It turns out that Carrie never sent Mrs. Vance her new address (remember that Mrs. V was on vacation when Carrie moved) because she was ashamed about having to move to a smaller place. Mrs. V just figured she moved out of town, so she's pretty surprised when she runs into Carrie out shopping.
Carrie plays it off like she'd been planning to get in touch, and tells Mrs. Vance to come see her and gives her the new address. Mrs. Vance takes one glance at it and knows immediately that she and Hurstwood must be having financial troubles.
At home, Carrie finds an unshaven Hurstwood in his usual spot. That night at dinner she tells him about meeting Mrs. Vance. They bicker about—what else?—money. Hurstwood has started playing poker downtown. At first he won a little, but then his luck ran out and he lost big time.
A few days later, Hurstwood is hanging around in his old dingy clothes while Carrie is out. Knock, knock—it's Mrs. Vance dropping by to see Carrie. She's astonished to find Hurstwood in such bad shape. He invites her in, but she declines in a hurry, given that he looks like something that crawled out of the swamp.
When Carrie gets home and finds out Mrs. Vance stopped by, she's totally appalled that she saw Hurstwood looking so bad. They begin fighting and Carrie tells him he needs to find a job. Why did he even marry her, she wants to know, if he didn't expect to take care of her?
And then he drops a major bomb: "I didn't marry you," he tells her.
Apparently their marriage wasn't legal after all, but there's not much further explanation. Carrie is furious and bursts into tears; Hurstwood gets dressed and leaves. He goes to a fancy hotel and blows money on an expensive dinner, and then he decides to give poker another try. Bad idea—he loses. A lot.
He goes back to the apartment. Throughout the next few days, Hurstwood "lived like a gentleman," meaning he wasted money on a bunch of stuff he couldn't afford.
When Carrie tells him that the rent's due, he realizes he's down to his last hundred bucks.