Marital debt refers to debt and financial liabilities incurred during a marriage. Such obligations may include credit card debt, student loans, a mortgage and business loans.
This debt must be repaid even when a couple decides to separate. Therefore, each spouse will likely shoulder some of the marital debt once the divorce is settled. Here is how marital debt is split in a Virginia divorce.
Marital debt is divided equitably
Virginia is an equitable distribution state, meaning marital debt is divided fairly between the divorcing couple. The court considers various factors when determining how to divide marital debt. They include:
- The income of each spouse
- The duration of the marriage
- The age and health of each spouse
- How and when the debt was acquired
- The tax consequences of the property division on each spouse
- Whether either spouse has a pension or expects retirement benefits
- Any other factors the court may deem relevant
Depending on the prevailing circumstances, you may end up with more or less of the marital debt to repay. It is also worth noting that you can agree with your spouse on dividing marital debt rather than leave it to a judge to decide. The court will ratify such an agreement if it’s fair.
You may still be liable for marital debt assigned to your spouse
When you borrow money from a lender, you enter into a legal contract requiring you to repay a debt. The court’s orders will not change your contractual obligations, and creditors can come after you to recover a debt you co-signed with your spouse, even if it was assigned to your spouse by the court. To avoid such a possibility, you or your spouse must contact the lender to remove your name from the debt.
Dividing marital debt can be a complicated and emotional process, but it’s crucial to approach it with a level head and a clear understanding of the law. Seeking informed legal guidance can help protect your interests by better ensuring a fair division of marital assets and liabilities.