Love Bites: Protecting Yourself From Sexually Transmitted Debt

There’s something about vampires. Just ask the eternally beautiful teenagers of the Twilight saga – nothing says ‘romance’ like a mysterious stranger who longs to nibble on your neck. The real world may not have an Edward Cullen, but it’s got another kind of vampire that can be just as seductive and dangerous – the financial vampire. These predators won’t be eyeing your jugular, but if you’re not careful they’ll infect you with a nasty case of Sexually Transmitted Debt.

You catch Sexually Transmitted Debt by taking responsibility for a loved one’s debts – and footing the bill when they default. It’s a serious condition that can damage your credit reference, bring debt collectors to your door and even bankrupt you. And it’s more common than you might think. A report by the Law Reform Commission NSW (Australia) revealed that 83 per cent of people who guarantee loans are in close personal relationships with the borrower, and 49 per cent don’t believe they could repay the loan if required, so it’s easy to see how helping out a loved one could have you haemorrhaging money.

There are three main ways you might contract Sexually Transmitted Debt:

• co-borrowing with your partner. You are both responsible for repaying the loan. If your partner doesn’t keep up the payments you could become liable for the entire amount;

• becoming a guarantor for a loan. This is guaranteeing your partner’s ability to repay it, and if they can’t or won’t, you’ll have to;

• taking responsibility for the utilities. When the bills arrive they’ll have your name on them – even though you’re both using the services.

Women are more likely to suffer from this ‘STD’ than men – a study by Veda Advantage found that 58 per cent of utility bills were in women’s names so it seems that they’re more than paying their share. Men are also more likely to be the cause of debt: over a five year period they accounted for 55 per cent of defaults. A creditor can sue either co-borrower if they stop receiving payments on a loan, but they’ll probably go after the most reliable party and statistically, that’s often a woman. That said, there are female vampires out there, so it’s not safe to assume you’re immune because you’re a man.

So how do you ward off financial vampires? Well, like the bloodsucking kind that can’t come into your home uninvited, financial vampires can’t take your money unless you let them. The simplest way to protect yourself is to avoid giving your partner access to your funds. Don’t put their name on your credit card or help them borrow money. If you are considering co-borrowing or guaranteeing a loan, read the contracts carefully and make sure you get independent legal advice before you sign anything. A signature on a financial document is a legally binding agreement, so if you couldn’t repay the entire amount if you had to, don’t sign. But Sexually Transmitted Debt isn’t always passed on intentionally – sometimes your partner may need to stop their repayments because they lose their job but you’ll still be liable, so think twice about taking on financial responsibilities even if you trust your partner completely.

But what if you’ve already been bitten? Finding out that you have an unexpected debt can be a shock, but there are things you can do. Sometimes a court will overturn your liability if you can prove that you didn’t understand what you were signing, but the unfortunate truth is that in 90 per cent of cases you just have to pay up. In that case, contact your creditors and explain the situation – they might help you arrange a payment plan that won’t send your budget into the red. If you need more advice about how to do this, take a look at Your Family Your Money’s articles on debt management for more detailed strategies for eliminating debt and dealing with creditors.

Looking at your partner as a potential financial predator isn’t easy. And the good thing is they usually won’t be. But if your partner cares about you, they’ll understand it’s important to protect your finances – and they’ll want to protect theirs, too! Avoiding taking on unnecessary liabilities can save you a lot of heartache and keep a good relationship strong … and if you are seeing a financial vampire, you’ll be able to keep their fangs out of your bank account.

A quick guide to coping with redundancy

Going through a redundancy is one of the most stressful things a family can face together. It brings some enormous changes and requires a great deal of teamwork for a family to pull through it together, instead of being torn apart. But there is a bright side to redundancy, as it brings the perfect opportunity for a family to make drastic changes, reach powerful decisions and explore options that may never have been considered in less extreme circumstances.

Unemployment figures are predicted to rise throughout 2009 and possibly until the end of 2010; for many families the possibility of facing a redundancy is fast becoming a reality. Looking at such figures is enough to bring despair to many people, yet amid it all there are the success stories – people who deal with redundancy from a positive perspective and demonstrate that it doesn’t have to be a devastating blow to a family. With the proper guidance and a strong support network, a redundancy can be the opportunity of a lifetime, allowing you to shake off the shackles of a ‘career’ and take your life in a positive, new direction.

Take one step at a time
One of the first steps a family needs to take when dealing with a redundancy is rebuilding a positive attitude. New employers are never going to be attracted by a negative demeanor and surviving the sometimes grueling application and interview process as you hunt for a new job in a tough market is absolutely going to need energy and confidence. The flip side of the high unemployment coin is the fact that there are now more people competing for each position advertised, and to stay in the game you’re going to need to change the way you think and behave, becoming a proactive advocate for yourself and your skills, building a network of contacts and brushing up on the art of self-promotion.

A great place to start is with updating your CV. This simple step is a great morale booster – it’s a positive activity that allows you to feel as though you’re taking an active role in tackling the challenge you’ve been faced with and it gives you a chance to rebuild your confidence in your skills and experience. Everything you’ve done, everything you’re capable of achieving, and all of your skills are right there in front of you in black and white. Take a good look at everything you’ve done so far and take a moment to envision what you are able to do in the future. Enjoy this moment – it’s the culmination of years of hard work and experience and you deserve to dream a little as you decide which direction you’re going to take from here. This is one area where family members can offer support as they help you to decide what courses you may need to take to brush up on certain skills, help you to refine your interview technique, look at services that assist in the creation of effective CVs and cover letters, and even give their opinion about which jobs they think you’d be best suited for. The entire family needs to come together and work as a team – everyone will need to dig deep if the family is going to stay strong and united during this time.

Look at new options
It’s tempting to stick with what you know, the same industry, similar roles, similar organisations. It’s comforting because it’s what you’ve been working on for years, you feel it’s what you do ‘best’, but unless you are passionate about it, why waste this opportunity to take a fresh look at the options available to you? The government runs and funds many training programs specially designed to help people transition through redundancy and re-skilling them for new careers in industries where jobs are available. Have a think about whether you want to spend the rest of your life doing what you’ve always done, or whether it’s time to embrace the chance to try your hand at something new. In a very short time you could be heading to your first day in a great new job doing something you love, instead of slogging your way through the nine-to-five grind of doing what you thought you ‘had’ to. Take the plunge, start a new life and embrace everything that the silver lining of the redundancy cloud has to offer!