Indy Mom’s Financial Wake-Up Call: 1 Step to Protect Her Future

A Woman’s Distress Over Her Husband’s Financial Mismanagement

An Indiana woman recently called into The Ramsey Show in severe distress. She had just discovered that her husband had lost hundreds of thousands of dollars through risky investments. Kate, from Indianapolis, shared that her husband of four years revealed a week earlier that he had taken out $350,000 in loans and lost it all through day trading. However, the previous night, she learned that this had been happening throughout their entire marriage.

Kate is a stay-at-home mom with a one-year-old and is expecting another baby in the summer. Her husband has been running his own business for two years, and she mentioned that because the business was doing well, he was able to secure the loans. According to Kate, her husband pays himself a salary of $60,000 a year from the business.

Co-hosts John Delony and Rachel Cruze were shocked by the numbers and offered condolences before getting down to business about the steps she needs to take to protect herself.

Understanding Financial Infidelity

Financial infidelity is the act of intentionally keeping secrets from your partner about money. It includes things such as hiding debt, making large, undisclosed purchases, or keeping accounts, credit cards, or investments secret. Signs of financial infidelity include unexplained charges on accounts and receiving calls from collections when you are up-to-date on your bills.

Financial infidelity can have a serious impact on a relationship, as it is a breach of trust. It can harm the financial wellness of both people in the couple. Rebuilding broken trust in a relationship after financial infidelity can be a long and difficult path. It requires honest conversations about exactly what occurred and committing to transparency moving forward. Relationship counseling may be necessary to address underlying mental health issues. However, not every relationship with this level of betrayal can be salvaged.

Protecting Yourself

Kate is in a very volatile situation. Her husband has broken her trust and subjected her to extreme financial harm. Realistically, in the near term, she likely can’t make her own money to help remedy their situation. Daycare for her one-year-old would severely eat into any income she could earn. And regardless of her field of work, it’s going to be very difficult to secure employment while pregnant.

Delony also warned Kate that in cases of financial infidelity, it’s rare for the whole story to come out at once, and that she should brace herself for more potentially horrifying revelations.

Both hosts said Kate needs to take immediate steps to get a full sense of the situation and prevent her husband from doing any more damage. She should ask him to hand over all his financial log-in information, freeze his credit (and hers), and pull credit reports on herself, her husband, and even their child.

Delony pointed out that people in desperate financial straits aren’t thinking clearly and often do things they would normally never do — like taking out debt on behalf of their child or spouse.

Cruze gave Kate one urgent action item: She should immediately open her own checking account and ask her husband to deposit 50% of each paycheck into it for the time being. That could help build a baseline of financial safety for herself and her children, so that she has at least some money she can access when needed and that he can’t touch.

Figuring Out Next Steps

Recovering from a major financial infidelity could include attending relationship counseling and making conversations about finances a regular priority. For the partner who has been deceived, becoming involved in the finances on an everyday basis can provide both peace of mind and protection against future indiscretions.

However, infidelity does cause the dissolution of some marriages, and if Kate chooses to go that route, she has a tough road ahead on her own with two small children. It’s going to be especially hard if her husband is eventually found guilty of financial crimes.

One thing Kate should know is that Indiana is a common-law state when it comes to marital property. That means her husband’s debt is not hers to pay. Debts are only shared in common between spouses if they are used to fund purchases that benefit both partners, like a shared home.

Divorce law in Indiana, like all states, starts from the presumption that an equal division of property is fair. But depending on the circumstances, a court may rule that a different division is appropriate, especially if one spouse mismanaged financial assets.

Kate knows she will be spending time in law offices over the next while, as her husband intends to file for bankruptcy. However, she could start thinking about seeking the services of a different type of lawyer — like a divorce lawyer who specializes in complicated financial circumstances. These are sometimes called property division lawyers. She is going to need help to navigate this mess.

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