How to Handle Debt and Divorce

 Posted on March 26, 2019 in Divorce

The division of marital property is an essential part of the divorce process, but what some people forget is the division of debts. Whether credit cards, car loans, or student loans, it is important to take a close look at the debts that have accrued as a couple.

Every state has its own approach to dividing property, money, and debts. In Illinois, these are split according to what is equitable, not necessarily even, and takes various factors into account. Anything that is considered marital property can qualify for division. 

What is Marital Property?

Marital property includes assets and debts accumulated during the marriage. If one spouse bought a car before the marriage, it would likely go to the original buyer. However, if the couple bought the same vehicle during the marriage, that would qualify for equitable division.

These rules also apply to debt. Any liability is subject to be split fairly, no matter whose name is associated with the debt. An individual credit card used during a marriage may not be considered marital debt if the sole benefit of the purchases went to that individual. However, if that same card is used for family purchases, those would likely be considered marital debts. 

A loan or credit card in your name but that is considered marital property can be split however the court decides. If your spouse is ruled responsible for a liability and does not pay, this may affect your credit score if your name is attached. Sometimes this is avoided completely by the court, but the account holder may receive a higher percentage of the marital property. Credit is determined by the amount of liabilities, the age of credit accounts, credit inquiries, and payment history. Getting a divorce will not directly affect your credit score, but there are factors related to divorce that could make your score drop. Your ex may not be used to paying bills or could have a hard time coming up with funds. Some accounts may not be able to be refinanced, so you and your ex may still have to work together in order to get payments in on time. 

Contact a Schaumburg Divorce Lawyer Today

What is considered marital property and marital debt is not always straightforward. Contact an experienced Arlington Heights divorce attorney to assist in planning your divorce and for post-divorce life. Call our office at 630-426-0196 to set up an initial consultation.

Sources:

https://www.credit.com/personal-finance/divorce-survival-guide/

https://www.thebalance.com/debt-and-divorce-315507