Dividing Debt During Divorce

Dividing Debt During Divorce

Most couples go into divorce proceedings expecting to grapple with issues like child custody, alimony, and dividing assets, but many are surprised to learn that both assets and debts must be divided upon divorce. When determining which parties are responsible for certain debts, courts generally enter into the same analysis as required when deciding how assets will be divided. This means that most debts acquired during a marriage will be considered marital and so will need to be divided equitably, while debts incurred by one spouse before the marriage took place will remain that person’s responsibility.

How debt is divided depends on each party’s specific circumstances, making it especially important for those who are going through a divorce and who are concerned about being held responsible for the other party’s debts, to speak with an experienced Rolling Meadows divorce attorney who can advocate on their behalf.

What Qualifies as Marital Debt?

Like marital property, most debts incurred by a couple during the course of their marriage, but before filing for divorce must be divided equitably when the marriage is dissolved. This is true regardless of whether one or both spouse’s names are actually listed on related documentation. Debts that have regularly been deemed to be marital in nature include:

• Mortgages;
• Credit card debt;
• Student loans; and
• Car loans.

However, if any of these types of debts are incurred before a marriage actually took place, the spouse who charged the debt can expect to be held responsible for paying it off after the divorce is finalized. In fact, married couples can actually enter into a debt together, but by signing an agreement, can categorize that debt as non-marital and so non-divisible. This also applies to agreements regarding debts attached to gifts or inheritances received by one party during a marriage, such as the mortgage on an inherited house.

Credit Card Debt

Like any other type of debt, charges made to a credit card during a marriage are usually classified as marital debt. Illinois courts, however, have been willing to make exceptions in cases where the purchases were made on a card that is only in one spouse’s name. In these situations, courts will usually require the cardholder to pay off the debt, unless there is evidence that the couple, or the family as a whole, benefited from the purchases.

Methods of Dividing Debt

Once debt has been deemed “marital,” courts have several options for dividing it. For instance, in some cases, courts split the debt equally between both parties, while others decide to use the debt to offset a valuable asset that is awarded to one of the spouses. In the event that neither spouse can afford to pay off a debt that is attached to an asset, courts can order the parties to sell the property and then pay off the remaining liability.

Get Legal Advice Today

If you are considering filing for divorce, please call 847-255-9925 to speak with one of the dedicated and compassionate Rolling Meadows divorce attorneys at the SAM LAW OFFICE LLC.