Gambling Debt and Divorce

The end of a marriage is often one of the most difficult financial times for both parties.  In most cases, spouses have worked together to build financial security, plan for retirement, buy real estate, and other important steps to create a secure future.  During a divorce, the spouses will have to figure out how to divide the expenses, property, and debts, as well as how to establish a new budget with only one income.  If the parties are unable to come to an agreement, the court will make an equitable division of the martial property and the marital debt.  In general, any debt that is acquired during the marriage is a marital debt, and the court will look to a particular set of factors in the Minnesota statute to decide how to apportion the debt.  When one party has accrued substantial gambling debt, the process of dividing the debt can become more complex.

The issue of how the gambling debt will be divided will depend largely on whether the non-gambling spouse knew of the debt.  In cases of gambling addiction, it is not unusual for the addict to go to extreme lengths to hide the existence of the debt from the other spouse.  In the case where the non-gambling spouse was completely ignorant of the debt and his or her name is not associated with the debt, it is common for the court to order that the addict be solely responsible for repaying the gambling debt.

The inquiry may yield different results if the non-gambling spouse was, in fact, aware of the addict’s behavior and that he or she was accruing large amounts of debt to support the addiction.  In such a case, the court is more likely to treat the debt as a marital debt and divide it equally, as the non-gambling spouse knew of the behavior and did not take steps to divorce.  Non-gambling spouses must also be aware that if their name is associated with the debt, a divorce court cannot force the creditor to remove his or her name from the debt.  For example, if the gambling debt is put on a credit card that is held in both parties’ names, the divorce judge cannot force the credit card company to take the non-gambling spouses’ name off the debt.  All the divorce judge can do is order the gambling spouse to pay the card off.  If the gambling spouse fails to live up to that obligation, the non-gambling spouse’s only recourse is to return to the divorce court to try to enforce the divorce decree.

Call us today at (651) 371-9117 and let us help you.  We can help you understand how the division of property may occur in your divorce.

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