How Does the Court Divide Debt During an Illinois Divorce?

 Posted on October 07, 2019 in Illinois Divorce

A dissolution of marriage can be a difficult decision for a couple. Making drastic changes on your own can present more challenges than one would expect. Concerns related to your home, assets, businesses, and pensions are all worrisome topics that come to mind. Most concerning for many individuals facing a divorce, however, is the dispersion of debt between you and your ex. The state of Illinois recommends that a divorcing couple works together in order to divide their debts equally, however, decisions will be made by the judge if an agreement cannot be reached.      

Marital Debt vs. Non-Marital Debt

Illinois defines “marital debt” as any financial obligation acquired by either spouse after the marriage was finalized, and before the divorce is complete. An example of marital debt could be the amount owed on a credit card that was accrued while the marriage was intact. The court will take certain factors into account to ensure the accuracy of the determination, such as whether or not the credit card was opened prior to the marriage, or whether it is a joint or separate account. Hidden assets are commonly addressed in a divorce proceeding, as well

Non-marital debt, simply put, can be classified as financial obligations that are specifically assigned to the person that accumulated the debt. Non-marital debt typically happens before the marriage begins,but there are other ways for a debt to be considered non-marital. Examples of non-marital debt include:

• Debts related to property acquired as a gift
• Debts excluded by a valid agreement from both parties 
• Major loans that were prior to the marriage, such as student loans

An individual is typically not responsible for the debts acquired by their ex-spouse prior to their marriage or after divorce proceedings have begun.

How Are Loans Addressed?

Loans acquired throughout a marriage can oftentimes result in extensive debts for a couple, leading to complexities when a divorce is initiated. A loan taken out during a marriage is usually considered a marital debt, even if the loan is primarily for one spouse. Medical, student, automobile, and homeowner loans can all be distributed however the judge sees fit. Considering “who gained the most” from the loan, can be taken into account by the judge when distributing debt, property, and other assets. Depending on the circumstances, it might be best to pay off any loans or refinance them before a divorce is finalized. Loans that are ignored by one party could  lead to the damage of the other spouse's credit.

When a loan is taken out by a husband or wife under his or her name alone, the other partner may not be held accountable in most cases. The Illinois Rights of Married Persons Act gives each partner the freedom of not being responsible for debts not in his or her name, but some exceptions do apply.

Contact a Kane County Divorce Attorney

When dividing debts during a divorce, an equitable outcome is is the goal, as an unfair allocation of financial obligations could leave you struggling to move forward financially. Significant debts can cause added levels of stress and uncertainty during an already difficult time. At Weiler & Associates, Inc., our knowledgeable St. Charles debt division lawyers will have your best interest in mind while fighting for your financial stability. To schedule an initial consultation, call our office at 630-331-9110.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2102&ChapterID=59

http://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.huffpost.com/entry/marital-debt-whos-responsible-and-how-can-you-avoid_b_59fb74d6e4b09afdf01c4158