While parties going through the divorce process in Virginia might dwell upon how property is divided between them, many will overlook what happens with the debt they’ve incurred throughout the course of their relationship – before and during the marriage. In some cases, financial obligations are clear-cut, such as the mortgage you both signed or loan on the vehicle you purchased together. However, there are be questions and heated disputes over other debts, especially when one party tries to have the other held accountable for the full amount.
Because issues regarding assets and debt can be both confusing and stressful, you should trust a Virginia divorce attorney to handle the legal details. Plus, you may find it useful to review some background information on the key issues regarding debt in divorce.
Default Rule on Debt in Virginia Divorce: According to Virginia’s divorce law on distribution of property, marital assets must be split equitably between the parties; it also requires debts to be distributed in the same fashion. Equity means fairness, so the division may not be an exact 50-50 split. The critical issue is timing, since only assets and debts associated with the marital relationship are subject to equitable distribution. As a result, most loans taken before marriage are considered debts of the individual who obligated himself or herself.
Exceptions and Other Factors that Affect Debt in Divorce Proceedings: Aside from the default rule, other laws may apply to determine how debt is divided in divorce. For instance:
- There is a rebuttable presumption regarding designation of marital property. If there’s evidence that clearly demonstrates an asset or debt to be attributable to one spouse over the other, the court will order that it’s separate. With respect to debt incurred during the marriage, the burden is on you to have it excluded as marital property.
- The issue of marital debt or property is moot if you’ve executed a contract conforming to Virginia’s Premarital Agreement Act. In such a situation, the terms of the document apply to determine the issue of debt in divorce.
- It’s possible to enter into a divorce agreement with the other party on equitable distribution of property and financial obligations, which means state laws and court rules aren’t controlling on the issue. Many parties to divorce find that an amicable agreement is the preferred option for handling debt. That scenario is more likely to happen when you have an experienced lawyer to guide your negotiations.
Talk to a Knowledgeable Virginia Divorce Lawyer About Debt
Though this general overview may be in understanding the basics about debt in divorce, there are many other legal issues and subtleties that could affect your rights. You don’t want to be saddled with a financial obligation that doesn’t rightfully belong to you. If you’d like specific information that’s custom-tailored to your circumstances, please contact Shannon & Associates, P.C. at our offices in Chesapeake or Suffolk. We can set up a consultation to evaluate your assets and obligations as they pertain to the divorce process.