Debt, Credit Cards and Divorce – Who Will Be Responsible to Pay the Marital Debt?

Rhode Island has no specific statute related directly to assigning Marital Debt in a Rhode Island Divorce. Theoretically, issues concerning Marital Debt are determined under the RI Equitable Division Statute RIGL 15-5-16.1. If the matter goes to a full trial on the merits, which is unlikely, the judge must rely on the equitable division statute 15-5-16.1 to determine assignment of assets as well as debt. Please contact a Rhode Island Divorce Lawyer / Attorney about your RI Divorce case. All debt incurred by husband and wife during the Course of the marriage constitutes marital debt. Debt incurred prior to the marriage is the responsibility of the person who incurred the debt.

How is marital debt actually divided in Rhode Island Divorce? That is a very difficult and complicated question. There is no clear answer. The answer can only be determined by analytical reasoning. As a practical matter, assignment of marital debt is usually negotiated by the parties during the course of the divorce without the necessity of a trial. This article should be used for informational purposes only and not as a substitute for obtaining a Rhode Island Divorce lawyer. Judges tend to look at the following factors when determining assignment of marital debt:

1) The court looks at whether the debt was incurred in furtherance of the Marital Partnership. Marriage is a partnership. If the debt was used for home goods, groceries, clothes, family vacations, medical bills etc. then the Court is more likely to divide the debt equitably between the parties.

If the debt was incurred by either husband or wife in furtherance of his or her own agenda then the debt is more likely to be assigned to the person who incurred the debt. For example, gambling debt, debt used in furtherance of an affair or unreasonable debt incurred without the consent of the other spouse is more likely to be assigned to the person who incurred the debt. This type of debt is theoretically “marital debt” although it is inequitable for the other spouse to have to pay. For example, gambling debt should be paid by the spouse who lost the money at the casino.

2) Who will have title and / or possession of the goods or items for which the debt was incurred? This is a significant factor. If the husband purchased a flat screen television on his Mastercard and he will get the flat screen then it is more likely that he will be assigned that debt.

The person who is assigned the vehicle/ boat will usually be responsible for the debt which secures the automobile / car / boat. As far as real estate is concerned, the person who is assigned the real estate will usually be responsible to pay the mortgage, taxes and insurance for the property. This can get more complicated if a home equity line was used to purchase an asset which will be titled in the name of the spouse who is not assigned the real estate.

3.) What is the earning capacity, assets and ability of the parties to repay the debt? If one spouse has significantly higher income or earning capacity in the future then the other spouse then that spouse may be ordered to pay a larger share of the marital debt. This is a very practical determination since it makes no sense to assign debt to a person who cannot afford to repay it. Sometimes neither party can afford to repay the debt.

In some cases the parties decide to file a Joint Bankruptcy Petition. In some Rhode Island divorce cases, one spouse files for Bankruptcy and the other does not file. The effect of Bankruptcy on Court orders and obligations in the property settlement agreement is beyond the scope of this article.

There may also be a foreclosure of the marital real estate or the parties may agree to a short sale. Foreclosures and short sales are also beyond the scope of this article. Please consult with a Rhode Island Family Law Attorney or a RI Bankruptcy Attorney about these issues.

4.) Who is at fault for the breakup of the marriage? If one spouse had an affair, abused alcohol or drugs or was physically abusive then that spouse may be ordered to pay a larger share of the debt. Cheating on your spouse could carry a penalty of being responsible for a larger share of the marital debt

5.) Is the debt in the husband or wives name or is it joint debt? This is a very practical determination. Judges may be more likely to assign certain debt to a spouse who is the “obligor”. (In that person’s name) The justification for this is simple. The Obligor has an independent legal obligation to repay the third party creditor.

If both parties have an equal amount of marital debt in their name then the easy answer may be assigning to each party the debt in their own name. If one spouse has a disproportionate amount of debt in their own name then the Court could order one party to make periodic payments towards the debt to the other. The Court could also order certain property to be sold and the debt paid.

Joint debt is an even more perplexing issue. Joint debt means debt that both spouses owe the debt to a third party creditor. This is typically credit card debt, real estate mortgages, vehicle debt, store credit cards. If the Court assigns joint debt to one spouse, the other spouse must be vigilant to make sure that the debt is actually paid on a timely basis.

Even though the Rhode Island Family Court may assign joint debt, this assignment does have any effect on the legal obligation of either spouse to repay the debt to the third party creditor. Credit Card companies such as Mastercard, Visa, Chase, Wells Fargo and American express do not care what some state Family court Judge orders. All they care about is whether they get their money back with interest. The person who signs a promissory note or debt agreement is responsible for that debt Vis a Vis the third party creditor. This obligation is irrespective of any Rhode Island (RI) Family Court order or property settlement Agreement.

If one spouse is assigned certain debt and does not make payments or does not make payments on a timely basis then that conduct can wreak havoc on the other spouses credit rating. This is especially the case if failure to pay the debt results in foreclosure, lawsuits or repossession of the car/ automobile. If payments are not made pursuant to Court order or a property settlement agreement then the other spouse can seek relief in Court with a contempt motion or a motion to enforce the property settlement agreement.

It makes little to no sense to assign debt to a spouse who has no income or ability to repay the debt because the assignment will actually harm the other spouse because their credit may be severely harmed. Rhode Island Attorneys legal Notice per RI Rules of Professional Responsibility:

The Rhode Island Supreme Court licenses all lawyers in the general practice of law, but does not license or certify any lawyer / attorney as an expert or specialist in any field of practice.

David Slepkow is a Rhode Island Divorce Attorney concentrating in Divorce, Family law, Child Custody, Child Support, Personal Injury, Auto accidents and Criminal law. He is a partner at Slepkow Slepkow & Associates, Inc in East Providence RI. He is a member of the Rhode Island Bar, Massachusetts Bar and the Federal Bar for the First Circuit, District of Rhode Island.

Effects of Gambling

Limiting gambling in America would greatly affect people who regularly gamble. These individuals would be helped in many different ways, especially with them not gambling all of their money away. There is nothing wrong with gambling that is done in moderation with self discipline, you can’t be loured in by every casino you see whether you are visiting Las Vegas, Atlantic city, or anywhere else that there are casinos.

Gambling can lead to many negative things in society like suicide, theft, divorce, bankruptcy, and it sends false messages to the public, it dangles a pot of gold in gamblers faces through the television messages, radio ads, magazines, billboards, and other avenues. However, they are not advised on how hard it is to actually win and win big. Whenever people go to a casino, it is set up to take their money or the majority of it.

All casinos are set up to take anywhere from eighty-six to ninety-eight cents on every dollar spent in the casino. Most casinos these days usually take, at least ninety cents on every dollar spent in their casino gambling over an extended period of time. Therefore, a person winning in the beginning playing, the longer that person plays the same game, the more he or she increases their chances of leaving the casino a looser. Again, because the casino is set up to come out on top in the long run. Ronald A. Reno: “why would any community welcome an industry that undermines the work ethics, spawns crime, hurts other businesses and costs jobs, increases divorce rate and child abuse, victimizes youth and the poor, while giving rise to suicide and several mental-health problems?” Insight on the News magazines, Las Vegas, Nevada, November 13, 2005 volume 11 number 43.

For the individuals who differ in opinion with me, I just want to ask you, how would you feel about a casino opening five minutes away from your home? You probably would not like that too much now would you? The fact of the matter is that there are great consequences usually that are associated with gambling. The crime rate , drug usage, and suicide rate will definitely skyrocket and have a trickle down effect on society. For example, if you start using drugs you might start abusing your wife, children, or friends and that all stems from the root of it all, gambling. Just like author Robert Goodman wrote “Gambling’s intimate link to crime is another fact the industry has tried desperately to conceal.” New York: Free Press, c2008, XiV, p.273, 25 cm. So for my critics if you were for more casinos in the area, I would tell you to be prepared for more crime amongst the other negative effects that gambling brings. William Thompson said “Until the facts about gambling are on the table, many communities will continue to be seduced by legalized gambling’s siren song. Hunting Press, Las Vegas, Nevada, November 2006 Gambling Advisor. All of the points of view should show the critics why government should control gambling, and therefore eliminating some of the negative aspects that gambling brings.

Casino Gamblers should wake up and see that they are getting exploited by these big enterprises and they only exist because there is a demand for them. Casinos have a humongous advantage over the customers, and they will always come out ahead because the business is designed that way. Margaret O. Hyde said “Each year over 1 million visitors come to Las Vegas to gamble and end up leaving $1 Billion for the gambling industry.” Most gamblers of the casino are losers except for a few who get to go home and brag about their winnings, and therefore, end up encouraging more people to go to the casino and loose.

One of the best way in which to lower the odds of mostly leaving the casino a looser would be to play more table games like blackjack and just totally learn the game ins and outs. Bobby Singer “Blackjack is a table game offered in most casinos around the world, it is both the most popular and most profitable of all the casinos games around the world” There are many skilled gamblers that study their trade as any great craftsman. If you are into increasing your odds of winning, please educate yourself.