How to Deal With Debt during Divorce
Divorce is always difficult, despite being very common, it is a very crucial time in one’s life. Moreover, there are certain issues that need to be resolved such as alimony, division of assets, child Support just to name a few, just to name a few. However, there is another issue which is quite uncommon yet and poses some serious issues during divorce: marital debt. This debt, unlike separate debts, remains the responsibility of both parties.
What qualifies as marital debt?
Most debts and liabilities that are accumulated by a couple after their marriage, but before filing for a divorce are divided equally between spouses. This rule may even apply if loan documentation only contains the name of a single spouse. Debts are generally treated as marital in nature but are not limited to include credit card loans, car loans, and mortgages. However, if these debts are incurred before commencement of a marriage, the spouse who took out the loan may be held responsible for paying it off.
Couples may also opt to enter into a debt together, however, they can categorize that debt as non-divisible in case of divorce by signing an agreement. This agreement may also work for inheritances or gifts received by a spouse during their marriage. When a court determines a debt as marital, then there are many options for splitting the amount of the debt. For example, the court may divide debt equally between spouses or they may split it by percentage deemed appropriate and fair. In case both parties are unable to pay off the amount of debt, then as per the courts orders, the property owned by the couple has to be sold to pay off the liability.
Rules applicable for credit card debts
In case of joint credit cards, the process is straightforward as this kind of debt is generally classified as marital debt. However, separate credit cards may require some consideration under the Illinois law. The balance may be classified as separate, but the court may also determine who the beneficiary of the purchases was. For instance, if entire family benefitted from the goods or services purchased through the credit card, then the debt may be classified as marital debt.
If you are seeking a divorce and have a marital debt, it can be highly beneficial for your case to hire an experienced divorce lawyer. An attorney can help you to protect your rights and minimize the amount that you may be held liable to pay off. If you wish to get more information on this subject or want to schedule a free consultation, contact Cesario & Walker at 630-920-8800.