Kiwis warned of sexually-transmitted debt epidemic

Sean did not realise his wife had racked up $30,000 in credit card debt in his name.
LAWRENCE SMITH/FAIRFAX NZ

Sean did not realise his wife had racked up $30,000 in credit card debt in his name.

Otago woman Louise* is still burned by the experience of being left in debt for years by a husband who spent far more than they could afford.

He racked up thousands of dollars in consumer debt, which he left her to repay alone, while she lived on a benefit, trying to raise their children.

They broke up and got back together three times. Each time the break-up left her with more of his debt to pay off. The first time, it was $7000, which she battled away to pay off at $10 a week. 

Then it was $2500 for a new computer, which she was sent to Baycorp over when she could not keep up with the repayments. The third time, she had cleared all the previous debt, only for him to splash out on new bikes for the kids.

"It really was the last straw," she remembers. "Every time he came back, he bought something and I ended up paying."

READ MORE: Give your relationship a financial health-check before you move in together

Sean* knows how she feels. He was married for 10 years before he discovered that his wife had a secret credit card in both of their names, with a balance of $30,000.

Retirement Commissioner Diane Maxwell says people need to be brave and have conversations about money with their partners.
SUPPLIED

Retirement Commissioner Diane Maxwell says people need to be brave and have conversations about money with their partners.

He took out a $15,000 loan to pay it back, then suffered an accident that led to him losing his job. He almost went bankrupt and spent years paying the loan back.

Years later, the experience came back to bite him when, trying to buy an engagement ring for his new partner, he was declined finance because his credit score had been so badly affected.

A new survey shows 28 per cent of New Zealanders have been financially hurt by a romantic partner.

Nearly 18 per cent said they kept money or some other aspect of their financial lives from their partners.

People reported racking up secret credit card debt behind their partner's back, their partners refusing to pay their share of a debt after a relationship ended, people who said they were paying household bills - but were not, and even some who forged their partner's signature on loan documents.

Many people only found out what was happening when it was too late and their credit score had been affected.

Hazel Phillips, head of credit rating provider Credit Simple, said most people did not check their credit records until they needed to borrow money.

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"Then it comes as a shock when there is a default on their file and the loan is denied. The number of Kiwis uncovering secret debt or finding out joint bills in their name haven't been paid is surprisingly high. Knowing your credit score, and checking it regularly, is the best way to know if you've contracted sexually transmitted debt, and work to repair it." 

The survey found almost 18 per cent of New Zealanders admitted having money or debt their partner was not aware of.

Of these people, women lie the most often about finances - making up 64 per cent of those doing it.

The majority of people keeping finances secret from their partner were hiding private bank accounts or cash reserves (67.3 per cent), while almost 18 per cent had secret debt.

But nearly 12 per cent of people suspected their partner was hiding a bank account or debt from them.

Retirement Commissioner Diane Maxwell said people needed to be more willing to talk about money.

The Relationship Property Act gives people rights to their partners' assets after three years living together. In some cases, it can also make them liable for debts.

"When you're in love and meet someone, women in particularly feel it wouldn't be romantic to raise issues of money and ownership of property. They don't want to burst the bubble," Maxwell said.

"Some women in their 50s or 60s who have been in long-term marriages and are mortgage-free, they don't understand that within a few years someone else does have rights [to their property]."

She said both parties needed to have a clear understanding of what each owned and owed. 

You can draw up a "contracting out" agreement if you do not want the Relationship Property Act to apply.

Maxwell also urged people to take care when signing a personal guarantee for someone else's loan, even if it was a spouse.

"I would never sign one for anyone," she said. "The need for a personal guarantee signals a higher risk so you have got to ask why they are being asked to do that."

She said having frank conversations about money was part of life. "Anyone who runs for the hills because you are seeking to protect yourself ... maybe you could do better because if they love you, they would want to protect you, too."

* Names have been changed to protect their identities.

 - Stuff

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