DamageThe ugly truth was out in the open. My wife had committed financial infidelity, and it was time to assess the damage.

“How much do you owe?” I demanded.

My wife cried. Between sobs, she managed to choke out an approximate amount, which we later confirmed online. It was a hefty sum, but I actually felt very lucky. The amount wasn’t nearly as much as she had secretly charged in a similar incident years before, and we are in a relatively good financial position at the moment. For the past couple of years our business has being doing well, so my wife’s indiscretion was not going to put us in any serious financial jeopardy.

I still felt angry and betrayed, but it was a relief knowing that we wouldn’t end up in the poorhouse as a result.

With the decision to work things out having already been made, assessing the damage was an important next step. We spent the afternoon at the computer, checking our accounts. We reviewed bank accounts, credit cards, our home mortgage and other credit accounts to make sure that there weren’t any other surprises. We each got our annual free credit report from all three credit bureaus.

Although I thought I had a pretty good handle on our money situation because I religiously use personal finance software, the credit reports were a very helpful confirmation that things were as they should be. The reports confirmed all our open accounts, and the approximate amounts owed. Surprisingly, though, the one bill my wife had been hiding didn’t appear as an open account. Although she admitted she’d incurred the debt in early February, five months before our wedding, it didn’t show on her report. The only hint was that the company in question had made a single credit inquiry.

For me, the most frustrating part of the debt was learning just how much money had been wasted. Although my wife had been secretly making payments for seven months, nearly all that money had gone to interest charges. She’d financed some camera gear with a 90-day, same-as-cash finance company, and the interest rates were sky-high. When we tallied up all the charges, she’d added nearly 20% to the original purchase price of the equipment. She’d managed to sneak the gear into the house claiming she’d bought it secondhand on an auction site for 10% of the price she actually paid.

Note to self: next time the wife brings home toys, I should ask to see the receipt.

If you and your partner are in crisis, the most important tool for recovery for both sides is to be as open and honest as you can. Once you have assessed the damage by completely reviewing your individual and joint accounts, you can start to move forward. Whether or not you intend to stay together, you will still have to deal with the consequences of the secret spending or debt.

For the financially unfaithful partner, honesty and openness means coming clean about the extent of the damage. For the betrayed, it means listening, and doing your best to receive the news as calmly, and without blame as possible. That’s not always easy, but being judgmental and confrontational won’t help the problem. The damage has already been done.

If you have been in this situation, how did you discover the secret debt or spending? What did you do to identify the extent of the damage?

Next in the series: Cleaning Up the Mess

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