Tag Archives: divorce property division

Who Is Responsible for Marital Debt in an Illinois Divorce?

shutterstock_562619533Many couples fight about finances throughout the course of their marriage. Money issues and especially debt can wreak havoc on a marriage, and in many cases, financial concerns can be a significant factor in the decision to get a divorce. Sometimes, one spouse will rack up huge amounts of credit card debt without the other spouse even knowing. Divorcing couples may wonder what will happen if one or both spouses have incurred a large amount of debt. Illinois divorce laws allow for equitable distribution of marital property, and this includes the division of debts. However, exactly how marital debt is to be divided depends on each situation, since every divorce is unique.

Marital Assets and Debts

Marital debt refers to any debts that a couple accumulates while they are married. These debts may include a mortgage, credit cards, vehicle loans, and student loans. During divorce, marital debts will be divided between the spouses according to Illinois’ equitable distribution laws. Credit cards, even if they are only in one spouse’s name, are still considered marital debt that the court will divide.

The court will review several factors to determine which spouse should be responsible for certain debts. For example, one spouse may have been the primary “breadwinner” of the family, and if they earn a higher salary, they may be better able to pay debts. On the other hand, if one spouse has been a stay-at-home parent for many years, they may have a lower income-earning potential after the divorce, and large amounts of debt could be financially crippling for them.
In general, marital debt is subject to equitable division, just like assets. In order to be as “equitable” as possible, one spouse may take on more of the marital debt, but in return, they may receive more marital assets to make up the difference. However, even if a portion of the debt is assigned to one spouse, they may choose not to make payments on it. Creditors are not legally obligated to follow a judge’s orders in a divorce case, and they may begin the collections process against either spouse. This means one spouse can be held responsible for any jointly held debt, such as a loan or credit card that they co-signed with the other spouse. Interest and penalties may apply to this debt as well. In order to avoid the possibility of one spouse being held responsible for the other’s debts, spouses should ensure that one spouse is removed from any joint accounts.

Taking Responsibility

Ideally, with the help of their respective attorneys or through mediation, divorcing spouses can work out an agreement on how to divide their marital debt. Options may include continuing to share the debt or dividing the debts so each partner takes responsibility for their own debts. In these cases, the spouses will not need to come up with a large sum of money to pay off the debts immediately. However, this can also be somewhat risky, since a person’s credit score may be negatively affected if the other party decides not to or is unable to pay off his or her share of the debts. Ultimately, the best option is to simply pay off any outstanding debts prior to completing the divorce. This method may be challenging, but it provides benefits in the long run by allowing both parties to start their new lives debt-free.

Contact a Wheaton, IL Division of Marital Debt Attorney

Amassing a large amount of debt can weigh heavily on someone, especially during a divorce. In Illinois, marital debt is considered marital property and therefore subject to division. If you are concerned about what will happen to you and your spouse’s debt post-divorce, a knowledgeable DuPage County divorce lawyer at the Andrew Cores Family Law Group will advise you on the best way to reach a positive resolution. To schedule a free consultation, call 630-871-1002 today.

Sources:

http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K503

What Should I Include in My Divorce Planning Checklist?

DuPage County family law attorney divorce preparationThinking about the end of your can be emotional and intimidating, due to a fear of the unknown and what comes after the dust settles. In many divorce cases, a couple may have experienced problems in their relationship for a while, which ultimately led to the decision to separate. If it seems like divorce may be on the horizon, planning ahead can benefit you in the long run, especially considering all the decisions that need to be made.

During the planning process, it helps to document everything, from bank statements to credit card receipts. This ensures you will have proof if any aspects of your divorce are contested and you have to fight out the details in court. It is also a good idea to seek legal counsel to ensure you so you are protected both legally and financially.

Steps for Planning Ahead

Before filing for divorce, you should think about where you will live and what your income and expenses will be post-separation. It is imperative to take inventory of your shared financial affairs, including investments and insurance policies, as well as other assets like houses, vehicles, and more. Make photocopies of deeds, insurance policies, and other financial documents. You should also write down all the account numbers for banks accounts, investment and retirement accounts, credit cards, and car loans. This way, you will know what you are entitled to as your share of the marital assets.

Divorce can be expensive. Start saving money as soon as possible to ensure that you will have enough to cover the legal fees. You should also know the costs of moving and what your new rent or mortgage will be at a new residence. You want to avoid accepting a divorce settlement that does not provide you with the financial resources you deserve just because you are desperate. It might also be helpful to speak to a financial advisor who can recommend the best financial strategy to fit your needs moving forward.

If you move out of the marital home, it is smart to get a post office box to ensure that you do not miss any important mail, especially if you receive checks or time-sensitive legal documents to sign. You will likely want to set up your own email address for privacy reasons if you shared one with your spouse during the marriage.

When a divorce includes children, you need to arrange a time and a place when you will tell the children you are divorcing. You should try to use appropriate language the kids will understand, while reassuring them that you both still love them and the divorce is not their fault. It is also never too early to figure out how you are going to raise them as divorced parents. That includes working out child custody and parenting time arrangements that are agreeable to everyone while protecting the best interests of the children.

Contact a Wheaton Divorce Attorney

Going through a divorce can be difficult, and you do not want to make any hasty decisions or mistakes that could cost you in the end. Our DuPage County divorce lawyers will guide you through the steps of the divorce process, ensuring that you consider everything that could impact your future, especially financial matters. Contact the Andrew Cores Family Law Group at 630-871-1002 to schedule a free consultation.

Sources: https://www.investopedia.com/articles/personal-finance/093015/divorce-planning-checklist-what-you-need-know.asp