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Managing debt during and after a divorce

On Behalf of | Sep 30, 2019 | Property Division |

Most Virginia residents are aware that lot of attention is commonly given to how assets will be split when a couple gets divorced. This is certainly understandable as the need to sell a house, move out of a family home, give up half of a retirement account or other experiences can be hard to accept. The process can even leave some people concerned about how they will live on their new single-earner income if they had previously enjoyed a lifestyle supported by two incomes. These concerns can grow when a person ends up taking on some of the couple’s joint debt as well.

The property division aspect of a divorce must address a couple’s debts as well as the couple’s assets. Exactly which spouse ends up being responsible for which debt can vary based on a variety of factors. As explained by SoFi, the official date on which the couple separated may well play an important role in determining when any joint debt ceases to be accrued. This will help to determine what debts must be split and what debts are to be considered the sole responsibility of one of the spouses.

Debts that are deemed to be shared or marital property may or may not be split evenly between the couple. The decisions regarding how assets are split may play into how debts are divided. One of the most important things people should aim for is to leave their marriage with no joint debt remaining.

Money Management International indicates the reason for this is that creditors are not bound by the terms of a divorce decree so they can pursue either person for repayment regardless of the terms of the settlement.