As family lawyers, we spend a lot of time thinking about STIs (that is ‘sexually transmitted investments’).
However, you may have heard of a new term doing the rounds lately – ‘Sexually Transmitted Debt (STD)’. Scarily, STDs are a real thing and they’re as bad as they sound. Worse still, there’s no easy way to get tested, no obvious symptoms and you usually don’t know you have one until it’s too late.
In this post, we’ll cover what an STD is, how they occur and what you can do to protect yourself from contracting one.
What is a Sexually Transmitted Debt?
STDs occur when one partner takes responsibility (wholly or partly) for the debts of their partner, either unknowingly or unwillingly. A common example is one partner incurring large debts on a credit card in both of the partners’ names. In those circumstances, although only one partner spent the money, both partners are usually equally liable to repay the debt (plus any interest accrued in the meantime).
STDs can have major consequences for the non-spending party, who may end up being on the hook for major debts they didn’t even know existed. Usually, there’s no simple way to get out of repaying such a debt incurred in both partners’ names.
This can have the real effect of diminishing the non-spending parties’ financial autonomy, which in turn may be considered a form of ‘Family Violence’ under the Family Law Act 1975 and the Family Violence Act 2016.
How to Protect Yourself
Now that we’ve covered what STDs are and how they occur, here a few top tips to help you steer clear of them:
- Avoid joint credit cards. If you really need to get one, make sure it has a reasonably low credit limit which can’t be raised without your approval.
- If your partner can’t get a loan themselves, there’s usually a good reason why. Be very wary of taking one on for them. It could be that you end up stuck with the debt, even if the relationship ends.
- If you have a joint home loan account with an overdraft facility, make sure both you and your partner’s permission is required to drawdown any further money.
- Never sign anything on the spot. Always take time to think about it and get advice about the possible legal and financial consequences. If in doubt, get legal or financial advice!
- Sometimes joint bank accounts are necessary (for example, to pay rent, mortgages, bills and other expenses). But it is always a good idea to have your own separate bank account where the majority of your money is kept.
- You may consider putting a Binding Financial Agreement (sometimes referred to as a “pre nup”) in place between you and your partner. This is a document that sets out financial expectations between your partner and you, including who is responsible for what assets and debts if the relationship breaks down.
How can we help?
If you are worried that you might end up being liable for your partner’s debts, either during or at the end of your relationship, we can help.
Get in touch with our Family Law Team on 02 6285 8000 or by email.