Am I Responsible for My Spouse’s Gambling Debt?

Gambling losses can have a devastating and lasting effect on your life and the lives of those around you. In some cases, a person’s gambling debt might even be cause enough for a divorce. In any case, if you are getting a divorce and your spouse has acquired debt through gambling, you might be wondering what will happen to that debt once you split. Will your spouse be responsible for all of it, or will you be asked to pay a portion?

During a divorce, all shared property is divided between the two spouses, and this includes most debts as well as assets. However, if certain debts or financial losses were the sole responsibility of one spouse, as with gambling, the court may handle property division a bit differently.

If you are getting a divorce and are worried that your spouse’s gambling debts could affect you, make sure you understand how these types of debts are handled in Washington state family law courts.

Property Division Laws

Before you can determine what will happen to your gambling debt, you need to understand how the state of Washington handles property division. Washington is a community property state, which means all property owned by the couple during the marriage must be categorized as either “community” or “separate” property.

Community Property: Any possessions, funds, or debts couples share are considered community property. Most of a couple’s belongings will fall under this category, usually including things like their family home, their vehicles, savings funds, investments, and other miscellaneous possessions.

Separate Property: Anything owned by one individual spouse, especially things acquired prior to the marriage, are considered separate property. Examples of separate property include heirlooms, gifts, and usually student debt.

In court, all separate property will remain under the ownership of that person, but all community property will be subject to division. In community property states, this division is supposed to be equitable. An equitable division means that the property must be divided in a way that is fair and just, though not necessarily equal. Depending on the situation and the circumstances of each spouse, this division could be 50/50, 60/40, or any other ratio, and still be considered equitable by the court.

Penalties for Lavish Spending

In community property states, like Washington, spouses can be penalized for wasting marital assets. When someone disposes of money, spends it, or gives it away without the consent or knowledge of the other spouse, this is considered a form of wasting marital assets. Gambling is a perfect example of this type of wasteful spending.

Sometimes one spouse may also try to hide assets during the divorce to keep from losing them, or they may try to spend an unreasonable amount to prevent the other spouse from getting it, as a form of revenge. Or, the spouse may have a legitimate addiction (to drugs, gambling, alcohol, and the like), and may have spent the money without malicious intentions. Regardless, the end result is the same—if a spouse wastes marital assets, they could face serious consequences when it comes to an equitable division of property.

How Does Gambling Factor In?

Although someone who wastes marital assets will not suffer direct penalties for their wrongdoing, the judge may offer a reprimand for that spouse’s actions by granting them fewer assets after the divorce.

When you go to court to handle your property division, the judge will hear any complaints about wasting marital assets and divide the property accordingly. Therefore, if your spouse had a serious gambling problem and they spent a drastic amount of your shared funds to fuel that addiction, you could be awarded more during the division to compensate for the loss.

If the money was spent without your consent

If your spouse wasted money on gambling, you may be awarded more to offset that loss. For example, if a couple had $100,000 in marital assets, but one spouse squandered $10,000 of their savings gambling, the court could decide to even the score, so to speak. In this scenario, the court might award the non-gambling spouse $55,000 of the remaining $90,000 in assets, leaving the gambling spouse with only $35,000.

If current debts exist due to gambling

Typically, debts are divided in the same way as assets – community debts are distributed equitably between the spouses, who will each bear responsibility to pay off their assigned share of the debt. However, if your spouse accrued major debt during your marriage as a result of gambling, you may be able to exempt those debts from the property division process. For example, if a couple owes $20,000 on their joint credit card and half of that debt can be attributed to one spouse’s gambling activity, the other spouse may be exempt from $10,000 of the credit card debt and only held responsible for $5,000.

When dealing with gambling debt or spending, the way in which the court handles it can vary depending on the judge. Not every divorce ends up in court, however. You and your attorney may be able to negotiate a fair settlement with your spouse that accounts for their gambling. If you are concerned about how your spouse’s debts could affect you, consider seeking the legal counsel of a knowledgeable lawyer at McKinley Irvin.

If you need to speak with an experienced divorce attorney, contact McKinley Irvin at our Washington office.