Without Trust You’ve Got Nothing

Mary Hunt advises that couples need to be honest with each other about past financial troubles and offers other tips to readers. (Andrey_Popov/Shutterstock)

Of all the things I’ve ever dreamed of being, advice columnist was never on the list. But here I am playing one every day. That’s because while my inbox loads up with tips, hints, and questions related to frugal living and getting out of debt, many questions spill over into other areas—family, life, and love.

Dear Cheapskate: I have been dating a woman for about two years. Getting to know her, I have learned that she has significant financial problems that she has not told me about. I have found out by doing a little research on my own (public records, etc.).

This is a serious relationship. We are both divorced with children. Money issues were one of the things that led to the breakup of my first marriage and hers, also.

I am recovering from my past mistakes and well on my way to living debt-free. What is the best way to approach this with her?—Concerned Dad

Dear Concerned: First, let me say that the single most important factor in marriage is authentic, complete, mutual trust. Regardless of everything else you love about this woman and her kids, without trust, you have nothing. It’s all emotion.

If she will mislead and lie to you about this most important issue, can you trust her in any other area?

I am not saying that she hasn’t confronted her past financial problems and made a successful change. However, in that you put this in the present tense (“she has significant financial problems”) I assume that hasn’t happened.

I can tell you from my own experience that your beloved is afraid that if you find out who she really is—warts and all—that you will reject her. She’s trying to present the best package possible to ensure a future with you.

Can broken trust be restored? Yes, absolutely it can, but it is a process that takes time and two individuals, not only one, who are totally committed to fidelity and the restoration of that broken trust.

If you have never had a completely honest relationship with this woman, you may have little, if anything, to restore. You are trying to build your future on the equivalent of quicksand.

I suggest that you trade credit reports before you invest any more time into the relationship. A credit report can be an amazingly accurate character report. Granted, credit reports can contain errors, and she may be able to explain an item or two. But outstanding balances, judgments, liens, collections, and patterns of behavior cannot be hidden or explained away.

If she agrees and then comes clean with her situation and problems with money, I recommend that you invest in couples counseling.

If she refuses to show you her credit report, you should see that as more than a caution flag. That’s when I would tell you to grab the kids and run, not walk, away from this relationship.

Dear Cheapskate: A year ago, I made a loan to a friend who quickly became unfriendly, acted rudely when we would meet, and then became hostile when the money issue was mentioned.

Within a few weeks after making the loan, contact between us ceased. We had no formal agreement, and the certified bank check that I gave to this person didn’t even have a memo note that it was a loan.

I did make the loan from my Merrill Lynch business cash management account. What are my options? How can I get my money back? Thanks for your help. Your books and columns have been extremely helpful to me.—Sad in St. Louis

Dear Sad: I’m not going to beat you up by pointing out that unless you can see it as a gift, never lend money to a friend or family member. And I won’t give you a hard time about not reducing this matter to a written agreement. I’m sure you’ve already punished yourself more than adequately.

Based on an episode of the TV show “Judge Judy,” I think you should file in small claims court to recover this loan. You have no contract and no proof at all that this was a loan and not a gift. In fact, you have very little except your memory and a copy of a cancelled certified check. (You can get that from the bank for a small fee.)

But neither did the plaintiff on the show. And she prevailed simply because the judge believed her. So I say go for it.

It costs very little ($20.50) to sue in your local small claims court. Of course you‘ll need to visit your local courthouse to find out the limitations and procedures. At that point, it becomes your word against that former friend’s. If you win either by decree or default, then you’ll have to learn how to collect on judgments. I doubt this creep has the cash.

You may be able to deduct this as a loss when you file your income taxes (consult your tax professional). In any case, never underestimate the value of having learned a very difficult life lesson.