Financial ties can be as harrowing as emotional one: Is your partner a secret debtor?

Hidden money problems are behind the breakdown of one in 10 relationships

Talking about money isn’t the most romantic conversation to have with your partner, but it could end up saving your own pocket and your relationship.

Financial ties can be as harrowing as emotional ones – a recent survey found one in 10 have split up or divorced due to hidden credit-card purchases – so make sure you know how your partner’s finances affect you and look out for tell-tale signs they are hiding debts.

In a survey into credit-card spending habits, comparison website MoneySuperMarket found that of the 15 per cent who admitted to lying to their other half, a third  (36 per cent) said this was because they knew they would be angry. A partner keeping their credit-card bills close to their chest is not necessarily a concern if you’re confident they keep on top of them, but if your household budget is under pressure, secret spending can easily spiral into a much bigger problem for the both of you.

MoneySuperMarket editor-in-chief Clare Francis says: “One of the worries about people who spend in secret is that they do so because they know they can’t really afford it and in the long run it just makes things worse as they can end up saddled with debt and with relationship problems. No pair of shoes is worth that!”

While you cannot be made to pay your partner’s debts, if you have any joint finances such as a mortgage, loan, or even a bank account with an overdraft, you need to be aware the lender will consider you both “jointly and severally responsible”. You are liable for the whole debt, not just half, so if your partner can’t or won’t pay, you can be pursued for the entire debt, whether you can realistically afford it or not.

“You may be directly affected by court action. For example, a charging order may be registered against the home if it’s mortgaged and your partner’s name is on the deeds,” says Jonathan Chesterman of debt charity StepChange. “If your partner was declared bankrupt, and there is equity in the house, you could find you’re forced to sell or buy them out.”

Your credit file and ability to get credit in the future may also be affected. If you have a joint debt, or have previously made a joint-credit application, your partner will show as an “association” on your credit file. If you later apply for credit in your own name, the creditor could decide to check your partner’s file.

Ian Williams of Debt Advisory Centre warns against signing up for joint-credit agreements without knowing all the facts, pointing out that 10 per cent of their clients say their debt problems were caused by a relationship breakdown: “It highlights the importance of reading contracts properly before you sign them. If you’re giving someone else the power to borrow money in your name, are you prepared for  the consequences?”

With all these potential problems in mind, what are the signs that your partner is having money troubles?

Hiding letters and dodging calls will obviously raise some red flags, but there are other signs that your partner is struggling. People often forget that borrowing via a bank account is still debt but charges and interest rates on current accounts are among the highest available. If your bank suspects an account holder is in trouble, they may even take away the overdraft with little to no warning so anyone who finds they are constantly overdrawn needs to take a good look at their spending.

If your partner is constantly flashing the plastic to pay for everyday goods, this could also be a sign that they are failing to make ends meet. Taking out new credit to pay off existing credit is another giveaway that they aren’t coping, and if they are considering using a payday loan, sit them down and ask why. These loans are designed to cover one-off expenses until the next pay packet, but missed-payment charges and interest rates in the payday market are extortionate so the debt can quickly spiral out of control.

Working together to fix your debt problems is important. Be open and honest with each other and try to share the workload if possible. If you both have a grip on the household budget you’ll be in a much stronger position, particularly if either of you is hit with an unexpected obstacle such as falling ill or losing your job. You can protect each other against fixed debts such as loans and mortgages with life and critical-illness cover  or income-protection insurance. Debt charities such as StepChange and Debt Advisory Centre will also help you deal with creditors, find ways to cut back on expenses and check for any benefits to which you may be entitled.

If you do split up, tell the credit-reference agencies and file a “notice of disassociation” on your credit record informing lenders you have no financial links to that person.

“They will probably not be the first on your list when it comes to spreading the bad news, but by separating yourself financially from a previous partner you are protecting your own credit rating for the future,” says Steve Rees of debt consultant Vincent Bond & Co, who explains that you should check your credit record at all three agencies at www.experian.com, www.equifax.co.uk, and www.noddle.co.uk to get the fullest picture as each may hold slightly different information.

Make sure you know your rights. You cannot be forced to cover a partner’s debt if only they signed the credit-card agreement, even if you are an additional card holder who helped build up that debt. If your partner dies with debts, creditors may be able to recover their money by making a claim against their estate, but they are not entitled to pursue you for payment from your own money. If your significant other dies leaving no assets, the debt is not recoverable and you should send a copy of the death certificate to  creditors.

Case study: "He had been gambling on the quiet... hiding the debt for months"

Anne, a teacher from the West Midlands, only knew about her  ex-husband’s debts when bailiffs arrived to take possession of their household goods.

Anne’s  husband had built up debts totalling £70,000 over several years without her knowledge.

“We didn’t live a particularly lavish lifestyle – a couple of foreign holidays a year a new car every five years – but he pretended to be doing better than he was in his career, saying he had a promotion here or a bonus there.

“It was all false though and he had been gambling on the quiet.”

When Anne found out about the debt her husband confessed all.

“He had been hiding the debt for months – opening post in both our names and even saying the phone was out of order to avoid me picking up calls from debt-collection agencies,” she said. 

Fortunately, Anne was able to keep the family home for her and her child but the relationship didn’t survive: “I had a lot of help from a debt charity and it took several years to extricate my finances from his but we are now divorced.”

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

    The 161-page dossier that exposes Fifa's dark heart

    How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
    Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

    Exclusive interview with Tripoli PM Khalifa al-Ghweil

    'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
    Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

    Raymond Chandler's Los Angeles

    How the author foretold the Californian water crisis
    Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

    Art attack

    Chinese artist who posted funny image of President Xi Jinping facing five years in prison
    Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

    Cher is the new face of Marc Jacobs

    Alexander Fury explains why designers are turning to august stars to front their lines
    Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

    'I'm climbing Ben Nevis for my daughter'

    Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
    10 best wedding gift ideas

    It's that time of year again... 10 best wedding gift ideas

    Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
    Paul Scholes column: With the Premier League over for another year, here are my end of season awards

    Paul Scholes column

    With the Premier League over for another year, here are my end of season awards
    Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

    Liverpool have seen too much tragedy to forget Heysel

    Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
    Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

    Khan’s audition for Mayweather may turn into a no-win situation

    The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor