Virginia Separate Debt in Divorce

Posted on Dec 8, 2023 by Katie Carter

We talked the other day about debt when it is marital and how it is often divided in a divorce.  But marital ASSETS are categorized as either separate or marital before they are divided – so what happens in the event that debt is separate?  It’s a good question.

Typically, separate property is anything that is earned, purchased, or acquired BEFORE the marriage, or AFTER separation.  Separate property can also include things like gifts (from someone other than your spouse), inheritances (in your name only), and personal injury settlements.

Separate Property

As far as debt is concerned, the question is just whether it was incurred before, during, or after the marriage – and that will help tell us whether the debt in question is marital or separate.

Separate property is, by its very nature, separate – meaning that it belongs solely to one spouse or the other.  Contrary to popular belief, property is not separate just because it’s in one spouse’s name only.  Debt is the same.  Even if it was incurred only by one spouse, that doesn’t mean that it belongs only to that spouse – though, theoretically, it’s possible that the court could order that only one spouse be responsible for it.

If the debt was incurred prior to the marriage, it is separate.  If it was incurred after separation, it’s separate.  The date of separation is going to be the relevant date here.  In most cases, after this point parties stop using jointly owned credit cards, or they remove the other spouse as an authorized user on their own cards.  In any case, what you charge to your credit card will be your responsibility.

Similarly, if you were to, say, buy a house after separation, that would be a separate asset as well – provided that the money that you used to make the down payment (and any other related payments) was separate money.  If you separate and then use money from the joint checking account to make up your down payment, you will likely find that – though the house itself is yours separately – you have to account for the marital money that you took from joint checking for the down payment in equitable distribution.

If you used, on the other hand, money from an inheritance or a trust fund, or money in a savings account that existed prior to marriage, or money from a bonus that you received after separation, for example, then the house is purely separate.

When we look at debt – or property, for that matter – we look at when it was incurred.  Before marriage or after separation, it is likely to be separate.  Debt incurred during marriage, though, or using money that was earned during the marriage, is likely to be marital.

Marital Debt

Just because debt is marital, though, doesn’t mean that it has to be divided 50/50, or even that one spouse might not end up with the lion’s share of the debt.  If, for example, your spouse is using the joint credit card to wine and dine his mistress before separation, that doesn’t mean that the debt is separate – but it does mean that you have an argument to make for why he should take on the entirety of the debt, at least as it relates to his adultery.

Likewise, if he has a gambling or drug addiction, and he liquidated marital assets to fund it, the assets are still marital.  Your assets, too, were lost through the addiction.  But that doesn’t mean that the judge has to divide the remaining portion 50/50.  That’s one of the major benefits of being an equitable distribution state; we don’t assume an automatic 50/50 split.  We will look at each party’s negative and positive monetary and non-monetary contributions to the marriage, and those will influence how the assets, liabilities, and responsibilities are divided between the parties.

If his addition rises to the level that it becomes a negative monetary contribution to the marriage, he might find that, in the divorce, he has to take responsibility for the extent to which his actions reduced the overall marital share.

If he liquidated his retirement account and the judge orders you get to keep yours without paying him a portion, that doesn’t mean that the retirement account is separate – it’s marital still, you just got a division other than 50/50 because of his actions.

The court will assume that marital assets and liabilities will be split, so it would be up to you to make the case – through evidence, witnesses, and exhibits – that his behavior led to inappropriate debt being incurred or massive amounts of money spent.  To the extent that he has some culpability for this loss of marital assets, the judge would consider any explanation you offer.  Your husband will have a chance to mount a defense as well, and it’ll be up to the judge to decide whether to order a different division.

Alternatively, you could enter into a signed separation agreement.  Your husband could agree to take a larger share of the debt because of the money he spent on his affair, but those are your only two options.  You either go to court and let the judge decide, or you negotiate a separation agreement between the two of you.

To the extent that your debt is truly separate, though, it would have to have been incurred prior to marriage, or after the date of separation.

For more information or to schedule a consultation, give our office a call at 757-425-5200.