Is your spouse hiding debt? Recovering from financial infidelity

Is your spouse hiding debt? Recovering from financial infidelity

Infidelity is always devastating. But if your spouse or partner has been cheating on you by hiding pricey vices or illicit spending sprees, the consequences can be far worse than an affair, for the simple reason that money — often large sums of money — are involved.

As one reader wrote to us, after a similar article ran on on DailyWorth:

My ex took out a credit card in my name and ran up $40,000 debt without my knowledge. Now I'm paying it off. I asked the credit card company to investigate the matter as fraud, but they didn't. It doesn't seem like I have many rights. As I found out, there were many secrets behind the numbers. Right now, I'm waiting for the divorce to come through.

Although incidents of identity theft and fraud are well-documented — and can be prosecuted — spouses who are the victims of their lying, cheating partners often have little recourse. As another woman wrote:

I just checked my credit report, and found out that my husband ran up $18,000 on one of our cards — when I thought we only owed $400. I confronted him, and he admitted it, but now what? He doesn't have the money to pay it back.

To recover from financial infidelity, you need a two-pronged strategy. You need to shore up the non-financial side of your relationship and, at the same time, tackle the actual money mess.

The Mess

The first step is to find out where the money went and how much is owed, says credit expert Erica Sandberg, a columnist for Creditcards.com. Your credit report contains a list of all open accounts; ask your mate to show you all statements. In addition, your mate may have accounts opened in his or her name. These would show up only on their credit report, so ask them to come clean.

As you examine the statements, what you discover may be shocking. Your spouse wasn't just deceiving you about debt; it's likely that he or she was hiding habits (perhaps even vices) that cost a pretty penny.

To clean up the mess, you've got two main tasks:

  1. Your mate's secret spending has to stop (and the habit itself addressed).
  2. The debt has to be repaid.

So, the second step is to make a debt repayment plan. While you may not feel that the debt is your problem, until it's cleared up (or you split up, if that's the case) it will affect you. First, have your mate sell any purchases they bought when they were cheating, and put that money toward the debt. Insist that they get a part-time job or work overtime.

Next, depending on the extent of what's owed, credit counseling may be in order. (Two reliable sources for credit counseling are the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies.) At worst, you may need to consider bankruptcy.

Otherwise, create a budget, reduce spending, apply all excess funds to the debt, and stop charging until the balance is at zero!

The Marriage

As you address the financial problems, talk. Your partner's financial infidelity is a red flag that you two are out of sync — and not just about money. Make time for regular discussions about the life you have and the life you want. As the great Russian writer and philosopher Leo Tolstoy once wrote, “What counts in making a happy marriage is not so much how compatible you are, but how you deal with incompatibility.”

Piggymojo is a new saving site, where couples can set a goal (in this case to save enough to pay down your debt), and find new ways to talk about money.

You may also want to seek professional help. Few relationships can survive this kind of strain without counseling. If you're both invested in staying together, then it's worth spending some money on a therapist who can help you, especially if gambling or other addiction issues are involved.

Lastly, if your spouse has committed financial infidelity, you may need to take a long hard look at your own money habits and head-in-the-sand behavior. As one reader described her sister's loss of nearly $120,000 thanks to her husband's secret gambling problem:

The moral is, you can't afford to become a passenger in your own finances. Looking back, my sister said there were so many warning signs. But because her husband said he was taking care of the bills and expenses — and she believed him — she didn't know what was really going on until it was too late.

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Thisiswhyubroke.com!
Thisiswhyubroke.com!
10 years ago

I agree! We all know when somethings going awry. If she works at walmart, but shes coming home with Prada shoes and your savings account balance HASN’T changed? Shes smoking that credit crack.

Stephan
Stephan
10 years ago

its all about communication. if there isnt any in your finances, then there most likely isnt any in your marriage. If there is trust in the marriage, any problems should pop up way before thosuands of $ of debt have accumulated.

S
S
10 years ago

The wakeup moment for my Mom, when going through separating/divorcing, was when her lawyer told her to check with the mortgage company to see if the mortgage was being paid as promised. It was but that was when she finally realized to take her financial matters into her own hands…

Liz
Liz
10 years ago

I thought I was pretty financially savvy – then my spouse opened a credit card without my knowledge and paid it with money orders. I only found out when I got his credit report. We are divorcing now but what I am finding is that even if a judge orders that certain debts are his responsibility in the divorce decree, if he does not pay the bills I may still be liable. Forget blood tests, make couples examine each other’s bank accounts before they can get married.

Nate
Nate
10 years ago

My mother has no idea that my father has over $120,000 in credit card + home equity debt… I don’t know that she wants to know – she has been a stay at home mom her whole like – and dad was a crazy spender. They will have nothing in retirement – but they also don’t talk about this and what they might do to change it. Really sad to watch. Because of this my wife and I talk almost daily about money to ensure bills are paid and that we are moving towards reaching our financial goals.

AC
AC
10 years ago

I have always been a strong believer in “you fool me once, shame on you; you fool me again, shame on me.” People get fooled early on in the game. It’s only when they stick with it do they really get hurt. Let go early and quick, especially if they could care less if you worked till the day you died paying their bills. I agree that this is a form of infidelity that easily turns spouses and partnerships into relationships of a spender and a cash machine. So would it really impact the spender if the cash machine told… Read more »

Cely
Cely
10 years ago

Nate, don’t mean to pry, but what happens when/if your parents have health issues and can’t afford extra help at home, or a retirement home or other community? Won’t this fall to you? If so, you might have a legitimate reason to get a little more involved with their finances. I am thinking about this a lot lately because my parents are divorced any my Mom has very little saved. My brother and I have decided to open up a joint account where we will be making small automatic payments each month. This will be there to help with Mom’s… Read more »

Nate
Nate
10 years ago

Cely, I have thought a lot about that over the last 2 years. My 3 sisters and I have been trying to talk to my father for several years now about his overspending – he won’t listen. Honestly we haven’t many plans. One plan we have made was to purchase long term care policies for both of them the second they turn 60 (the odds get nasty after than point). Other than that – we will provide shelter and food if they need it (we have rental properties) – but we are not going to bankrupt our families finances with… Read more »

LisaD
LisaD
10 years ago

I have experienced this. However, my husband could not hide the bills since I was in charge of paying. He WOULD hide the purchases though, and I never knew how bad it would be until the bill came each month. And it was always bad. Now we are going to divorce and he has taken yet another CC in his name only and has the bill sent to his office. I see that he pays each month online from out joint checking, a round dollar amount which I assume is “minimum payment” (because that is his way) but I don’t… Read more »

soultravelers3
soultravelers3
10 years ago

“The moral is, you can’t afford to become a passenger in your own finances.” So true! I’ve seen this devastation first hand with a loved one who was over 70 at the time. His wife passed away suddenly and only then did he learn how much hidden debt she had. He has always been hard working and frugal but she was addicted to giving way beyond her means ( despite working hard all her life even into her 70’s). He lost his wife, his home, most of his savings. She was hit by a car, so at least he got… Read more »

Ana
Ana
10 years ago

My mother drummed this into me from an early age. She called it “sexually transmitted debt” and it was the main safe sex talk we got at home 🙂 Dad ran his own business as a computer programmer, he loved the actual work but sucked at the book keeping, billing etc aspects so we lurched between dire poverty and momentary riches whenever he got paid. We could go from being unable to scrape a spare dollar together for school supplies one day and receiving a cheque for $150K the next (all of which was always spoken for so it was… Read more »

Devin
Devin
10 years ago

Hi all,

Really interesting thread.

My parents split amicably with my mom saving and my father spending. He died broke. My mom will have a comfortable road ahead.

Both of them gave me the same advice: always have separate accounts. Of course, this is much easier to do when without kids. As they would say, the relationship should not be based on the wealth of the other. So far, I have not had to worry about this… yet.

Saya
Saya
10 years ago

is there anyway to prevent a spouse running up credit cards you would be responsible for? I have to admit in this day and age, my biggest fear of marriage is that they will not end up to be the person I thought they would be and I will end up with financial troubles as well as marital… (No I’m not in a relationship now so its not a matter of not trusting a particular guy, just hearing too many horror stories) Get credit reports and go over them with each other before getting married, I get that, but is… Read more »

Luke
Luke
10 years ago

5-6 years ago I ended a relationship with my girlfriend of 5 years as we were both stuck in dead-end jobs and while I was willing to complete some postgraduate study to improve our odds, she was happy with her lot (working in a shop). This would have been fine but for the fact that she earned close to minimum wage, lived beyond her means and *frequently* lied about the status of her debts. It was the difference in life goals that led to the split, but the fact that we’d had 3-4 years of arguments, lies and constant worries… Read more »

AC
AC
10 years ago

It’s not the relationship you want to protect yourself from, but the creditors. each state is different on what property they view as exempt from creditors when you put assets into a trust. That is why I recommended looking into trusts. A much more extreme, but potentially option is to transfer ownership to another family member to protect assets if you and your partner should have to file bankruptcy. I think retirement plans and whole life policies are pretty much untouchable anywhere you go. Whatever you do, don’t pay a penny if it’s in the thousands of dollars. You’d pay… Read more »

Deb
Deb
10 years ago

I am convinced that THE single most important financial decision anyone will make is who they decide to marry. A bad choice can damage you for years to come in every way imaginable. My ex husband was a financial infidele, with hidden credit card debt and years of failing to pay or even file taxes. He kept this hidden from me (I signed prepared tax returns, he secretly did not submit them), until one day I came home early from work and in the mail I found a notice of lein on our home from the IRS. I discovered that… Read more »

honeybee
honeybee
10 years ago

I agree with Saya — it seems completely unfair that people should have zero way of stopping this from happening, but 100% of the responsibility. Anyone know about this?

Also, #7 Cely, how responsible of you! What a thoughtful thing to do for your mum. It is too bad you have to be the parent in this situation.

Maharani
Maharani
10 years ago

I am 55 and have been single all my life by choice. This is rare for an Indian woman (rule #1: All Indians are married….). Lately Ive been thinking a relationship might be nice, but, after having struggled all my life with money and finally having established my finances on a decent foundation (GRS helps a lot!), I honestly dont think I ever could or will be married, finances being one issue I simply cannot now either share or consign to another. I agree with the posters who say that it is crucial to pick the right person…..but being old… Read more »

Kevin
Kevin
10 years ago

I disagree with Saya and Honeybee. I think it’s a GOOD thing that marriage binds two people together financially. It’s part of what makes it such a solemn and serious commitment. I think people have gotten the idea that marriage is just a fun little adventure you jump on with whomever happens to be near you, and when it stops being fun, you just sign a couple forms and walk away, free and clear. I’m GLAD that marriage has consequences, and I’m GLAD that people are starting to realize that maybe they should take such a commitment a little more… Read more »

Shane
Shane
10 years ago

How about another post on parents’ poor financial habits and how they rain down on the responsible child. And nine times out of ten, the one responsible child in the family is the one who the parents neglected to help ensure their future. I think it’s ridiculous. Some parents can be so selfish and not have any concern for their child’s future. I know this sounds bad, but all I can say is, parents better cover their own asses because I will have my own children to worry about their future. My parents would be so hesitant to invest a… Read more »

JohnQ
JohnQ
10 years ago

How about the opposite? Keeping savings secret from your partner. My wife and I have different philosophies when it comes to money. I’m frugal, watch how I spend, and save aggressively (more than 60% of my salary) while still doing the things we like and having multiple vacations per year, etc, etc. My wife feels that if you work hard and make good money, you should spend accordingly and not worry so much about saving. I have accumulated a nice chunk (around 500K) but do not mention it. Wife thinks we have 100K in the bank. I’m saving the money… Read more »

karen
karen
6 years ago
Reply to  JohnQ

I think what you are doing is great…I have been in so much trouble financially from the day I got married…my husband spent all his money for 20 years and then went bankrupt…since then I have cleaned up the mess and taken over the finances…I am a saver like you although I don’t have as much as you saved…but it is because of me that we didnt loose everything…I worked like crazy to pay things off…but this has taken a toll on my feelings for him…too much crisis and not enough peace in my life with him. I dont have… Read more »

Rosa
Rosa
10 years ago

@Saya #12 – there is one way. Don’t get legally married. Get married in your church & do the paperwork you want (will, ownership agreements, etc.) and don’t go for the state-sanctioned agreement. Of course, there are difficulties with that too. The funny thing is, a lot of people think like Kevin – there ought to be no legal protections between married people. But what happens is that people who really believe in marriage and want to do it all-out forever get victimized. Sometimes, the debt-hider isn’t even trying to do anything bad – they just can’t control themselves or… Read more »

elena
elena
10 years ago

I’m guilty of carrying debt that my husband doesn’t know about from time to time($100-$5000). I plan the budget, pay his card in full, but pay only a set amount each month on mine because it makes the budgeting/balancing easier. (fewer variables.) I don’t want to compromise our other goals of saving, so I live with it for now.

OnTheMend
OnTheMend
10 years ago

In our family, I was the one who did it. None of the purchases were hidden – it’s hard to hide a 2-week family trip, or a new car – but the source of the funds were. I was using our home equity to pay for dinners out, travel, home remodeling (with outrageous cost overruns), even vehicles, and not telling my wife that my salary wasn’t covering it. I insisted on handling our money, so I controlled the transparency of the records. Even now there are several tens of thousands of dollars which I can’t determine for what they were… Read more »

Jane
Jane
10 years ago

“Sorry but I think sharing finances is really dumb, even in a marriage.” Whether you share finances or not, as many have discussed above, legally you are usually responsible for your spouse’s debt even if you had no part in incurring it. In that sense, it makes more sense to share finances and have everything be transparent. That way it is harder for one spouse to hide spending or credit problems. I think you could still have separate accounts if you like, but I would prefer to have access to those accounts – at least so I could view the… Read more »

Rosa
Rosa
10 years ago

Jane, the problem is that you can think you have complete transparency, but your spouse can have a whole other account that you would never know about, unless you check their credit report regularly. Which seems like a lack of trust issue – except that I’ve known several couples who shared everything…except the accounts he gave his work address to, so she wouldn’t know about them. There are people who hide assets because they’re preparing to abandon their families, and people who hide debts because they can’t control their impulses. I had a boyfriend who I supported while he worked… Read more »

anonymous
anonymous
10 years ago

@JohnQ My husband and I have separate accounts, and right now we don’t have savings because we are aggressively paying down debt, but he used to ask me to hide savings from him. When I have money in savings, I tend to spend LESS (for whatever reason), but he tends to spend MORE. So I tend to keep my savings amounts to myself. @Kevin et al The problem is that it can be very hard to admit to a frivolous purchase, even to someone you love and trust. A few years ago it got out of hand, and I ran… Read more »

JohnQ
JohnQ
10 years ago

Thanks Jane. I forgot to mention I also got life insurance of 1MM (in addition to the 250K provided by my employer) and didn’t tell wife either (she’s 75% beneficiary, and my parents the other 25%). My father and someone else close to me know about this and my hidden stash, and it’s all clearly delimited in my will. I got the idea of being quiet about this 10 years ago when I saw the movie Sabrina and their driver was worth 2 million dollars and kept it a secret from everyone. I said I want to be that guy.… Read more »

Jane
Jane
10 years ago

Oh, Rosa, I completely agree. If someone wants to hide something from you, they will find a way. I’m just saying that it makes it harder if you have a relationship in which it is okay to open each others’ mail and in which you have joint accounts.

OnTheMend
OnTheMend
10 years ago

@JohnQ: My 2 cents, take or leave.

I think choosing not to communicate with your spouse is setting yourself up for some serious relationship difficulties down the road. Open communication is the only way a marriage survives. In essence, you are telling us that you don’t trust her, when you really should be telling her that and working it out.

Best of luck

partgypsy
partgypsy
10 years ago

This post makes me feel very thankful for my spouse. We may have quibbles but I feel like we are on the same page. My parents did not fare so well. My mother is conservative with money, but my father, whenever they saved any money in the bank, would play russian roulette on another business venture (without consulting her). Of all the money he made, he never saved any for retirement. They are divorced now, but neither has any money for retirement, my father from failed business ventures and my mother from being a homemaker most of her life with… Read more »

Dan
Dan
10 years ago

I run the finances in our household. I work while my wife is finishing school. One thing that was hard at first is that despite making a decent income, between the cost of living and my student loan payments, there’s a lot of money that goes out the door, and used to make my wife ask me, “if you make so much, why do you keep telling me we’re broke?” Fair enough. So… one thing we started doing this month that I so far like a lot is using mint.com. I like the fact that it automatically updates when you… Read more »

chacha1
chacha1
10 years ago

Re: protecting yourself: I believe if you write and request each credit bureau to freeze your accounts, nobody, not even your spouse, can use your name to open a new credit line. And married people, you have your spouse’s SSN, right? So pull the free credit report once a year at the same time you do yours. If they are the type who would consider that a betrayal of trust, you especially need to do this! You can order copies of past tax returns as well, just to verify what (if anything) was paid. It’s not free, but only about… Read more »

Rosa
Rosa
10 years ago

@Jane – that makes total sense. I was responding as much to the “if you don’t share a checking account you’re not really married!” crowd as to anything else.

Ana
Ana
10 years ago

I have accumulated a nice chunk (around 500K) but do not mention it. Wife thinks we have 100K in the bank. I’m saving the money so we can retire early and to give our children a good education and a decent life.

JohnQ, I actually think that’s really cool. It sounds like you both still enjoy the things money buys (regular trips etc) and I’m assuming your wife doesn’t feel that life would be better if only you could afford X. From her perspective, when you tell her it’ll be like you’ve won the lotto.

Nina
Nina
10 years ago

I see it just like Maharani. I know a guy spending all the money on his Wii, flatscreen TV and other electronic toys, telling his girlfriend that he won one of the above on ebay for 50 instead of buying new what he really did. He keeps things secret from her and has to borrow money from her for decent clothing to go to a job interview. He had fixed-term contracts the last couple of jobs, totaled his car and blames the evil world for his misery. I know another 40something who had to borrow 250 from his dad to… Read more »

Saya
Saya
10 years ago

Just for the record – to Kevin – I agree that you have to deal with the consequences of marriage… (Its pretty hard to find anyone who takes marriage more seriously than I do really) – I have just seen too many people who thought they really knew the person – went through all the premarital counseling and all – and didn’t when it came down to some of these things like finances. Scares the daylights out of me. Re: getting married in the church and instead of a legal/civil marriage: Truthfully I do not understand why the two have… Read more »

sandra
sandra
10 years ago

This is one of the best discussions I have read on PF in a long time. Thank you everyone for sharing. We struggle with this in our marriage. I am the saver, my husband the spender. He constantly buys things, doesn’t tell me, and lets me find out only because I monitor the checking account closely – which I do because he constantly uses the debit card. I don’t want to stop for gas and discover I have overdrawn our account – which one day has $300 and the next none because he went shopping. I have tried everything I… Read more »

Tara
Tara
7 years ago
Reply to  sandra

Hi, I’m having similar issues. My husband had to go away for work, and were were all going to go as a family, until he said we can’t afford it. As much as I wanted to go, I knid of respected him for the decision, because we are not good with saving, and we need to start. I look after all of our finances, pay all the bills (he works, but we have a joint account), and sort out how we are going to pay for everything. I saved and gave him oney to go away with, and while he… Read more »

so confused
so confused
9 years ago

i am so confused on how to fix our problems… we have run up a chunk of debt. i have lost whatever little inheritance i have and we are living in my in-laws’ place which makes it even more hellish for me… my husband seems to have a debt addiction… i was a co-dependent and did nothing for the first few years.. but it has snowballed into something unmanageable now back then he was making most of the money while i made supplemental funds here and there while taking care of the kids…so he run the show and never consulted… Read more »

db
db
9 years ago

Especially important:Make doubly sure you are aware of all mail that comes into your home. Case in point:a few years ago (prior to the real estate crash) the company I was with followed up on mortgage refinance inquiries. I called a potential client and she whispered to me that her husband did not know anything about her plans to refinance over $80K in credit card debt in addition to the $365K on their properties. Because the loan application process would be done by mail she would be forging her husband’s signature on the paperwork. I advised the senior loan officer… Read more »

Rachel
Rachel
8 years ago

I didn’t discover my husband’s lack of financial responsibility until after we married. After all these years, I still really feel stupid about it. He has been self-employed for the past seven years since, still getting help from his parents through the gaps. We are constantly repaying them and have nothing to show for ourselves. There have been also garnishments over the years. For a while I manned the books, but when he continued to neglect telling me about money spent, I couldn’t continue effectively and left it alone. Now he “does” it. I work part-time now, but that money… Read more »

Terri
Terri
5 years ago

I am deeply in payday loan/online installment loan debt that my husband does not know about. I am in crisis and do not know how to proceed. i cannot pay these debts and have closed my bank account ( i live in CA) and will probably lose everything once I am sued by these loan sharks. My question, I have a joint bank account with my husband but have not signed his name to any of these high interest loans. Is he responsible if I cannot pay? I am so sick over this. I need to divorce my husband and… Read more »

Sweetie
Sweetie
5 years ago

Three years ago I met with a bank official after it was suggested that there was document which my signature had been notarized on without me being present to sign. The bank official pulled documents from the vault and showed me only one which was the 1st mortgage on our home which I knew about and had signed. I also asked if my husbands business property were to go into default would our home be in any jeopardy and was there any connection between the two properties I.e. loans in common? The answer from the bank officer was “No, your… Read more »

jenn
jenn
5 years ago

I was the one hiding debt, but I wasn’t gambling or doing drugs or shopping. My husband pays high alimony and child support and we got behind when I lost my job due to an extreme illness. I didn’t do it to hurt anyone and I honestly thought I was protecting my spouse. I thought that I could catch us up but we just weren’t bringing in enough money. I did wrong by not asking for help and I know that. My question is how do I fix this? My husband kicked me out and wants a divorce. I have… Read more »

luclle
luclle
5 years ago

Looking in to bankruptcy but hoe do i separate my bills from his affecting me we also have a house were paying on

Gerry
Gerry
4 years ago

If your spouse is hiding debt, that means lying. Lying in small, means lying in big.
If there is no trust, what do you have? There always result in divorce.
You can’t fix trust, because people that lie, I’ve in lie. It’s all they know.

Sherrii
Sherrii
4 years ago

I hear what everyone is saying. I’ve been married for 33 years. From the moment we got married I handed my husband all the money I made. He would give me 40 a week. Then when the kids were born he gave 120.. That was 33 and 28 years ago. I never bought anything with out his approval. He got very controlling as the years when by. To the point that after we moved when the kids were 12 . I got an offer for one credit card. So I got it, for emergencies. But slowly, as he got tighter… Read more »

Tommy
Tommy
4 years ago

I just found out that my wife and I (married for 26 years with 2 children) are $41,000 dollars in debt and most of it is credit card debt. On her own, and without me knowing anything about it, she researched consumer/debt counseling and found a non-profit consumer credit and debt counseling service. They worked up a contract with her (that can be broken with no penalty to us) and we will go into the program of debt consolidation that they will manage. We will now be paying $850/mo. for the next 4.5 years and we will then be out… Read more »

Scott
Scott
3 years ago
Reply to  Tommy

Hi Tom, I feel you pain!!! The exact same thing happened to me 18 months ago and just again last week. I was not told the truth the first time but forgave her and worked out a monthly payment plan to pay back the credit card company. In hindsight, I should have gone online and seen what my credit score was and how many credit cards were owed money. I learned a valuable lesson in that her running up credit cards without you knowing about them also, effects your credit score. That is actually how I found out about the… Read more »

The Joe Economy
The Joe Economy
4 years ago

Financial infidelity is something that gets swept under the carpet more often than not! We hear in cases of celebrity break ups how one party to the relationship might declare bankruptcy before an impending divorce settlement. This also happens in normal relationships and can have devastating consequences.

Innocentpartypays2
Innocentpartypays2
3 years ago

My situation was similar but much more extreme. The loan officer at a bank notarized my forged signature to loan in 2009 using our home as collateral. I wasn’t there (notary watched my signature being forged) and I knew nothing about this loan’s existence until 2014 when it was in default. The bank convinced my spouse to take a debt consolidation loan to help manage his business expenses into one payment. His business was struggling, without the loan if his business failed he would have to sell his business property to pay off his debt. With this loan, he lost… Read more »

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