What You Should Know About Gambling Debts During a Divorce

Losses from gambling can have a lasting and devastating effect on your life and those of your family members. Sometimes, one person’s gambling habits may lead to debts and will be the cause of the divorce. In any event, if you are divorcing in New Mexico and your spouse has debts due to gambling, you may wonder what will happen with that debt once you divorce. Will your spouse be responsible for it, or will you have to pay a part of it?
During a divorce in New Mexico, shared property is divided between both spouses, and this includes debts as well. However, when certain losses or debts are the sole responsibility of a spouse–as with gambling–the court may take a different approach to property division.
If you are divorcing and concerned about your spouse’s gambling debts, learn more about how these types of debts could be handled in your case.

Community Property Division

New Mexico is a community property state, so all property owned by you and your spouse is categorized as “separate” or “community.”
Any items, assets or debts you and your spouse acquired during the marriage are community property,regardless of who’s name is on the asset or debt.  Most of your belongings will fall under this umbrella. Separate property is something that is solely owned by one spouse, particularly things that were acquired before you got married, such as student loan debt, or during the marriage from others such as inheritances, gifts and family heirlooms.
In court, the separate property stays under the ownership of the person it belongs to while the community property is divided. The division is on a fifty/fifty basis.

Lavish Spending Can Be Penalized

In a community property state like New Mexico, a spouse can be penalized when he or she “wastes” marital assets. Any time one spouse spends, gives away or disposes of money without the knowledge or consent of the other spouse, this can be considered “wasting assets”, and gambling is an example of this type of spending.  Whether the “waste” is due to a gambling addiction or spending on a mistress, the result is the same, and the court does not look kindly on a spouse who wasted assets during property division.
When you are in court for your property division, the judge will listen to arguments about wasted marital assets and consider them when dividing your assets. If your spouse spent a lot of your shared funds gambling, you may receive more property during the division than you would have otherwise as compensation.
Debts are usually handled the same way assets are, with community debts split equally between the spouses. However, if your spouse amassed a lot of debt during your marriage due to gambling, you may be able to remove those debts from the division process. If, for example, you have $30,000 owed on a joint credit card debt but $20,000 of that was your spouse spending money on gambling without you knowing or agreeing to it, the court may only hold you liable for the $10,000 not related to the gambling.
How gambling debt and spending are handled by the court will depend on the judge, but not every divorce is decided in court. You and your Albuquerque family law attorney may be able to negotiate a settlement with your spouse that accounts for his or her gambling. If you are worried about how your spouse’s gambling debts are going to affect you, speak to an attorney today.