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Understanding Debt Division During Divorce in Illinois

Posted on in Division of Assets

debt, debt division, Illinois family law attorney

Many couples consider drafting prenuptial agreements that cover the division of marital assets, and property or income that each spouse owned separately before the marriage, but few consider what will happen to any collective debt as a couple, if they decide to divorce. This can present a tricky situation for both parties, as some obligations can be on shared accounts, or may have benefited both parties in a way that both would be responsible for paying off the debt following a divorce.

One of the best ways for a couple to handle debt if they are planning on getting a divorce is to pay off or resolve the debt before filing to have their marriage ended. However, it can be difficult for both sides to come to an agreement on what their fair share of the debt should be. If a family court has to decide how to divide the debt, it will use the state’s guidelines for equitable distribution in order to decide how much debt each party will be responsible for after the divorce. These guidelines do not simply divide the debt down the middle and give half to each party, and the outcome can sometimes be less than favorable for one of the parties.

Marital Consumer Debt

If the debt is from credit cards and consumer purchases, it can be especially difficult to decide who will take responsibility for the payments following the divorce. To make things even more complicated, regardless of who is responsible for making the payments, if the debt is on a credit card that was shared during the marriage, then both parties are still equally responsible to the credit card company, regardless of their marital status. This means that if the party responsible for making payments is unable to meet his or her obligations, the credit card company will seek payment from the other party.

Dividing Debt or Liquidating Assets?

Debts that were shared by both parties during the marriage are classified as marital debts, and can be split between both parties. If one spouse made a purchase, but the purchase was for the family, this too can be classified as marital debt. Similarly, if one spouse made a purchase on a card held in their name that clearly benefited the spouse, that debt can be transferred over to the spouse who received the most benefit from the purchase. In cases where neither party can afford an asset individually, and are unable to refinance their debt in order to make payments possible, the court can order the parties to liquidate assets in order to sever financial ties.

Debt presents a serious set of obstacles when considering a divorce. Deciding which party will be responsible for payments is rarely straightforward, and the system that the courts have in place in order to make those decisions often comes to conclusions that are less than ideal. To be certain that you do not find yourself in a situation where debt accumulated during your marriage is not unfairly assigned to you after your divorce, it is important to have a complimentary consultation with a divorce attorney in Naperville, IL, who understands how to manage the complex issues involved in divorce proceedings. Please contact Pesce Law Group, P.C. at 630-352-2240 today to schedule your consultation.

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