My Husband Gambled Away Our Life Savings — 5 Steps I Took To Rebuild My Finances
Written by
G. Brian Davis
Edited by
Rebekah Evans
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Sarah and Mark had been married for 14 years. On the surface, they lived a comfortable life on Long Island: two kids in middle school, a beautiful home, steady income.
One day Mark started betting on sports online. It began with a few bucks, a cheap hobby for fun. Then it spiraled into a compulsion.
Over the course of three years, Mark borrowed extensively. He took out a home equity line of credit without Sarah’s knowledge. He emptied part of his 401(k), cashed in life insurance policies and racked up tens of thousands in credit card debt. By the time Sarah uncovered the debts, they were over-leveraged and teetering on financial collapse.
“She was devastated, not just by the money, but by the secrecy,” said Melissa Murphy Pavone of Mindful Financial Partners, who worked with them as a certified financial planner (CFP) and certified divorce financial analyst (CDFA). “The man she trusted had risked their family’s future without telling her.”
Here’s how Sarah rebuilt her financial life after starting from scratch.
Blocked Access To Joint Assets
A drowning person grasps for anything within reach. It’s up to you as an addict’s spouse to block their access to more money to gamble away.
Shane Lucado, attorney at InPerSuit, said Sarah did the right thing by cutting off her spouse’s ability to keep digging deeper into debt. “Shut down every joint account, revoke power of attorney if it exists and notify all creditors in writing. If your name is on a shared account, you are on the hook for debt.”
Once you’ve stopped the initial bleeding, you can start documenting the behavior, the losses, the debts. “Every bank statement, text message, screenshot and email that shows gambling behavior or unauthorized transactions needs to be backed up. Documentation is the difference between recovery and ruin. If your credit is hit or your wages are garnished later, you will need proof that you acted fast and did not enable the behavior.”
Collaborative Divorce
Pavone noted that divorce rates run high when one spouse becomes an addict. And sure enough, Sarah decided to part ways with Mark.
Still, Sarah didn’t want a scorched-earth divorce. “She wanted privacy, dignity and a path that would allow Mark to focus on recovery for the sake of their children,” Pavone explained.
They assembled a team of experts to help them. That included Pavone as a neutral CDFA to untangle their finances, clarify debts and create a plan for division. It also included collaborative attorneys for each of them, a mental health facilitator to help them navigate hard conversations and a therapist for Mark who specialized in addiction recovery.
Together, they worked out a plan.
Refinanced Family Home
Sarah refinanced the family home in her name only. She took on the ownership and new mortgage debt by herself.
New Budget and Debt Strategies
The team helped Sarah and Mark negotiate debt repayments with their creditors as part of a settlement. These included protections for Sarah so she wouldn’t be responsible for any new debts Mark might incur.
Once the divorce terms were agreed, the healing — both financial and emotional — could begin.
“Sarah met with a CFP, updated her estate plan and created a new budget that gave her clarity and control. She opened new accounts in her name and rebuilt her credit. She also started seeing a therapist to process the trauma of financial betrayal.”
Co-Parenting Plan
As part of the collaborative divorce, Mark agreed to enter a recovery program with a structured financial accountability plan in place. Sarah wanted Mark to recover, wanted him to return to the father he was before the addiction.
Mark successfully overcame his gambling addiction and the couple entered a co-parenting plan. “Sarah and Mark’s collaborative divorce prioritized their kids and allowed Mark to focus on recovery, not court battles.”
Often, that’s the best you can do, with a spouse in the throes of addiction.
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Sources
- Murphy Pavone, Mindful Financial Partners.
- Shane Lucado, InPerSuit.
