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Are you hiding your debt from your partner?

Friday, 16th November 2018

Do I tell my partner about my debts?

Hiding debts is something we tend to not think about too much when living with someone but it happens. It’s difficult to come up with an accurate number of those hiding the amount they owe creditors but falling on my experience in debt management I would suggest it can effect anywhere between 30-50% or all relationships. It’s life and some people can be very secretive.

I got a stark reminder of this earlier this year when I was on a LBC debt phone-in show 1 January 2018 (10 mins) when the first caller Marie shocked the presenter by saying she had been hiding her £30,000 plus credit card debt for over a year from her husband. To make matters worse the family home was jointly owned. This means the other half will find out sooner or later, more on this below.

A classic example where debt can be hidden in a relationship is if both parties have separate bank accounts. That way neither one really knows the true extent of each other’s finances as they will not have access to the credit agreement, bank account or credit/store card.

Signs that someone has a debt problem

According to The Money Advice Service (MAS) there are some classic signs that maybe you have not been looking for in the past but they are going on now, any of these happening?

  • They have been in debt before
  • They seem tired or are having trouble sleeping
  • Their weight has changed suddenly – either increasing or decreasing
  • They seem anxious, withdrawn or depressed – less time socialising with friends
  • They may seem more secretive – starting to hide issues and avoiding talking about finances
  • They have had a recent life event (trigger) – such as new baby, being made redundant, illness, divorce or a death in the family
  • They are living beyond their means – always seem to have the latest ‘must have’ items, new clothes, new car etc, but don’t have the income to cover this
  • They have changed their spending habits – either reducing spending (e.g. going on fewer holidays or eating out less) or overspending with no plan for repayment for example putting luxury items on credit

What can be done?

In the call to LBC Marie said she could not discuss this debt problem with her partner. Is this because the relation is more fragile than strong? Will her husband just not understand, is he squeaky clean with no debt other than the mortgage? Would he feel it’s her own fault if she has debt issues?

If I had more time with Marie I would have encouraged her to speak with her husband simply because there will be a time when he will find out. The most common way is he is rejected for credit or a financial service. He will begin to wonder why, maybe challenge the lender/provider why he has been refused and slowly it will start to come out. Marie and her husband are ‘financially connected’ because they have a joint loan, the mortgage, and this is where potential lenders will see Marie has over £30,000 in debt and such information could tip a lender's decision towards rejection for the husband.

However, before Marie talks to her partner I would advise her to find out what her options were first, maybe enter into a repayment plan or have all the information ready so as to demonstrate to her partner that there is a solution to the problem and that she is dealing with it.

Get your timing right

If you are going to have a discussion about debt worries then it is important to get your timing right, not a good time to start talking about debt problems as he/she is leaving the home or friends are due round that evening. If you are the one with the debt problem you could just say, "I need some help or advice on a delicate matter," and maybe not reveal the full extend of the debt, just saying, you are having a few problems paying your creditors and was thinking of this debt option etc. If your partner is receptive and cordial then you may want to say a little more. If you suspect your loved one is in financial trouble you could do some research as to his/her option (see below) and perhaps say someone at work came to you because they had debt problems and you helped him/her out. This may lower the defences somewhat to enable a discussion. Try and remember not to be judgemental, instead be supportive!

What caused the secret debt?

There are six main triggers why people fall into unmanageable debt, these being; separation of relationship, loss of income through unemployment, long term illness, maternity, addiction and poor budgeting. There may be other reasons such as propping up a failed business using credit cards, I see this a lot. I was unable to find out what triggers Marie had but I’m sure there was one or two of the above there.

The debt options and comparison table

You can see more details of the six options available when debt problems arise on the link at the end of this article. All these options, except for No.3 where you pay creditors in full, will affect the credit rating.

There is also a bespoke debt solutions table. This chart illustrates a summary of possible debt solutions, where you can compare the options available. The table details which options freeze interest and those that can stop the creditors chasing for the debts! Not all will apply, it depends on the level of debt, assets and how much spare money one has after paying essential bills.

Next time I’m on LBC I might ask for Marie to call the show to see how she is getting on, will let you know what happens.

Debt Solutions Explained & Debt Solutions Comparison Table 

Need help

If you need more information for yourself or a family member then either make contact on the number at the top of any page on the website or visit the DebtWizard forum, I'm always on there. I also have a list of organisations that are not for profit and 100% free to the consumer, they can be found here

REMEMBER, it is not a crime to be in debt - always insist that you are treated with respect and this includes with your partner or loved one.

 

 

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