Sexually Transmitted Debt
Don’t get stuck with your partner’s debt!
What is it?
Sexually Transmitted Debt is where one person in a relationship becomes responsible for their partner’s financial debts usually after being convinced or misled into taking on debt in their own name, sharing the responsibility, or taking on more risk than they knew about.
In many cases a lender will ask for a second signature, even though the loan is for the primary borrower say for his business, his car etc. The lender is only doing it to spread their risk, however if the loan is sound, there should be no reason for it. This can place pressure on the primary borrower to coerce a partner or even trick a partner into signing a loan document as a ‘witness’ but it really meant signing as a co-borrower. That can result in unwittingly becoming fully responsible for the whole debt if the initiating borrower decides to stop paying the loan.
Women are often vulnerable to STD as they can feel obligated in the relationship to support their partner in debt, or if there is power and control exerted by partner, they may feel compelled to sign for something they are not happy to. It’s a difficult area as relationships are meant to be based on trust and believing the best in your partner. But equally, the financial risks are great if the relationship breaks down or one partner takes advantage of the other. Sadly it happens all too often. One partner – usually the woman – is left with all the debts and no assets when a relationship breaks down or a business fails and banks want their money from the co-borrower.
Ideally, partners sharing finances need to be fully open, informed and aware of all financial information and understand the risks and implications of any loan agreement. If one party is going to derive little benefit from the loan, ideally encourage the primary borrower shop around to get a loan in their own right. Get independent advice from a financial counsellor before committing to anything.