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November 26, 2020

Don’t Get Left Holding the Debt

Don’t Get Left Holding the Debt

Every day we speak to individuals who are looking for debt solutions. This is no surprise considering we are in the business of helping people to get back in control of their interest and become debt free. However, in recent years we have seen a distinct rise in the number of people who are left holding the debts (and sometimes left bearing the full responsibility for children) at the end of a relationship. In Australia more than 50% of marriages end in divorce, but as we know, de-facto and even non-de-facto relationships can result in sexually transmitted debt as often as marriages can. Whilst no one enters into a marriage thinking that the wedding debt will outlast the relationship, in today’s day and age it is a very high possibility. So, if you find yourself left holding the debt at the end of a relationship, what can you do?

No doubt a breakup is one of the most difficult things any person can go through. The breakdown of any relationship is hard emotionally, and it also often brings a lot of upheaval with living arrangements, family and is even harder if there are children involved. Add these compounding factors, financial stress, and mounting debt, and it’s unlikely that you’ll ever face more difficult circumstances. You may find yourself in a situation where you have lent money, acted as guarantor of a loan, taken out a loan on behalf of your ex, have signed a contract (like mobile phone or car) or have even shared bank account with your now ex-partner. When you made these decisions, your relationship may have been stable and it’s likely that you couldn’t have imagined it ever going wrong! However, we see time and time again, that people have a tendency to make risky financial decisions when they are in the honeymoon period of a relationship. Love, after all, is a powerful emotion. Below we have outlined 5 steps you can take when you’ve caught sexually transmitted debt.

Sexually Transmitted Debt

The term Sexually Transmitted Debt was coined in the 80s by Australian academics. Historically, sexually transmitted debt has had the biggest impact on women, from situations that occur due to:

  • Domestic violence and an imbalance of power within a relationship.
  • Protecting family interests and maintaining relationships.
  • Traditional gender roles in relationships, such as the male assuming control of family finances, and
  • General lack of financial literacy. 

In modern times, of course, gender norms aren’t so fluid. It doesn’t matter who you are, where you’re from or what job you do – anybody can get blindsided by love!

Look At It All

You may feel like you just want to hide away from the reality of your mounting debt. Whilst in the midst of a relationship breakup you should be kind to yourself, you also need to ensure you’re not putting your head in the sand and making life more difficult for yourself down the track. Assess all of your debts, make sure you know exactly where you stand and have all the paperwork together.

Reassess Your Budget

After you know what the situation is and exactly how much debt you are in, it pays to write a budget to work out exactly what you can afford to pay each week. You will also need to consider things like rent, mortgages, or other commitments you may have been going halves in with your partner. This will help you when you speak to your creditors about what you can afford.

Speak To Your Creditors

You may find when you assess your debts that you cannot afford to make minimum monthly repayments on loans, credit cards and other debts. If this is the case speak to your creditors and arrange for hardship consideration. This will allow you to pay off achievable amounts to suit your budget.

Divorce Is Different

If your relationship breakdown is a separation leading to divorce, then you will need to speak to a solicitor. At this time, it is important to make sure you split joint accounts including loans.

Make A Plan

Once you have spoken to your creditors you can now make a more concrete budget including the payments you have negotiated. This will help you to see a way out of the debt, but don’t forget to keep some money aside to do enjoyable things that make you feel good, especially whilst you need some extra nurturing.

Get Professional Debt Advice

If after speaking to your creditors and reassessing your budget you find that you can’t see a way forward, and that your debts are so consuming that the burden of debt will stop you from moving forward, then you should seek the assistance of a financial counsellor to help you come up with debt solutions to suit you. At any stage, if you feel like you cannot manage any type of debt and the stress and worry is affecting you then give us a call on 1300 003 328 or contact us via our website.

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