Who Has to Pay a Spouse’s Gambling Debts During Divorce?
May 23, 2023 Divorce
When you have made the difficult decision that a divorce is your only option because your spouse is addicted to gambling and sustaining substantial losses, your next question might be to ask whether you will be responsible for his or her gambling debts.
If your spouse has been gambling for a while, which usually is the case by the time you are ready to file for divorce, your spouse may have spent his paycheck, depleted her savings, and even incurred credit card debts or incurred loans.
During a divorce, spouses either need to agree how they want their assets and debts divided or the judge will order a division of property. Michigan law provides that all assets or debts that were obtained during the marriage will be divided equitably. “Equitably” means “fair and impartial”. It does not necessarily mean equal.
Dividing Marital Debts in a Gambling Addiction Divorce: Understanding Equitable Distribution
When a spouse gambles during the marriage and depletes the bank account or incurs a debt, it is considered a marital debt that will need to be divided or apportioned because the debt was incurred during the marriage. Of course, Michigan law provides that the division must be equitable. Logically it is not very equitable when one spouse suffers through years of living with an addicted spouse and then to has to pay for a portion of the gambling debts as well.
So, what’s fair?
The Impact of a Gambling Spouse’s Debts on Divorce Proceedings
A better question is: what will likely happen?
What’s fair and what will likely happen are two different things. Let’s explore.
Michigan law allows for a fairness argument because assets and debts must be divided equitably. Michigan law also provides a lot of caselaw that equitable is almost always close to 50/50. Not exactly 50/50, but close to 50/50.
Navigating the Division of Assets and Debts in Divorce: Strategies for Dealing with Gambling-Related Debt
Let’s circle back to how a divorce is finalized: either by agreement between the spouses or by a judge’s order. Either your gambling spouse agrees to be responsible for all or most of his or her gambling debt, which is just not very likely, or you will need to request a judge to order an equitable but uneven division of assets.
And there is the problem. A judge will make a division of property after hearing all the testimony and reviewing all evidence during a trial. It takes a lot of work to prepare for trial, and the trial itself will take a long time. When considering if you should take the case to trial, you will need to consider the cost of a trial, with the small potential of a judge deviating from a 50/50 division, compared to settling your case without the cost of a trial.
In conclusion, if you are married to a gambling spouse who is using his paycheck or assets to gamble away the marital assets, your best option is to file for divorce as soon as possible to avoid paying for your spouse’s debts. Sometimes being served with divorce papers is the wake-up call a gambling spouse needs. Let’s have a cup of coffee and discuss your options; give us a call at 616-285-0808.