Debt is a significant concern for many divorcing couples in Virginia. Most people worry about how they will divide debt during divorce, whether they will still be responsible for their ex’s debts after the divorce is settled and the potential impact on their credit scores.
While sorting out such financial matters in a divorce can be challenging, understanding how things work can help you navigate this process more efficiently. Here is what you need to know.
Only marital debt is up for division
The first step in dividing debt is determining which debts are marital or separate. Marital debt includes any debts acquired as a married couple or for the benefit of the marriage, regardless of whose name is on the account. These may include car loans, mortgages or credit card debts.
Separate debts are debts incurred by either spouse before the marriage. Everyone is responsible for their separate debt, which means these debts are not divided during the divorce.
Marital debts are divided equitably
Virginia courts consider various factors to reach a fair debt division. These include each spouse’s income, financial and non-financial contributions to the marriage, ability to pay off the debt and who primarily benefited from certain debts.
For instance, if one spouse used a credit card for personal expenses, the court may assign that debt specifically to them. Remember, equitable division aims for fairness, which doesn’t always mean a 50/50 split. The court may assign more debt to one spouse if they have greater financial means than the other.
Protect your financial interests during divorce
You may still be responsible for debts assigned to your ex if you cosigned on them. Should they default, it could expose you to legal actions or hurt your credit score. Additionally, you may encounter complications like when marital funds were used to repay a personal debt.
It underscores the need for informed guidance to help secure a fair debt division while safeguarding your rights and interests.
