Many couples who are considering divorce may have credit card debt or other debts incurred during the marriage that must be split up just as you would divide marital assets. When starting a divorce process, your attorney will ask for information detailing what you own and what you owe, your incomes and cost of living, and any other pertinent financial information in order to split up debts at divorce. Once a clear picture develops of what marital debt must be split up, there are a number of options you may consider to tackle how to split up your debt.
- One option is for you and your spouse to sell joint property such as your home or car and pay off your marital debts, providing a clean slate when you go your separate ways.
- When there is no property to sell in order to pay off marital debt, some spouses may just agree to split the debt, chipping away at balances that may be in both your names post-divorce. Of course, this arrangement may leave one or both spouses feeling uneasy about whether the other spouse will follow through with timely payments – the failure to do so could have a negative impact on your credit for years to come.
- If you cannot sell property to pay off your marital debt and you do not feel comfortable sharing payments for debt still in your name, one spouse might agree to pay the all or most of the debts in exchange for a greater share of the marital property or more alimony and vice versa. This way, the spouse assuming responsibility can rest assured that the debts get paid on time and are compensated in marital property before the divorce is finalized.
The first option is the least risky given that any time you’re connected to someone financially, you are at risk. Especially when that someone is an ex-spouse. If your spouse fails to make timely payments or is unable to make payments due to job loss or disability, for example, you will suffer the consequences for debt that is in both your names despite a court order saying your spouse is the responsible party. Many advise that, when at all possible, sell joint property to tackle debt or at least split debt along party lines – you take on the debt in your name and your spouse takes the debt in his or her name while paying off what is in both your names asap.
If you and your spouse find that your debts and liabilities outweigh your assets and income, it is in your interests to work with an attorney or financial adviser who can provide you with a candid assessment. Perhaps you and your spouse might want to explore bankruptcy protection, individually or jointly, before you divorce or after your divorce depending on the unique circumstances of your case.
Do You Have Questions on How to Split Up Debt in an Illinois Divorce?
Contact Experienced Lake County Family Law Attorney for Answers
If you have questions regarding how to split up your marital debt in an Illinois divorce, contact the Lake county Family Law Offices of Ronald L Bell & Associates for assistance today at 847-495-6000.