Long after the paper have been signed, divorce can have a lasting impact on your personal finances. This is not just because of alimony, child support, or how your assets were divided, but also how your debts were divided during the divorce process. Division and assignment of debt will have a substantial effect on your financial health going forward after divorce. Get an attorney that understands just how impactful divorce can be on you, your family, and your financial future.
Is debt considered marital property?
Just like marital property is divided during divorce proceedings, so are marital debts. Generally, this means that any debts acquired during the marriage, with some exceptions, will be divided between the spouses. In Illinois, an equitable division state, marital debts, and property will be divided by the court in a way that is equitable and fair. Equitable does not mean equal, however. The court will consider a number of factors in deciding what would be a fair division of the marital debt, including:
- Personal finances of each spouse
- The ability of each spouse to pay back a loan or debt
- The role each spouse played in acquiring the debt
- Earning capacity of each spouse
- Duration of the marriage
How the assets are to be divided will also be a significant factor to consider when marital debt is divided. A court may assign one party a particular debt to offset the assignment of a marital asset. The goal is that the overall division of marital assets and debt, viewed together, come out to be fair.
This is how marital debt will be divided if you and your spouse cannot come to an agreement on how marital debt and assets should be divided. You always have the option of working with your spouse to come to a mutually acceptable arrangement regarding division. This agreement may divide your debt 50-50. It may have one of you paying off the bulk of the marital debt in exchange for certain extra assets. You may also agree to sell off assets in order to pay off the marital debt.
Remember that, no matter how debts are assigned in the divorce decree, it is not binding on third-party creditors. This means that, regardless of the divorce decree, you will remain individually liable for the marital debt. If a debt is assigned to your former spouse and they fail to make the requisite payments, the creditor can still go after you for payment.
Standing by Your Side Throughout Divorce Proceedings
Divorce is difficult. Even the most agreeable divorces can be a struggle to get through. M&A Law Firm, P.C. provides legal counsel you can depend on during this difficult time. We proudly serve Cook County and Schaumburg, Illinois. If you need assistance with your divorce, contact us today.
