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General Assembly Enacts Law to Clarify Classification of Debts

The General Assembly has passed HB-169, introduced by Delegate Bill Cleaveland of the 17th House District which encompasses much of the Roanoke Valley. This bill amends Virginia Code § 20-107.3 and provides that for purposes of equitable distribution in divorce actions, the court is required to classify debts of the parties as either marital or separate. The bill defines what constitutes a marital debt and a separate debt for purposes of classification and establishes how a party may rebut such a classification. This legislation was enacted is in response to the Virginia Supreme Court's decision in Gilliam v. McGrady, 279 Va. 703, 691 S.E.2d 797 (2010), wherein the Court held that under the statute debt incurred during the marriage is not presumed to be marital debt in Virginia's equitable distribution scheme. Governor Robert F. McDonnell signed the bill into law on March 26, 2011. It will take effect July 1, 2011.