In the commonwealth of Virginia, spouses are jointly liable for their marital debts and remain jointly liable if they divorce. Similar to the majority of other jurisdictions, the commonwealth is an equitable distribution jurisdiction. In equitable distribution states, all marital property is jointly owned. Similarly, all marital debts are equitably divided between spouses. If spouses cannot agree upon a mutually acceptable settlement agreement allocating their assets and liabilities between them, Virginia courts will allocate their property and debts for them.
Spousal Credit Cards
Individual liability after separation or divorce for a joint credit card depends on whether the account was initially created as a joint account. If the account is truly a joint account, then both spouses remain jointly liable for repaying the outstanding balance on the account. Moreover, each spouse remains individually liable for repayment of the debt. In other words, a credit card company can sue both spouses jointly or sue each spouse separately for any remaining balance. However, if the account was not created as a joint account but as an individual account with authorized users, then the account is not a joint account but instead, a personal account. Individual spouses remain individually liable for repaying debts incurred by authorized users.
Equitable Distribution
In equitable distribution states, property and debts divide equitably between divorcing spouses. However, in community property jurisdictions, community property, including marital debts, is typically divided equally. In equitable property jurisdictions, such as Virginia, courts can divide property and debts equitably and not necessarily equally. Although Virginia courts encourage spouses to enter into written property settlement agreements without judicial intervention, spouses who are unable to agree upon settlement terms must ask a circuit court to allocate their debts and property for them. Virginia law allows judges the discretion to divide debts unequally in the interests of justice.
Divorce and Debt
Since Virginia is an equitable distribution state, Virginia courts may require one spouse to pay a greater portion of the outstanding credit card debt if she was primarily responsible for incurring the debt. If one spouse purchased an item using the joint credit card over the objection of the other spouse, Virginia law allows its judges to assign the responsibility to repay that debt to the other spouse. However, in equitable distribution jurisdictions, separate property and debts remain separate, and the spouse who owned the card prior to marriage is separately responsible for repayment.
Credit Card Companies and Divorce Agreements
Property settlement agreements and divorce decrees are between the individual divorcing spouses. Credit card companies who were not parties to those divorce agreements are not obligated to comply with the terms of those agreements. As such, a credit card company can sue each spouse individually for the repayment of the joint debt. However, spouses can sue one another for repayment if they entered into enforceable agreements and obtained valid judgments requiring repayment by one spouse.
Considerations
Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.
0 comments:
Post a Comment