relationship and debt problem

Being in a relationship with someone who has a debt problem

A Quora user asks:

Do you think it is wrong, a bad idea, or unrealistic for me to want to avoid getting serious with guys who have considerable debts from college?

I worked hard to get through college with no debts, and I’m worried about perhaps ruining my future if I end up getting married to a guy who has considerable debts which could make life tough. I want a relationship to lead to marriage, so realism is important. Thanks. What are your thoughts?

Victor Fong, Licensed Insolvency Trustee replies:

Hi – that’s a great question. I’m a bankruptcy trustee in Canada and I wrote an article about this on my blog [1] , which I will reproduce here:

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Throughout my career as a bankruptcy trustee, I have seen the following scenario play out time and time again:

  • Girl meets boy and falls in love. He’s not perfect – he could be irresponsible at times – but he makes her laugh and makes her feel good. Besides, she’s confident that she can make him change his ways.
  • Boy wants to buy a new home or car, but has pretty shoddy credit and/or low income. However, that doesn’t matter, his girl loves him so much that she’ll co-sign the loan for him.
  • Eventually, and for one reason or another, the boy stops making his loan payments and takes off. He doesn’t return his girlfriend’s calls and she gets stuck with all his debt. There’s no way she can pay this debt herself so she filed for personal bankruptcy.
  • The roles assigned to the “boy” and “girl” in this scenario are deliberate: from my experience, it is almost always the man who suddenly absconds and the woman who gets the short end. I know this may be politically incorrect, but it is factually accurate from my experience.

So ladies, how do you avoid this scenario (or avoid it the next time)? Consider taking these steps:

In the short term, keep your financial affairs separate from your boyfriend or spouse. Do not co-sign any loans, keep your bank accounts separate and keep your assets separate.

If you are serious about establishing a long-term relationship with your partner (like marriage for instance), ask if he is willing to consent to a background check. A comprehensive background check will screen the following:

  1. Address histories
  2. Civil and bankruptcy records
  3. Credit reports
  4. Criminal records
  5. Driving histories
  6. Education and employment histories
  7. Liens and judgment histories
  8. Media coverage

If he has nothing to hide and really loves you, he should have no problem in consenting to this. If he is hesitant and cannot give you a REALLY good explanation, then you should have second thoughts about entering into a long term relationship with him. I have personally used Kroll to perform background checks on prospective employees.

If you have significant assets and income (or expect it in the future), discuss with him the issue of entering into a pre-nuptial agreement.
Feelings of romantic love will inevitably subside and reality will set in. And if it turns out that your partner is a “real” deadbeat, you will at least have taken preventive measures to make sure that only your heart gets broken, and not your wallet.

Footnotes
[1] Love and money don’t mix – Fong Financial Literacy Canada