Economists will tell you that a person can have good debt and bad debt. Mortgage? Good debt. Credit cards? Bad debt. In a Virginia divorce, all debt is bad. Divorce does not allow you an escape clause from debt, so just as the two of you will split up assets, you will split up obligations, as well.
Yes, Virginia, There is a Debt
The Code of Virginia is the law of the Old Dominion, and under §20-107.3, with the catchy title, “Court may decree as to property and debts of the parties,” we find this whammy:
“…the court, upon request of either party, shall determine the nature of all debts of the parties, or either of them, and shall consider which of such debts is separate debt and which is marital debt.”
Your goal is to get as much of your debt allocated as marital debt as possible, because you are on the hook for separate (personal) debt. You will equitably share responsibility for marital debt.
What is Considered Separate Debt?
Say you came to your marriage with a pile of bank, store and gasoline credit card bills. Those are in your name. Congratulations; they are your separate, personal debt. You own (or owe) those negative assets.
The accounting can get complicated, because throughout your marriage you may pay your bills and use both your resources (hers and yours) in an attempt to reduce the separate debt you each brought to the marriage. Unfortunately you are probably also using those cards for convenience. This keeps the debt revolving without disappearing.
You may be able to demonstrate to the court that, if those cards are still in use, you are really on the hook only for the amount of debt on all your accounts before your marriage, not the accumulated debt sustained during the marriage. The debt added to the cards during the marriage can be seen as marital debt.
Debt is also legally separate debt if you accrued it after the date of the last separation of you and your ex-wife, so long as one or the other of you intends the separation to be permanent.
If, before you married, you ran up your credit card for the benefit of the marriage or your children (paying for a tuxedo, wedding dress, tin cans to tie to the car, or a talented {?!?} accordion player for the reception), your capable attorney could show the court evidence that the debt was marital debt.
What is Marital Debt in Virginia?
Anything you do jointly during the marriage, from investments to accumulating debt, becomes shared property (real or intangible).
The Code of Virginia is firm on this, allowing the mutual tab to run to “the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent.”
Your goal is to demonstrate to the court that debt she incurred during the marriage was for a nonmarital purpose, so she owns (or owes) that debt. So if, while your marriage was deteriorating, she used your joint credit card for a weekend retreat away from you (spa, massage, casino, Zumba class, dining and wine-tasting), keep the receipt or credit card statement and she, not you, can be saddled with the bill.
How is Marital Debt Assigned in Virginia?
As for actually assigning the marital debt, the court has a fascinatingly complex list of factors it must consider, all outlined in subsection E of the law:
- What each of you contributed (monetarily and in other ways) to the well-being of the family
- The duration of the marriage
- The ages and physical and mental condition of the parties
- The issues causing the dissolution of the marriage, such as the grounds for divorce
- The debts and liabilities of each spouse, the basis for those debts and liabilities, and the property which could serve as security for all the debts and liabilities
Your Virginia attorney will work hard to make the burden of debt fair, but the court may turn to the higher-income earner (probably you) to take a higher portion of the marital debt.
Have a Plan: Call The Only Family Lawyer in Virginia Representing Men Only!
If you suspect you and she are heading for a divorce, collect paperwork that can help the court apportion debts as fairly as is practical. Dig out old statements, or contact your creditors for statements, that can be used to distinguish separate debt from marital debt.
Ideally, you should enter divorce proceedings with little or no debt. One reality of divorce: your attorney will expect to be paid for services, and that is a debt you will each carry.
For more information on how divorce and debt work, contact The Firm for Men at (757) 383-9184 to schedule a consultation. We can provide you with sound legal advice and, perhaps, some accounting tips as well.
