STDs

Before getting into bed, check for sexually transmitted debts

The symptoms affect both genders and all ages. The treatment is usually complex and painful. Beware of sexually transmitted debts (STDs). Getting into bed with your partner’s finances can be risky, especially if debts are hidden or if you guarantee a loan—and are then saddled with payments for a long-gone asset and ex.

In one Vancouver case, a man had no idea his wife had amassed $130,000 of debt and obtained credit in his name. Such a case could result in one spouse charging the other with fraud. Accordingly, prevention of STDs is better than cure. Both parties need to put their (credit) cards on the table and be candid about finances and goals.

“I’m always amazed at how little people talk about money—it’s quite shocking,” says Heidi Pullem, a certified financial planner with ZLC Financial Group. “People might be madly in love and think it’s going to jeopardize things, but I get couples in front of me who have no idea what the other person is thinking.”

Key issues include debts and savings, RSPs and their beneficiaries, risk tolerance and financial compatibility. A spendthrift and a penny-pincher can find harmony with clear communication and expectations. This also shows relationship strength, according to Margaret Johnson, president of Solutions Credit Counselling Service.

“People have often gone into a new relationship with their hearts instead of their heads, and they’re not really asking ‘Are we financially compatible?’” she explains. “I ask ‘Have you read your partner’s Credit Bureau file?’ and they look at me like I have
two heads.”

Partners should also be candid about debts such as family or student loans, or co-signing for someone’s credit. “This could be $50,000 to $60,000 that’s coming into your life and family budget now,” Johnson adds.

Other advice includes wills, separate accounts—his, hers and house—with three different banks, and pre-nuptial agreements, especially if one partner has significantly more wealth. Combining assets or loans should be done with “extreme caution” and red flags should fly if your signature is needed because a bank won’t lend to your partner as an individual.

“It’s very important to do a lot of soul searching before you co-sign a loan,” Johnson adds. “If you do, you should get copies of the statement sent to you each month so you can see the debt is being paid off.”

Pullem provides the final word: “Prevention is key—couples need to be very clear with each other. If you have a big financial conflict between you, it’s better to find out before you give up a career and have three small children. It can be quite ugly to do a forensic audit later of whose debt it is.”

Words | Sarah Roberts