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.

Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.

The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.

Regulation of gambling

The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.

The following legislation is pertinent to gambling:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gambling

The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.

As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.

There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.

Enforcement over foreign jurisdictions

If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.

Conclusion

Online gambling remains a highly regulated sector with seemingly limited horizons to grow. While the present regulatory framework makes it difficult for offshore gambling websites to target customers in India, the India-based companies can only distribute and market state-government lotteries online in permitted territories. The pervasive authority with the government to block gambling related websites and the impossibility of enforcing gambling-related contracts further discourage the prospects for the industry.

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.