Many people here in Illinois can attest to the fact that ending a marriage affects the financial stability of both parties. While some of this is attributed to the division of assets and the increase in bills that come from supporting two households instead of one with the same monetary resources, that is not the only source of an economic downturn. The division of debts is another consideration in a divorce that many people tend not to want to think about, or forget about in the beginning.
First, debts that each party had prior to the marriage, if any, are typically the sole responsibility of the party to which they belong. The same principle generally applies to any debt one party incurred after the couple separated. Since Illinois is an equitable distribution state, a judge will more than likely find a way to divide up a couple’s debts as fairly as possible.
For example, when it comes to unsecured debts such as credit cards, the court can look at a variety of factors before deciding which party will become responsible for a particular debt, or how it will be divided between them. Judges look at factors such as income, contributions to the debt and more to help make that decision. When it comes to secured debts such as mortgages and car loans, the party receiving the asset will more than likely become responsible for the debt attached to it. Since they more than likely own the home and debt jointly, the person receiving the home will probably have to refinance. In doing so, the person keeping the home will be responsible for his or her share of the mortgage loan balance as well as the other party’s share of the net equity in the home, which can usually be made up either in cash or in other assets.
In many cases, it could take some research and investigation to determine whether a debt is marital or separate. Each party may argue a different position, and this is when providing the appropriate evidence to the court becomes critical. Dividing debts in a divorce is not always an easy task, and having an experienced attorney’s assistance could prove invaluable.