How to avoid an STD – a sexually transmitted debt!

So, Angelina  Jolie filed divorce papers in the Los Angeles Superior Court on Monday, citing irreconcilable differences, court documents showed. Both her and Brad will need to be beware  of  catching an STD – a sexually transmitted debt!

A sexually transmitted debt is the financial obligation involved when one partner agrees to be jointly responsible or act as guarantor for their partner’s debt. This is especially likely to occur when one partner is unemployed, a student, struggling with a low income or on benefits. While you may be understandably keen to make your partner happy, be careful not to lose your head and trash your finances and credit rating in the process.

  • Signing a piece of paper to help your partner buy a shiny new car or take out a new mobile phone contract might not seem like such a great idea down the track, when your relationship has soured and your dream lover has turned into a deadbeat ex.
  • If your partner (or ex-partner!) doesn’t make their repayments, it’s your door the debt collectors will be knocking on.
    The consequences of a sexually transmitted debt can be huge. So while you’re enjoying being loved up and happy, be sure that you also take steps to protect your financial wellbeing.

How do you catch a sexually transmitted debt?

While anyone who is in a relationship can fall victim to becoming liable for their partner’s debt, when you’re in a new relationship you are especially vulnerable.

When you’re all loved up and happy, especially in the early stages of a new relationship, you can tend to lose your head a little. You’re keen to help your partner and just want them to be happy.
Agreeing to act as a guarantor for your partner on a loan, or putting services like their mobile phone, utility bills or other accounts in your name means that you are liable for these debts if they can’t or don’t make their repayments.
While this may be a risk you’re happy to take now, you might regret it later when the honeymoon phase of your relationship is over, or the relationship ends – and you’re the one left paying all the bills.

How to prevent relationship debt

  1. Have the talk! Sure, it may seem unromantic but along with love, money makes the world go round, right? We’d all be a bit lost without it.
  • Consider taking a  money personality test.
  • Be open and frank about your financial positions and credit histories.
  • Discuss and compare your financial goals.
  • Have a chat about your attitudes towards spending and debt.
  • Talk about paying bills. Does your partner always pay them on time – and if not, why not?
  • This should give you a good indication of your partner’s habits with money and credit repayments, and let you know if any alarm bells should be ringing.

While you may not both be on the same page financially, it’s important that you know and understand one another’s financial position if you’re going to consider joint debt and obligations.

2. Don’t enter into a joint loan without having a clear understanding of your obligations and the risks involved.
For example, if you act as guarantor on your partner’s loan and they’re unable to make the repayments, you’ll be liable for making them – but you won’t have any ownership of the asset the loan was for.
3. If you’re living together, have your lease and utility accounts in both of your names. This means you’re both equally responsible for those bills.
4. If you’ve got a credit card, it’s best not to have a secondary card holder. If you do give your partner a card for your credit account, be sure you regularly check the spending and your statements to ensure it isn’t misused.
5. If you have a joint loan account, make sure both of you need to consent to any redraws on the loan.

What you can do to protect yourself

The simplest protection is to just say no if you’re asked to guarantee a loan for a partner.

  • While neither of you may want to believe there’s a possibility the relationship might end one day, it’s important that you both understand that acting as guarantor or taking on debt for another person is a significant and risky financial commitment.
  • If you do agree to guarantee a loan or take on an account of financial obligation for your partner, be very clear that you know what you’re getting yourself in for. Be sure you know and are comfortable with the exact amount, purpose, time frame and repayment amounts.
  • Be sure that your partner can afford the debt you are guaranteeing for them. Do the sums yourself – do they have enough money to repay the debt?
  • Remember that you’ll need to cover any repayments they can’t make, or you risk damaging your own financial well-being and your credit rating.

What to do if things go wrong

If your relationship ends and you’re worried about incurring debts from your ex, here’s some tips on what to do.

  • Open a bank account in your name only. Make sure this is where your income, benefits and any other payments are directed.
  • Close any joint accounts you have with your ex. If you have any joint debts, consider paying these with the funds remaining in your joint account before you close it.
  • Tell your bank and any other lenders and organisations you have joint accounts and debts with that your relationship has broken down. If possible, do so in writing and get their written acknowledgement.
  • If you have a credit card with your ex as a secondary card holder, cancel it.
  • If you change address, update your details with any relevant organisations. Make sure copies of any joint accounts and debt statements are sent to you.
  • If you are the sole account holder for any debts you may have previously shared with your ex, such as your electricity bill, contact your provider to explain your situation. It’s much better to negotiate a manageable repayment plan than risk missing payments and tarnishing your credit file if you can’t manage the payments on your own.
  • Remember, only you can protect yourself from sexually transmitted debt – the decision is yours! Most importantly, make sure you and your partner have open and honest discussions about money. When it comes to finances, trying to keep the emotion out of your discussions may help to avoid any nasty surprises.