How Is Debt Divided In Illinois Divorce?

Dealing with debt can be tricky in an Illinois divorce. Arguments over who keeps the house, cars, and savings accounts can lead to trouble when assets are divided. This is why many divorcing couples hire Naperville debt division lawyers to decide who gets what. Keller Legal Services can help with asset and debt division during your divorce.

Assets and Debts Are Divided Equitably

In Illinois, your assets and debts are divided equitably during divorce. What does this mean? Rather than a 50/50 split, the assets and debts are divided between the spouses according to their needs and contributions to the marriage.

Who Is Responsible For The Debt?

When dividing marital assets and debts, Illinois has an equitable distribution rule. This means each partner receives a ‘fair’ amount of marital property and debts. If the matter is left to the family court judge to decide what is ‘fair,’ she will use several factors to make this determination, including:

  • How long the marriage was
  • The current and future financial potential of each partner
  • Why the debt was incurred
  • Whether the property is related to the debt, such as a car or house
  • Any adultery or other marital misconduct that was a factor in the divorce

Marital vs. Non-Marital Debt

The first part of the debt equation is determining which debts are part of the marital estate and yours alone. The Illinois Marriage and Dissolution of Marriage (IMDMA) states that any assets or debts acquired from the day you were married until you were divorced are part of the marital estate. Therefore, if you acquired the debt before marriage, it will be considered only your debt. Some of the debts that may be part of the marital estate are

  • Car loans
  • Credit card and personal loan debt
  • Mortgages
  • Student debt
  • Medical debt

If you are concerned about marital debt before a divorce, it helps to try to reduce debt before formally starting the divorce process. First, work with your partner to pay down credit cards and talk to them about how you plan to reduce other debts. For example, some couples sell their home and split the equity to pay down credit card debt. Others transfer part of the marital personal loan debt to another bank account, so there is one less legal issue to consider during the divorce.

Can A Creditor Come After You For A Spouse’s Debts?

Yes. In Illinois, creditors can pursue you to repay your ex-spouse’s debts. This does not sound fair, but they can do so under state law. Even if the debts were assigned to you after the divorce, you are still responsible for joint debts.

What Happens If Your Spouse Hid Debt?

In a union where one spouse handles the finances, it is common for there to be debt the other was unaware of. While you can be held liable for the marital debt, your debt division lawyers could argue that hidden debt should be assigned to your ex. Speak to your lawyer if you discover debts from the marriage you did not know about. It may be possible to show that your ex took out the debt without telling you. Also, your ex-spouse may have run up credit card debt on unnecessary expenses that did not benefit the marriage.

The judge may see that you did not know about how your spouse hid debt. In this case, she could provide you with more marital assets or alimony payments to account for your additional debt payments. Remember that proving that you were not involved in running up excessive credit card debt in the marriage is challenging. This is where having a seasoned Naperville debt division attorney can pay large dividends.

What About Prenuptial And Postnuptial Agreements On Debt?

Sometimes both parties agree that certain obligations that should be marital debts will be considered non-marital debts owned by one partner. This can be done with a prenuptial or postnuptial agreement.

A prenuptial agreement is a legal, financial agreement done before marriage. A postnuptial agreement does the same as a prenup but is done after the marriage. Both agreements are allowed under Illinois law and can detail how debt will be divided in a divorce.

These agreements are binding legal contracts, so they must be done properly to divide debt correctly. First, the prenuptial or postnuptial agreement has to be in writing and signed by both parties. More than having an oral understanding is required. The judge also may invalidate a prenuptial or postnuptial agreement if there are signs of fraud, unconscionability, or duress.

Regarding unconscionability, the judge may invalidate the debt division if the agreement is extremely one-sided. Note that this dovetails with Illinois’ principle of equitably dividing marital assets and debts. However, the judge will not necessarily invalidate the debt division because one has more marital debt than the other. If you are arguing unconscionability, you have the burden of proof.

Consider Legal Separation To Shield From Spousal Debt

Are you worried about your spouse running up debt during the separation or divorce? This is a common concern, but there is a legal solution. You can protect yourself from this by obtaining a legal separation. Living apart from your spouse is different than having a legal separation. When you are legally separated, any debts they run up are deemed non-marital debts.

Legal separation can also be helpful if you are concerned about how your spouse spends money. However, legal separation in Illinois does not end the marriage but provides you with legal protections.

Speak To A Naperville Debt Division Lawyer Now

There are many legal and financial considerations during a divorce. One of the most common problems is dividing marital property and debts. You need a Naperville debt division lawyer fighting for your rights when there is so much on the line. You could have a smaller debt bill after your divorce with the proper legal assistance. The attorneys at Keller Legal Services can help you, so please contact our Naperville debt division lawyers today for a complimentary consultation about your debt division matter.