The property division process during divorce addresses both assets and debts. Spouses must provide one another with thorough disclosures in court regarding their obligations and holdings. They then either work together to settle their disagreements or prepare to litigate.
Virginia has an equitable distribution statute in place. The law requires a fair and appropriate division of both property and debts. The financial obligations of the divorcing spouses can easily become a point of contention during divorce.
One spouse may have spent far more than the other or may even have hidden their financial conduct. Is it possible to exclude certain debts from the pool of marital property and obligations during a divorce?
Misconduct can influence debt distribution
Generally speaking, debts owed prior to the marriage, such as the student loans of one spouse, remain the separate financial obligation of the spouse who brought the debt into the marital relationship. Most debts accrued during the marriage are subject to division if the spouses divorce, but not all debts are automatically part of the marital estate.
Occasionally, spouses may be able to exclude certain debts from the pool of marital financial obligations. In cases involving the dissipation of marital assets, debts taken on with the malicious intent of diminishing the marital estate may not be subject to division. If one spouse suddenly accrued thousands of dollars in frivolous credit card debt in the weeks before they filed for divorce, the courts may agree that the spouse who incurred those debts is solely responsible for repaying them.
The courts may employ a similar approach to debts related to adultery. If one spouse used a credit card to buy gifts, pay for hotel rooms or fund travel with an affair partner, evidence of that financial misconduct could convince the courts to set aside those debts when assigning responsibility for joint financial accounts.
Occasionally, scenarios involving long-term financial infidelity where one spouse opened hidden lines of credit and never revealed their debts to the other may also warrant a review by the courts. Those concerned about taking responsibility for a spouse’s debts may want to discuss their finances with a family law attorney. Learning more about the rules that apply during complex property division proceedings can help spouses protect themselves.