My Ex Accumulated Reckless Gambling Debt – Am I Liable? (Marital Dissipation)

I had a listener write in and ask a question that reads, if one spouse accumulates excess debt through reckless spending, such as gambling, drug use, or overspending, is the debt still divided equally? And how do I overcome this? So first off, let me start out saying that this is not legal advice. You do need to understand the laws in your state. You may need to consult an attorney. But I can tell you from a mediator standpoint, I do see this a And there’s a legal term that we use called marital dissipation and waste. tax returns showing that the husband and the wife historically throughout the marriage had gone gambling together and their winnings were on their tax returns. So in that particular case, it was not considered marital dissipation and waste because it was a historic practice of the parties during their marriage. Now, granted, since they had split up, the husband was going and then the wife was not, but it was not marital dissipation and waste in that particular story because it was historic. You know, some people went on date nights. Some people went out to eat. These particular people like to go gambling. And so it was historical. Something else that I get is alcohol, you know, excessive drinking. They’re always, you know, for example, you could pull a credit card statement or a bank statement and see, you know, liquor store, liquor store, liquor store, liquor store. Um, and they’re like, oh yeah, you know, they just been wasting all the money on alcohol, but you know, that’s why when we do discovery, that’s why in mediation, we’re looking at the past three years, bank statements, three years, tax returns, three year credit card statements, because we need to see historically what was going on long before anybody anticipated filing a divorce action. And so, you know, if there has historically been the spending, um, then is it marital dissipation and waste? Usually not. Drug use. Drug use is an interesting one. Usually drug use is not. At least I have not seen the drug use as marital dissipation and waste because it has been classified, you know, for the most part as a sickness. And, you know, I’ve seen, you know, rehab bills, you know, three, four, even seven times in rehab. Is that marital dissipation a waste? If it was going on during the confines of the marriage long before anybody anticipated a divorce, well, at some point you knew you married a drug addict or they had a drug addiction and you kept spending marital monies to try to fix it. So now that you’re filing divorce, can you claw back and try to recoup those monies? Usually not. What about just overspending in debt, as they asked? It depends. If there are historic spending habits, and that’s why, again, we look at credit cards and we look at bank statements to see, you know, what is the historic spending habit, you know, usually in a relationship, you’ve got somebody that’s a spender and somebody that’s a saver. And now that a divorce is happening, the saver is like, oh, my gosh, they spent all the money. I need to recoup this and do an unequal distribution of the marital assets and liabilities. But that’s why we’re looking back. So what does not get divided equally? Well, marital dissipation and waste. So let’s say, for example, one of the parties was having an extramarital affair in the state of Florida. We are in no false state, but that does not mean that you can spend marital monies on an extramarital affair and get away with it. Is that going to stop a divorce or is that going to ding you in the divorce? divorce, well, no, the divorce is still happening. You’re not going to be punished for having an extramarital affair. But if you were spending marital monies on that extramarital affair, well, then yes. So recently I had a mediation where the husband had a girlfriend in another country and so was spending a lot of money on airline tickets to fly down to this country in South America to see his girlfriend. Occasionally he flew his girlfriend up and they went to New York on one occasion and And they went out to dinner. They went to a Broadway show. And so looking at the credit card statements and the bank statements, we were able to, without having to get forensic accountants and everybody involved, just the attorneys and myself, we were able to go through everything. And we found that there was about $8,000 to $10,000 of monies that were spent, which was considered marital, which the wife is now not going to be responsible for half those debts. So if there’s $8,000 in debt, well, she’s not responsible for four of those. He is responsible for all eight because that was used for an extramarital affair. That was marital dissipation waste. So the second part of the question is how do you overcome that? Well, again, to overcome, we’ve got to look at the bank statements, the credit card statements. We’ve what is historic during the marriage to then see, okay, well, is it marital dissipation and waste? Sometimes forensic accountants are necessary, but a lot of times just the attorneys and the mediator can get through that and see what is historic and then what is abnormal. So hopefully that answers that question for this listener as well as the rest of you. And I look forward to getting more questions.