Divorce is a challenging process, and the division of assets and debts can add complexity to an already emotional situation. If you’re worried about how your debts will be handled, you’re not alone. Today, many married couples face significantly larger financial obligations than ever. In fact, according to Experian, the average married couple has $112,627 in debt.
At SLG Family Law, we’ve been helping people navigate the complexities of divorce for many years, and we’ve seen firsthand how debt division can impact individuals and families. In this article, we’ll discuss how debt is split in a divorce and what factors may influence the outcome.
Before we discuss how debts are divided, it’s important to understand the distinction between marital debt and separate debt:
Distinguishing between these two categories is pivotal, as marital debts are subject to division during a divorce, while separate debts remain the sole responsibility of the individual who incurred them.
When it comes to dividing debts, Illinois follows an equitable division framework. This does not mean a 50/50 split—it means debts (and assets) are divided fairly based on several factors. Here’s how the process works:
The court first determines which debts are marital and which are separate. Here are some examples of common marital assets:
Illinois courts consider each spouse’s financial contributions to both assets and debts. For example, if one spouse supported the other while they pursued higher education, the resulting student loans might be factored into the division process as marital debt.
The court evaluates the financial standing of each spouse to ensure the debt division is equitable. Factors like individual income, earning potential, and existing assets or liabilities are taken into account.
If one spouse has been irresponsible with marital funds—such as excessive spending or hiding money—the court may adjust the division of debts to account for this. Illinois courts frown upon the dissipation of marital assets and may assign a greater share of debt to the at-fault party.
Dealing with shared debts during a divorce can feel overwhelming, but taking proactive steps can simplify the process and protect your financial future. Here are some actionable tips to consider:
While emotions may run high, open communication about shared debts is essential. Knowing what liabilities exist will help you plan and negotiate more effectively.
Gather all financial records, including credit card statements, loan agreements, and mortgage documents. Having accurate and comprehensive documentation ensures transparency and helps the court make an informed decision.
If possible, close or freeze joint credit card accounts and lines of credit to prevent additional debt accumulation. This protects both parties from irresponsible spending during the divorce process.
If you and your spouse can agree, consider paying off smaller debts before finalizing the divorce. This simplifies the overall division process and can save both parties from dealing with post-divorce creditor issues.
Dividing debts during a divorce is complex. Consult with experienced family law attorneys, like the team at SLG Family Law, to help you understand Illinois debt division laws and ensure a fair outcome. You may also consider working with a financial advisor to plan for your post-divorce financial future.
Request a copy of your credit report to identify all outstanding debts and ensure there are no surprises. This step will also help you monitor any joint accounts that need to be closed or refinanced under one party’s name.
A fair division of marital debts sets the foundation for your financial future after divorce. When handled poorly, shared debts can lead to ongoing disputes and creditor issues, even after the court finalizes your divorce. By understanding your rights and taking measured steps, you can emerge from the divorce process with clarity and control over your finances.
Remember, Illinois courts aim to divide debts equitably rather than equally. If you’re unsure where you stand, consulting a knowledgeable attorney is the best way to protect your rights and interests.
At SLG Family Law, we understand how overwhelming divorce can be, especially when financial matters are involved. Our skilled attorneys are adept in debt division in Illinois and can help you navigate this complex process with confidence. Contact us today for a personalized consultation and start building a secure, debt-conscious future.
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