Debt in Divorce

Divorcing spouses have to 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 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 with 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 who is most responsible for the debt, the needs of the spouses, the length of the marriage, and spousal support and custody awards. In some situations, 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. Even if your divorce agreement has provisions to force your ex to pay, going to court to enforce them is expensive.

The process is complicated, so it pays to enlist the help 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. We offer a free consultation to discuss ways to make sure your debt ends when your marriage does.

Marital or Non-marital debt

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.

Type of Debt

In general, if you and your spouse have co-signed for debt during your marriage, the debt is the joint responsibility of both. Debt is 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 car, they usually also receive the debt associated with that asset, such as the car payment.

Credit card debt can become particularly complicated. If either spouse has a credit card when coming into the marriage, the balance on the card would be considered a separate debt. If one of you is just an additional cardholder on the spouse’s credit card, the debt will generally belong to the main cardholder. Purchases made on a credit card may be examined to see if they related to the marriage. If the cardholder spouse benefitted from the purchase alone, the debt would probably be classified as separate, but if both spouses benefited from the purchase, the debt would be considered as marital. If the card is a joint account, both spouses are still responsible for the debt, and if one fails to make payments, creditors will pursue the other.

By law, the cardholder owes the debt to the credit card company even if the other spouse is assigned the debt in the divorce. This could affect the cardholder’s credit rating if the other spouse fails to make required payments.

How To Protect Yourself

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:

Get a Copy of Your Credit Report. Make sure your credit status is good and that your spouse hasn’t run up debt and loans without your knowledge. Consider signing up for a credit fraud protection service to alert you to unknown activity.
Leave the marriage without any jointly-held debt. Try to pay marital debt before the divorce so that debts are not as big an issue in divorce determinations. If you can, work with your spouse to set a date after which agreed-upon portions of joint debt are to be transferred onto new cards in each person’s name and joint cards are to be canceled. Either pay off the joint cards together or divide the debt already on your joint cards between you and put the debt on the new cards. If you cannot agree, make a list of all joint credit cards and accounts and cancel them before the divorce to prevent your spouse from racking up more debt.
File documents with the courts stating the debt for both parties. Recording how much debt was held on the date the relationship ended helps prevent your spouse from running up debt that you might wind up responsible for later.
Keep good records of your own charges after your separation date, since that is when debt on credit cards becomes the responsibility of the spouse who made the purchases. Also, you want to be able to prove what is yours.
If your debt is overwhelming, you might be able to use joint savings or take a home equity line of credit in your home to help, or even consider filing for bankruptcy. It’s best to file for bankruptcy together to make sure that neither party gets stuck with the debt and that you discharge your debts before you start separate lives.

Debt in Divorce? Get Help Now – Free Consultation

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, it is most important to have an experienced divorce attorney on your side. 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 with an experienced and compassionate DuPage County divorce lawyer, call or contact us online.

Family Law Articles

Why Divorced Dads in Illinois See Less of Their Children

02.01.2019 / Child Custody

Illinois fathers are not getting enough time with their children. Although, officially, fathers are supposed to have more rights today than they had years ago when mothers were almost always granted primary custody of the children, in actuality Illinois dads see less of their children than dads in most other states. According to a new study … Continue reading Why Divorced Dads in Illinois See Less of Their Children
When Is It Healthier to Leave a Bad Marriage?

10.12.2018 / Divorce

What are the consequences of staying in a bad relationship longer than you should? While no one wants to go through a divorce, if your marriage is really on the rocks, new research shows that staying in a miserable marriage can actually be bad for your health, far worse than striking out on your own. … Continue reading When Is It Healthier to Leave a Bad Marriage?
What Happens to Debt When You Get Divorced?

29.10.2018 / Divorce

When couples divorce, who gets stuck with the debts run up during the marriage? Just as assets are shared in marriage, debts may be as well, so it has to be determined which party should be responsible for what debts. Sometimes, even if your spouse was the one who incurred the debt, you may still … Continue reading What Happens to Debt When You Get Divorced?
How Is Child Support Calculated in Illinois?

25.10.2018 / Child Support

When parents divorce in Illinois, child support is determined by a formula that changed on July 1, 2017, when Public Act 99-764 amended the Illinois Marriage and Dissolution of Marriage Act (IMDMA). Instead of the old method of relying on the net income of the non-custodial parent, there is now an income-share system that holds both … Continue reading How Is Child Support Calculated in Illinois?
Arguments in Favor of Prenuptial Agreements

01.10.2018 / Divorce

For those planning to tie the marital knot, there are a lot of things to consider, and making a prenuptial agreement should be right up there on your list. A prenup – a legal document that determines how assets will be divided and protected in the event of a divorce – is not only a … Continue reading Arguments in Favor of Prenuptial Agreements
How a Divorcing Couple’s Age Affects Asset Division

24.09.2018 / Divorce

While the U.S. divorce rate has been steadily decreasing since the 1980s, it has increased for couples over age 50. In fact, according to a Bowling Green State University study, the divorce rate for senior couples doubled between 1990 and 2010. One reason may be that people are living longer, and when looking at the best way … Continue reading How a Divorcing Couple’s Age Affects Asset Division
Study Estimates 13% of Divorces Caused by Student Loans

17.09.2018 / Divorce

Student loan debt, now at a record high of $1.5 trillion, has become a marriage killer. According to a June 2018 survey by Student Loan Hero and reported by CNBC, more than a third of borrowers said college loans and other money factors contributed to their divorce, and 13 percent of divorcees blame student loans … Continue reading Study Estimates 13% of Divorces Caused by Student Loans
Divorce “Tax Break” Will Soon Be Eliminated

03.09.2018 / Divorce

There is never a good time to get divorced, but if you have high assets, you probably will be best off getting one as fast as possible. The reason is the new Republican tax law, which will eliminate the tax break for alimony payments that are finalized or modified after Dec. 31, 2018. Agreements signed … Continue reading Divorce “Tax Break” Will Soon Be Eliminated
How Out-Of-State Moves Impact Custody

02.08.2018 / Child Custody

What do you do about custody and visitation when one divorced parent wants to relocate to another state? If the move involves a large distance, it can create major disruptions in the child’s life and the ability to spend time with the other parent. However, these issues can exist even if the move is within … Continue reading How Out-Of-State Moves Impact Custody
A Major Shortcoming of Child Psychiatric Care in Illinois

29.06.2018 / Family Law

Hundreds of children under the care of the Illinois Department of Children and Family Services (DCFS) are being held inside psychiatric hospitals for weeks or months, even though they have been cleared to leave. These children are supposed to be moved out of these hospitals to environments such as foster homes or residential treatment centers … Continue reading A Major Shortcoming of Child Psychiatric Care in Illinois

Recent Family Law Results

During trial four experts all testified against our client the Judge found it was in the best interest of the child that our client be awarded custody. We have successfully represented clients in numerous child custody cases.

Child Custody

We recently analyzed a case whereby the opposing side was seeking a substantial award of maintenance against our client. After a thorough review of the facts and circumstances and several hearings, our client’s obligation to pay maintenance was limited to two years at half of what his former spouse was seeking.

Alimony (Maintenance/Support)

After our client voluntarily changed employment we were able to obtain a substantial reduction in child support payments. We have also stopped such reductions when representing clients receiving child support.