For those who have recently exited or been ejected from a relationship (the term depends entirely on which party you are having the discussion with), there is often increased activity with multiple partners, which brings increased risks in many aspects.
Absolute protection from risk may be achieved rather drearily by complete abstinence. It is often said you will live longer this way…I suspect it will just seem a lot longer. Before you jump to the wrong conclusion, let me make it quite clear I am talking about Sexually Transmitted Debt. In this article, I want to look at how it occurs, and how you might best protect yourself from it.
STD’s occur as a result of joint activity -that is in the financial arena-. It may arise, for example, from a joint-borrowings and more insidiously, from simply signing a personal guarantee.
There is a favourite legal maxim: “A guarantor is a fool with a pen”. This should become your mantra, and chanted over and over again, in lieu of the more usually accepted – Om! This earnest recitation may have the additional benefit of transporting you more quickly into the nirvana of being debt free, rather than simply, a state of mind. Then again, I understand that one of the principle tenets of Buddhism is suffering!
Let me firstly make a few comments about the principle of joint- borrowings. If you agree to borrow say $300,000 by way of a mortgage with one or more other people, that is jointly, or to take some other form of credit in more than one name, then almost certainly your liability will be considered to be both joint and several. That is, each person will actually be liable for the whole amount. In real life terms, if your partner skips town, goes bankrupt, or is unable to pay for a whole host of reasons, you are immediately liable for the whole debt….not just your half.
If you find that this situation is not of immediate appeal, you can of course either find a suitable new partner, which is often not as easy as it sounds. It must be that white horses are in short supply! Alternatively, adopt a new strategy to borrowings. I might add one which is unlikely to find immediate appeal to the banking institutions, who as you may have noticed, are in present times, not exactly struggling with their profits. The solution and best path to protection, is to leave out the joint bit. That is, each of you borrow in your own name i.e., severally but not jointly. This is not always easy to achieve, and is an area where I strongly recommend you ought to seek expert advice, which for obvious reasons, should probably not be from your friendly banker.