A refresher on divorce and debt

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When going through a divorce, most people focus on what they’ll receive in the settlement: the family home, a portion of retirement savings, child support, or alimony. However, one critical element often overlooked is debt. Addressing marital debt is just as important as distributing assets, and it’s worth revisiting the key points involved.

Virginia is an equitable distribution state, meaning that courts can divide property and money based on various factors such as each spouse’s financial need or earning power. This equitable distribution applies not only to marital property but also to marital debts. Keep in mind that “equitable” does not necessarily mean a 50-50 split. Instead, the division is based on each party’s contribution to the accumulation of property and debt.

Understanding Marital Debts

Marital debts refer to liabilities that you and your spouse acquired together during the marriage. For example, a student loan taken out long before your marriage would not be considered marital debt, as it is solely in your name and remains your responsibility. However, debts incurred during the marriage, even if only in one spouse’s name, are presumed to be marital unless proven otherwise.

For debts titled jointly in both spouses’ names, both parties will be held jointly responsible. This means that if your spouse fails to pay their share of the debt, creditors can pursue you for the entire amount.

Protecting Yourself: Indemnity Clauses

What can you do if your ex doesn’t pay their portion of the debt, and you’re left trying to maintain a good credit rating? To protect yourself, consider adding an indemnity clause to your divorce settlement. This clause would allow you to sue your ex-spouse for any unpaid debts that you had to cover yourself. It provides a legal safeguard, ensuring that you aren’t unfairly burdened with debts your ex is required to pay.

Plan Ahead

It’s essential to have a clear understanding of what you owe and what you can reasonably afford to pay off on your own. Ensure your divorce agreement includes clauses to protect you if your ex-spouse fails to follow through on their share of the debt.

Divorce is complex, and dividing debts adds another layer of difficulty. However, with the right legal advice, you can navigate this process smoothly.

Contact Us

The experienced family law attorneys at the DiPietro Family Law Group have decades of experience handling all aspects of family law, including the division of marital debt. We are here to help you protect your financial future.

Contact us today to schedule a consultation with a caring professional at (888) 530-4374, or visit us online for more information.