How to cope when spouse's secret debts come to light
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.
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Dear Opening Credits,
After a couple of years, I just checked my credit report and found out that my husband has been charging on our credit cards and even on cards I didn't know existed. We are $18,000 in debt when I thought we only had a balance of $400. How is this possible? I'm so upset I'm shaking. What can I do? -- Jennifer
I'm truly sorry. It sounds like you've been a victim of financial infidelity. Your husband may be a great guy in every other way, but he's cheated on you in the money department, and that's an extremely painful revelation.
As part of a married couple, it is your responsibility to treat the other person with respect. This means telling the truth, however hard it may be. So if your husband was having financial problems, he should have revealed them long before running up such a balance. And opening accounts in secret? The moment he considered applying for new lines of credit without your knowledge or consent should have been his cue to initiate a heart-to-heart with you about his money issues. But even after accumulating those bills, he still should have eventually come clean, instead of leaving you to discover his indiscretions the hard way.
These are just a few of the "should haves" in this situation, and though it's easy to dwell on them, it's not productive. So what do you do now? Well, you and your husband must first dissect the past, and then you can work toward building a better future. Here's my recommended plan:
- Access and review all credit card statements. Of course, you could just ask your husband what he spent all that money on, but as he hasn't been truthful in the past, there is no guarantee that he will be now. Therefore, either pull up the statements online or get on the phone with each credit card company and request they be sent or e-mailed to you. Then the two of you need to sit down and evaluate the statements carefully. What you discover may be hard to take, but it's vital that you get to the bottom of those charges. This is his chance to come clean by explaining what's been going on.
- Get professional help. If you're angry, it's justified. If he's uncomfortable or resistant, it's normal. To get to the root of the matter and stay on track, consider scheduling an appointment with a professional. Whether you see a marriage therapist (for all issues, though they can be expensive) or a credit counselor (for budgeting and debt resolution, but free), an objective third party can be extremely helpful.
- Concentrate on debt repayment. As a duo, you need to develop a plan to repay the balance in full, in as short a time as possible. Contact the credit card companies and explain that you want to pay them off ASAP. Develop a budget, reduce spending, apply all excess funds to the debt and suspend charging privileges until the balance is at zero. Also, I don't think it's out of line to have your husband relinquish and sell whatever stuff he bought on the cards and apply the proceeds to the balance. While you're at it, propose he work overtime or get a part-time job to expedite the process.
- Take the reins of money and credit management routine. You said you hadn't checked your credit reports in years, and that's way too long to wait. For most people, an annual checkup is suggested, but because you want to be sure he doesn't fall into the same pattern of charging on the sly or opening up accounts behind your back, stagger your reports. Get one in January, one in May, and one in September. This way, you can monitor what's going on throughout the year and still get your reports for free. Take on bill paying as well. While you may not be eager to add this task to your life, it's the best way to know how much, and in what ways, both of you are using the credit cards.
- Communicate regularly. Finally, begin to talk about money on a regular basis. What he does with his financial affairs affects you and vice-versa. Make time in your marriage for consistent and frank financial discussions.
Neither of you can afford to be passive about your credit, Jennifer. 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." Or as "Project Runway" star and American fashion guru Tim Gunn always says, "Make it work!"
See related: 10 things you must know about credit reports and scores, 8 legitimate ways to improve your credit score now, How to read, understand your credit report, Free credit reports: How to get the one that's actually free, 8 key steps to picking a credit counselor, Video: How to pick the right credit counselor, Let's talk credit: 8 must-have couple conversations, Tips for uncovering hidden credit card debt
Erica Sandberg is a nationally renowned personal finance authority. She’s host of several financial web shows, and a frequent guest for media outlets such as Fox, Forbes, Nightly Business Report and NPR. Erica previously was affiliated with Consumer Credit Counseling Service and was KRON-TV’s on-air credit expert. Her book, "Expecting Money: The Essential Financial Plan for New and Growing Families," was published in 2008 by Kaplan Press.
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Published: December 2, 2009