Managing Gambling Debts in Divorce

Yael Selig

Gambling Debts and a Very Delayed Financial Claim

The question typically asked by parties within Divorce proceedings is how they should agree the issue of debt when one party agrees to take responsibility for the other’s debt – in exchange for a promise not to make a financial claim? A recent case involving an individual’s gambling debts was compounded by a 9-year delay before a financial remedies claim was made.

At Osbornes Law, the experienced divorce and financial remedies solicitors work with clients in London and the surrounding regions. We regularly advise clients where one or both parties have incurred significant debts and liabilities during or after the marriage.

Debts on divorce

On divorce, the courts consider all the assets acquired and debts incurred during the marriage. Like matrimonial assets, debts are generally considered to be marital debts unless it is clearly a debt of just one of the parties.

Matrimonial debts include joint debts, as well as debts that are in the name of one party but which benefits them both. Debts that are unlikely to be considered marital debts include unreasonable or frivolous spending, such as gambling or excessive expenditure on a hobby.

1RN v TT [2024] EWFC 264

A final hearing took place a surprising 13 years after the parties actually separated. They were married for around 7 years and had two children.

The wife (W) was a GP, the primary carer of the children, and owned all the matrimonial assets (valued at around £429,000) with very minimal debts. There were no joint assets. The husband (H) was a painter and decorator by trade, though he had not worked much for a long time and relied entirely on benefits.

The marriage broke down in 2011 when W discovered H had been using her credit cards to fund his gambling habits. It appeared H had gambled for several years but it was difficult to know the full extent. He also had a fraud conviction and suffered mental health issues.

However, neither issued a divorce petition until W begin proceedings in 2017. This was finalised in November 2018 – and then in August 2020, H issued a claim for financial remedies. He argued that he was entitled to half the £43,700 net equity of W’s flat, a total lump sum exceeding £205,000 and a 45% pension sharing order in respect of W’s three pensions

W’s case was that when they separated, she had agreed to take on his gambling debts – around £34,000 – so long as he made no future financial claims against her. Unfortunately, financial dispute resolution was unsuccessful in resolving the issues.

Delay

The judge found that H had not explained why he had delayed in moving his claim forward and cited previous authority stressing that public policy is “hostile” to delay. The court ruled that the delay was “so potent a factor as not just to reduce but even to eliminate what might otherwise have been awarded… “.

Crucial to the judge’s decision was the fact H had told W he would make no claim against her if she took responsibility for the debts – then made no claim for a decade. Meanwhile, she had continued to accrue assets in her own right, to which he had made no contribution.

Therefore, this was not a case of “righting an unfairness”.

Final order

W had proposed a £35,000 lump sum and pension sharing order of 75% of one of her pensions, which the judge considered reasonable in the circumstances. He said H’s needs were not ‘relationship-generated’ – and in any event, his needs could be met just as they had been since 2011 – in rented accommodation with the rent met by state benefits.

H was awarded a £35,000 lump sum together with a pension sharing order of 100% of the pension – the increase from the proposed 75% was to allow for a possible rise in value of the pension.

How Can We Help?

Any couple who is separating and are able to agree not only the division of assets, but also the responsibility for specific debts, should consider formalising the agreement by way of a robust consent order. Each party should take independent legal advice before doing so to avoid any risk of a dispute in future.

In circumstances where you intend to make a financial claim against the other party, regardless of any agreement, it is vital not to delay taking expert legal advice from specialist divorce solicitors. Contact the leading divorce partner Yael Selig, or:

• Fill in our online enquiry form;
• Call us on 020 7485 8811