Financial issues are a major contributor to divorce and difficult to sort out during and after the divorce process, so it’s no wonder that the question of “who pays the debt in divorce?” is a common one for attorneys. Divorcing spouses must not only split their assets, they must also split the debt they have run up together during their marriage. Illinois has rules for assigning responsibility for debts between divorcing spouses, and it’s important to know what your rights are and to handle debts correctly so they don’t continue to haunt you even after your divorce is finalized.
The courts decide how to divide marital debts just as they do marital assets. Since Illinois is an equitable distribution state, debt is not necessarily split 50/50. Instead, courts will split debts in a manner considered to be fair and equitable after considering factors such as:
These factors may help you understand who pays debt in a divorce. Depending on the circumstances, there are some situations where one spouse may wind up with more debt and receive other marital assets to make the financial picture more equitable.
Unfortunately, just because debt is assigned to your ex-spouse, it doesn’t mean that you will never be responsible. In Illinois, creditors are not required by law to follow the judge’s orders, so should your ex stop making payments on joint debt, the creditors can try to collect from you. If your debt was held jointly, you may wind up responsible for the debt plus interest and penalties. This is a situation you want to avoid. Even if your divorce agreement has provisions to force your ex to pay, going to court to enforce them is expensive.
The laws under the Illinois Marriage and Dissolution of Marriage Act and the process of dividing debt in a divorce equitably are complicated, and making mistakes can be costly, so it can be helpful for divorcing spouses to enlist the services of an experienced divorce attorney. The experienced and compassionate Illinois family-law attorneys at Wolfe & Stec, Ltd. understand that divorce is difficult enough without having to worry about debts, especially those run up by your ex-spouse. We can provide professional guidance to examine your situation and provide specific strategies to protect you and your children from being haunted by debt.
We offer a free consultation to discuss how our attorneys handle divorce cases and find ways to make sure your debt ends when your marriage does.
There are many lawyers out there, and it’s important for you to find one you feel comfortable with and who also has the knowledge of Illinois divorce laws and the experience to make sure everything is done properly so you do not have to be blindsided with additional problems and costs. Here are some reasons why we believe it makes sense to choose our Wolfe & Stec, Ltd. divorce attorneys:
At Wolfe & Stec, we are ready to examine your individual situation to determine the best way to help. Our track record shows that we make a difference for our clients, but we know that your case is unique.
The Illinois divorce attorneys at Wolfe & Stec, Ltd., understand how difficult it is for a family to be splintered by divorce, and we know that financial issues such as being stuck with debts you do not deserve make it even tougher. When you have us on your side, we will take the burdens off you by handling all legal aspects of your case so you can focus on rebuilding your life and that of your family. We will:
Problems with debt in divorce can get worse if they are not taken care of promptly — for example, if one spouse keeps running up debt by making purchases on a joint credit card. Our divorce attorneys will take immediate action to make sure you are protected, so call us today.
Illinois courts consider many factors in deciding how to split and handle debt in an equitable manner in divorce. In general, if your debt was taken on at some point throughout the marriage, it is considered shared joint debt and will be split between you and your ex. Illinois law (750 ILCS 503) states that divorce courts “shall divide the property without regard to marital misconduct in just proportions” and defines marital property as “all property, including debts and other obligations, acquired by either spouse subsequent to the marriage.”
This means that the law divides only property and debts that were acquired during the marriage. If either you or your ex came into the marriage with debt, that debt would still be that person’s responsibility. Courts will also consider who is most responsible for the debt incurred; if one spouse is awarded an asset that has debt associated with it, such as a car with a loan, that spouse will most likely be responsible for making the payments.
The following are some considerations of the courts when splitting debt in divorce:
In Illinois, debts are classified as “marital” or “separate, or non-marital.” Marital debt includes most debts incurred during the marriage and before the date of separation — regardless of which spouse’s name is on the debt — and these are shared debts that the courts will divide. Debt that either spouse incurred before the marriage is considered non-marital and remains their own personal responsibility.
In general, if you and your spouse have co-signed for debt during your marriage, the debt is the joint responsibility of both. These types of debt are most often incurred from loans, such as mortgage and vehicle loans, joint accounts, and credit cards. Credit cards and loans that were opened before marriage and are in only one spouse’s name are personal debt; those that were opened by the couple are marital debt.
The courts may balance out debt through distribution of assets. If one spouse receives a particular asset, such as a house, they usually also receive the debt associated with that asset, such as the mortgage payment.
Practicality is also a consideration in splitting debt. However, because the couple’s assets are divided equitably, the court will often try to balance assets with debts so neither spouse completes the process facing a debt burden that cannot be handled. Debts are often awarded to the person who can pay them, as it would make no sense to drive the spouse with limited income into bankruptcy by burdening them with unpayable debts. Often, if one spouse receives a larger portion of the couple’s assets, that spouse may also be given a larger portion of their debts.
Determining who is responsible for credit card debt after a divorce can become particularly complicated. Some divorcing spouses run up bills on joint credit cards or those that are in their spouse’s name before their partner is aware of it; and there are times when even if your spouse was the one who incurred the credit card debt, you may be held responsible. In addition, creditors may be able to go after you for debts held jointly if your former spouse doesn’t pay.
The following are some considerations when it comes to determining responsibility for credit card debt in a divorce:
Don’t delay getting legal help to prevent problems such as having your spouse get you deeper into debt.
Our Wolfe & Stec attorneys are aware of the tactics that some divorcing spouses use to avoid responsibility for their debts, and we will take all steps necessary to protect our clients.
It’s always best if you and your spouse can work together to eliminate debt before your divorce, but it is not always possible to do so. Taking the following steps can help:
Every divorce is unique, as financial situations, personal property and circumstances differ, and children may be involved. Some couples can work out their debt differences amiably; others fight a bitter war to the end and wind up having a difficult, expensive, and drawn-out contested courtroom proceeding.
Since divorce is so complex and emotionally sensitive and your family’s future is at stake, it is important to have an experienced divorce attorney on your side to provide legal guidance. The skilled Illinois family law attorneys at Wolfe & Stec, Ltd. have helped countless families dealing with divorce. We will fight to protect your spousal rights and assets and guide you through each step of the divorce and post-divorce period.
For a free initial consultation to discuss splitting the debt in your divorce, call our team. Call us at 630-305-0222 today and speak with an experienced and compassionate DuPage County divorce lawyer.
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