This decision increases the burden on a spouse claiming that a debt in their name alone was incurred for a marital purpose (i.e. a credit card that was used to buy groceries for the family).   Attorneys must pay additional attention to the factors set forth in Virginia Code § 20-107.3(E) and develop their arguments accordingly to meet this burden.

Time will tell just how stringently the trial court wish to apply this revised standard when apportioning debts during equitable distribution.  It is possible that the legislature will amend the statute to authorize a presumption with regards to “marital debts” as already provided for with respect to “marital assets”.  Until we get a better feel from the courts or clarification from our legislatures the best course of action, as always, is to be prepared for the worst while hoping for the best.  Brian Moore

1. (i) to compel a spouse to pay any sums necessary for the maintenance and support of the petitioning spouse, including (a) an order that the other spouse provide health care coverage for the petitioning spouse, unless it is shown that such coverage cannot be obtained, or (b) an order that a party pay secured or unsecured debts incurred jointly or by either party,
2. (ii) to enable such spouse to carry on the suit,
3. (iii) to prevent either spouse from imposing any restraint on the personal liberty of the other spouse,
4. (iv) to provide for the custody and maintenance of the minor children of the parties, including an order that either party or both parties provide health care coverage or cash medical support, or both, for the children,
5. (v) to provide support, calculated in accordance with § 20-108.2, for any child of the parties to whom a duty of support is owed and to continue to support any child over the age of 18 who meets the requirements set forth in subsection C of § 20-124.2,
6. (vi) for the exclusive use and possession of the family residence during the pendency of the suit,
7. (vii) to preserve the estate of either spouse, so that it be forthcoming to meet any decree which may be made in the suit, or
8. (viii) to compel either spouse to give security to abide such decree.

It should be noted Virginia Code 20-103(E) provides that Pendente Lite orders ” have no presumptive effect and shall not be determinative when adjudicating the underlying cause“.

Brian Moore

The new version of 20-107.3 adds quite a bit of new text in an effort to clarify matters and respond to Gilliam.

20-107.3(A) was amended by adding the language I have underlined and italicized:
A. Upon decreeing the dissolution of a marriage, and also upon decreeing a divorce from the bond of matrimony, or upon the filing with the court as provided in subsection J of a certified copy of a final divorce decree obtained without the Commonwealth, the court, upon request of either party, (i) shall determine the legal title as between the parties, and the ownership and value of all property, real or personal, tangible or intangible, of the parties and shall consider which of such property is separate property, which is marital property, and which is part separate and part marital property in accordance with subdivision A 3 and (ii) shall determine the nature of all debts of the parties, or either of them, and shall consider which of such debts is separate debt and which is marital debt. The court shall determine the value of any such property as of the date of the evidentiary hearing on the evaluation issue. The court shall determine the amount of any such debt as of the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent, and the extent to which such debt has increased or decreased from the date of separation until the date of the evidentiary hearing. Upon motion of either party made no less than 21 days before the evidentiary hearing the court may, for good cause shown, in order to attain the ends of justice, order that a different valuation date be used. The court, on the motion of either party, may retain jurisdiction in the final decree of divorce to adjudicate the remedy provided by this section when the court determines that such action is clearly necessary, and all decrees heretofore entered retaining such jurisdiction are validated.

Sections 107.3-4(A)(4) and (A)(5) were added.  Here is the new text:
(A)(4)

4. Separate debt is (i) all debt incurred by either party before the marriage, (ii) all debt incurred by either party after the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent, and (iii) that part of any debt classified as separate pursuant to subdivision A 5. However, to the extent that a party can show by a preponderance of the evidence that the debt was incurred for the benefit of the marriage or family, the court may designate the debt as marital.

(A)(5)

5. Marital debt is (i) all debt incurred in the joint names of the parties before the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent, whether incurred before or after the date of the marriage, and (ii) all debt incurred in either party’s name after the date of the marriage and before the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent. However, to the extent that a party can show by a preponderance of the evidence that the debt, or a portion thereof, was incurred, or the proceeds secured by incurring the debt were used, in whole or in part, for a nonmarital purpose, the court may designate the entire debt as separate or a portion of the debt as marital and a portion of the debt as separate.

Virginia Code 20-107.3(C) was amended by adding the follwoing text that I have underlined and italicized:

C. Except as provided in subsection G, the court shall have no authority to order the division or transfer of separate property or marital property, or separate or marital debt, which is not jointly owned or owed. The court may, based upon the factors listed in subsection E, divide or transfer or order the division or transfer, or both, of jointly owned marital property, jointly owed marital debt, or any part thereof. The court shall also have the authority to apportion and order the payment of the debts of the parties, or either of them, that are incurred prior to the dissolution of the marriage, based upon the factors listed in subsection E.

Lets hope these changes help to clarify what be a very, highly-litigated, and complex process!

Brian Moore