I recently read a separation agreement that required the husband to pay spousal support and required the wife to make the payments on the car note for the vehicle she was going to keep. Both parties had signed the note and the lender will have the right to sue either or both of them if the payments are not kept up.
The husband has been making his spousal support payments. The wife, however, has not made the car payments.
To protect his credit, the husband has started making the car payments himself. He wants to subtract the car payment from his monthly spousal support payment It’s a common-sense solution to preserve the balance they agreed to.
In Virginia, so long as the agreement remains a private contract, the offset is ok. After the divorce is concluded and the final decree orders the parties to comply with the terms of their separation agreement, offsets become problematic. The final decree has converted the private agreement into a court order. Disobeying a court order is contempt and can be punished by time in jail or a fine.
In this case, both parties would be in contempt. The wife would be in contempt because she wasn’t paying the car note. The husband would be in contempt because he wasn’t paying the wife the amount specified in the agreement and ordered by the final decree.
To avoid this situation becoming a problem, I usually include a clause in the agreement that says if the party who took on the note fails to make a payment, the party paying support can make the payment and receive a dollar-for-dollar credit toward the support obligation for that month. This clause would have avoided the husband having to make both the car payment and the full spousal support payment until he files a contempt proceeding against the wife and either gets a court order allowing the offset or the parties agree to amend their agreement to permit the offset.
