This is the next post in a series of articles discussing how financial irresponsibility may impact divorce proceedings in Las Vegas, Nevada. My previous article focused on how credit card debt is typically divided between divorcing spouses. Generally speaking, debts and assets incurred by a couple during their marriage are equitably divided between them as part of their property settlement. This may even be true if one spouse incurs high levels of credit card debt without the knowledge of their partner. Given the potential impact of a spouse’s reckless spending habits on one’s divorce settlement, it is important to take prompt corrective action once such behavior is identified. Contacting an attorney quickly can help reduce one’s exposure. In this post, I will address another common issue arising during Las Vegas divorce cases – how a spouse’s gambling debt may impact a property division. If you need assistance, contact my office today to speak with a lawyer.
As stated above, under Nevada’s community property laws, the Clark County Family Court usually attempts to divide marital debts and assets equitably between divorcing spouses. Under normal circumstances, a gambling debt incurred during a marriage would be considered marital debt. One can imagine certain circumstances, however, where the gambling debt of one’s spouse may be considered extraordinary and their partner should not be responsible for repaying half. Whether one’s gambling debt is included in the Court’s calculation of marital debts is dependent upon several factors. The Court will review information such as the frequency of one’s gambling, whether or not the parties jointly participated in the creation of the debt, and the amounts of money being risked in comparison to household income. Based on this analysis, the Court will determine if the debt should be equally shared or borne by the financially irresponsible spouse. If the gambling habits amount to marital waste, the person who committed the waste may be solely liable for the debt.
This concept is best explained by example. Bob and Pam have decided to divorce after 10 years of marriage. Pam is a preschool teacher and makes $30,000 a year. Bob is an accountant and makes $125,000 a year. At the time of their divorce, the couple has a $50,000 mortgage loan and a credit card balance of $10,000. Pam also discloses that she owes $5,000 to a local casino after having bad luck during her once annual casino weekend with friends. Her behavior was isolated and the amount of debt is relatively low compared to their household income. Under these circumstances, the Court would likely add the gambling debt to the other marital debt and divide it between them, making each responsible for $25,000. Now suppose that Pam discloses $25,000 of gambling debt. Bob learns that she has been secretly visiting different casinos every day on her lunch break for a year and risking several hundred dollars at a time. Her behavior indicates a habitual gambling addiction. She has spent more than her annual salary and incurred debt almost equivalent to what it takes her a year to make. In this case, the Court may absolve Bob of responsibility for Pam’s marital waste. If so, they would divide the credit card and mortgage debt equally (both responsible for $20,000) and add the gambling debt to Pam’s side of the ledger. Pam would be liable to repay $45,000.
In light of the potential long-term financial consequences of a divorce, it is imperative to retain an attorney experienced in such matters to represent your interests. If you need assistance, contact my office today to speak with a Las Vegas family lawyer.