You have a one in six chance of hitting a jackpot on a slot machine at Rosie’s Casino in Hampton. What are your chances of living in a community property state? Nine in 50. If you are going to gamble (either at Rosie’s or in marriage), Virginia is a good bet. Virginia is not a community property state. You can come out a winner with your property settlement agreement in divorce.

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Community Property

In the nine community property states, assets and debts — generated by either spouse — during the marriage are considered joint property. They are divided 50-50 at the dissolution of the marriage. In those nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), half of your spouse’s debts are yours to pay. Half of your debts are for your spouse to pay.

(Community property also applies in Puerto Rico, just in case you needed to know.)

Equitable Division

The other 41 states — including Virginia — are common law states, meaning the debts and assets acquired by one spouse belong to that person, unless they were put in the names of both. In Virginia, this equitable division of both assets and debts means you “take back” what was yours before the marriage, and your spouse “takes back” what belonged to your spouse.

That aspect of debts and assets is clear enough; what you came to the marriage with, you take out. During the marriage, though, you are both legally assumed to be working in partnership for the good of the marriage. Assets and debts you take on during the marriage are for the good of the marriage, your family, and the future of your relationship.

This is all legally wrapped up under Code of Virginia § 20-107.3, which your divorce attorney can explain to you. The judge is the final arbiter of each spouse’s responsibility for marital debts.

Financial Infidelity

But something malign can crop up during an unhappy marriage: financial infidelity. Forbes identifies financial infidelity as lying to your spouse about money. That can mean everything from hiding a gambling addiction (no offense to Rosie’s Casino) to secretly shopping online after bedtime.

It can mean pretending to make $100,000 when you really make $50,000. It can mean quietly withdrawing money from savings or retirement accounts from time to time.

Other techniques spouses use to deceive, as laid out by MoneyCrashers:

  • Rounding purchase prices down
  • Covering up missed debt payments
  • Hiding bank accounts
  • Concealing income

Perhaps the most common way a spouse commits financial infidelity is by racking up hidden debt through secret credit cards.

In Virginia, if you and your spouse both sign a legal contract with a third party, you are both responsible for the debt (purchasing an automobile, buying a timeshare, acquiring real estate, and the like). That is a marital debt, because the item is marital property.

If, though, your spouse takes out a credit card and you do not know about it, your spouse is solely responsible for the debt, even during the marriage.

Evidence

During property settlement, your spouse may continue to hide debt from you, your attorney, and even your spouse’s attorney. In that situation, none of that secret debt is your problem. If you did not know about it when your spouse took on the debt and do not know about it during settlement, your spouse’s debt is not your debt.

If, though, the opposing attorney discloses previously unknown debt incurred by your spouse, the burden to prove your complicity is on your spouse, not you. To prove some of that debt is on your shoulders, your spouse and opposing counsel have to show your signature on a contract or credit application.

If a bank or lender attempted to pursue you for a debt your spouse incurred, the bank would similarly have to prove you were a co-signer.

Forgery

So far, everything we have talked about is a civil law matter. But spouses committing financial infidelity can easily justify committing forgery, by putting your signature on a credit application. With forgery, your spouse steps into criminal behavior.

Your attorney can fight a lender’s accusation that the debt is jointly owned by proving you did not sign the application. This action serves to protect your credit history. If you successfully defend against the liability, an additional charge of forgery — a criminal offense — can be brought against your spouse.

Changing Times Call For Changing Strategies

While property settlement agreements generally move along briskly and amicably, and many couples pursue an uncontested, no-fault divorce, revelations of financial infidelity can destroy any good faith you may have had.

Your attorney will likely advise you, with the revelations of secret debt, to consider a much more stringent property settlement agreement or even a contested divorce. Discovering secret debt, far from making you liable for your spouse’s debt, gives you leverage to push back against spousal support, for example.

Your family law attorney is your strongest ally for your divorce, but if your spouse commits forgery, you may need to consider enlisting a criminal law attorney. If a creditor wrongly pursues you to collect your spouse’s hidden debt, attorney fees for your defense should be paid by your spouse, not you.

The Firm For Men specializes in vigorously defending the rights of Virginia’s men in family law matters. Contact us today or telephone us at (757) 383-9184 to discuss your concerns. With apologies again to Rosie’s Casino, why gamble on your divorce? We can help protect your finances, defend you against false accusations, and provide wise counsel on property settlement agreements.