeffrey Schwartz is the Executive Director of Consolidated Credit Counseling Services of Canada and President of the Credit Association of Greater Toronto (CAGT).
If you have a question about a debt management program or just about finance in general, Jeff is here to help. Send us an email with your question to AskJeff@ConsolidatedCredit.ca. You’ll get the expert advice you need and your question may be featured here on our website.