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What Types of Debt Are Divided in an Illinois Divorce?

Posted on in Divorce

Kane County divorce attorney debt division

A divorce often involves conflict, or at least extensive discussions, regarding the equitable division of marital property. It is understandable that you and your spouse will both have strong feelings about the assets that you want to retain, for both personal and financial reasons. However, as you engage in these conversations, it is important not to forget about the impact of marital debt on the proceedings. You will want to be sure that you are not left with more debt than you can handle, and that any debts remaining in your name are appropriately managed.

What Is Considered Marital Debt?

In Illinois, debts are treated much the same as assets when it comes to determining which are considered marital and non-marital. This means that a debt incurred by one of the parties before the marriage will likely remain separate, or the sole responsibility of that person, but a debt incurred by either or both parties during the marriage may be considered the joint responsibility of both partners. Along with marital property, these marital debts must be distributed equitably when the partners decide to get a divorce.

A couple may accumulate a variety of debts throughout their marriage, with some of the most common including:

  • Home mortgages - If there is still an outstanding mortgage on your home at the time of your divorce, the property can affect the division of both marital assets and debts. If one of the parties wishes to retain possession of the home after the divorce, he or she will likely need to be prepared to assume the full balance of the mortgage as well.

  • Credit card debt - Either party’s credit card purchases during the marriage can contribute to the overall amount of marital debt unless there is evidence that one party was using the card to dissipate marital assets. When a couple plans to divorce, it is often a good idea to pay off as much credit card debt as possible before the divorce is finalized.

  • Vehicle loans - In some cases, a car may be considered the sole property of one partner if it was purchased before the marriage or using non-marital assets. However, if the vehicle was purchased with marital assets, and especially if both spouses are listed as co-borrowers on the auto loan, then this debt will need to be considered as part of the equitable distribution.

  • Student debt - Many couples marry after completing their college education, in which case any student loan debt that either party brings to the marriage may be considered non-marital. However, if a person takes out loans to continue their education during the marriage, perhaps with the goal of increasing the family’s earning potential, this new debt will likely be considered marital.

Contact a Kane County Debt Division Attorney

If you are concerned about marital debt during the divorce process, the experienced St. Charles divorce lawyers at the Law Offices of Benedict Schwarz, II PC can help you understand your options, including paying off loans, refinancing, selling the property in question, or negotiating with your spouse for a fair resolution. Contact us today at 847-428-7725 to schedule an initial consultation.

 

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.thebalance.com/dealing-with-debt-during-divorce-960632

 

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