What an awful, sad situation. I agree with the PPs, your friend does need to tell her cousin what happened, and in fact it's more urgent given the financial problems. It's possible that CH is planning to run off and leave her with all the debts.
It won't be a comfortable conversation at all. I feel very sorry for your friend as well, having to give such dreadful news. However, Cousin might already know, or at least suspect, what is going on.