When Steve’s* marriage came to an end, his biggest surprise came when he discovered the large debt left from his wife’s prolific spending.
As the sole bread winner, Steve had paid little to no attention to where or how funds were spent. It was only after their split, her spending habits and debts surfaced. His wife had lied about the costs of her purchases, some of which included a car, travel and clothes.
Hidden debts and secret bank accounts can be unwanted surprises during a divorce.Credit: Karl Hilzinger
After separating, she secretly acquired a credit card in their joint names, running up an additional credit card debt of $25,000. As they were technically still married at the time, Steve was legally liable, and the burden of repayment fell entirely on him, as she had no earnings.
Steve quietly accepted the debt as his to pay. He struggled for the next two years to work to pay it off. They used the proceeds from the sale of their home to settle their personal debts.
For someone in their late fifties, Steve’s confidence took a blow, as he was faced with the reality of having to start from scratch to his build his finances. However, his story is not an uncommon one.
Is financial infidelity a crime?
Head of Family Law at Australian Family Lawyers, Bill Kordos said, in Australia, financial infidelity itself isn’t a crime, but it can have legal ramifications, particularly in divorce cases.
“While The Family Law Act 1975, also doesn’t explicitly name financial infidelity in its terms, case law does show that non-disclosure, hiding assets or trying to keep money secret plays a significant role in how the property pool is ultimately calculated and divided,” he says.
“Importantly, a party can argue that some, or all of the debt can be apportioned by the court regardless of the legal entity.”
