How Debts And Liabilities Are Divided In A Virginia Divorce

How Debts and Liabilities Are Divided in a Virginia Divorce

In Virginia, the division of debts and liabilities in divorce follows the principle of equitable distribution, meaning that both assets and debts are divided fairly, but not necessarily equally. Virginia Code § 20-107.3 gives courts the authority to classify and allocate debts incurred during the marriage.

1. Classifying Marital vs. Separate Debt

In Virginia, debts incurred by either spouse during the marriage for a marital purpose, regardless of who holds the debt, are generally classified as marital debt. This includes debts used for household expenses, mortgage payments, educational loans, and other debts that benefited the family. Conversely, debts incurred before the marriage or for non-marital purposes, such as personal luxury expenses or spending on an affair, are typically considered separate debt and remain the responsibility of the spouse who incurred them.

The court has discretion to consider the purpose of the debt, which spouse incurred it, and who benefited from it when determining whether the debt is marital or separate. This ensures that debts are distributed in a way that reflects the contributions and needs of both parties.

2. Dividing Marital Debt Under Equitable Distribution

Once the court classifies a debt as marital, it can be divided between the spouses under Virginia’s equitable distribution rules, as outlined in § 20-107.3(C). Equitable distribution does not necessarily mean an equal split; instead, the court considers several factors, including each spouse’s financial situation, earning capacity, and future needs.

For military families, special considerations may arise, such as debts related to PCS (Permanent Change of Station) moves or military-specific housing loans. The court will take these factors into account when dividing debts. Debts tied to marital assets, like a mortgage on a family home, are often allocated in proportion to the division of that asset.

3. Tax Implications and Credit Concerns

When dividing debt, it's crucial to also consider the potential tax implications and the impact on each spouse's credit score. Joint debts, such as credit cards, may continue to affect both spouses' credit after the divorce if not properly addressed in the settlement. Even if the court assigns a debt to one spouse, creditors may still pursue both spouses for payment unless the debt is refinanced or otherwise handled.

4. Why Experienced Counsel is Essential

Navigating debt division in a Virginia divorce requires skilled legal counsel, especially for military families with unique financial obligations. Our firm, with a focus on military families, has extensive experience dealing with multi-state divorce cases and the division of both assets and debts. We understand the complexities involved in allocating debts fairly, particularly in cases involving joint accounts, military benefits, and relocations.

Call to Action

For personalized advice on dividing debts and liabilities in your Virginia divorce, contact us today at 301-952-9000 or use our online scheduling link (CLICK HERE) to set up a consultation.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading this blog does not create an attorney-client relationship. For specific legal advice, please contact Patriots Law Group directly.