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When divorcing, where does debt go?

Divorce can include a lot of moving parts. Issues around child custody or property can become major points of contention between two individuals.

Many separating couples do not consider what happens to their debts in a divorce. How does Virginia assign debt, post-marriage?

The three categories of debt

Virginia is an equitable distribution state when it comes to property and debts. The state views marriage as an "economic partnership". A court will examine your finances before marriage and what you've accumulated during the marriage. It will classify debts into three categories:

Marital

Any debt taken on throughout the marriage is marital debt. If you and your spouse bought a house, the mortgage is marital debt. Same if you purchased a car together - any unpaid costs from the sale are marital debts.

Separate

Debts accrued before the marriage or independently during the relationship are separate. These are debts acquired by one party. If you owned a business before the marriage, any debt from that business is separate. Courts will not attempt to divide separate debt.

Part marital/part separate

These debts include both parties in some way. This is especially true if you have each used resources to pay into the debt. If you inherited a house, that's a separate asset. But if you and your partner took out a loan together to fix the house, that debt could be part marital and part separate.

The court will attempt to categorize all debt of both partners before dividing it.

Dividing debt fairly doesn't mean evenly

People often believe a court divides all debt evenly in a divorce. This is not the case. Before ruling on debt division, the court looks at both people's earning potential. It also takes into account the best interests of any children involved.

The court will assign debt in a way it considers "fair." If your ex-spouse has a significantly lower earning potential in the eyes of the court, you will likely get a higher share of the debt burden. If one person came into the marriage with the majority of debt, they'll probably be assigned a higher amount in the divorce.

Divorce can quickly become a complex issue, especially when it comes to finances. If you have any questions around debt division or the divorce process, a skilled family law attorney can help.

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