Debt Allocation during a Divorce

 Posted on March 26,2015 in Divorce

Debt can be a hard subject to discuss during marriage, and even harder to discuss during divorce proceedings. One party may feel debt should be split equally, while the other does not feel they should have to pay any of the debt, especially if it is not in their name. Divorce can already be a stressful time and dividing debt can make it worse. Debt allocation lawyers can help you understand what debt is considered marital debt.

Dividing Debt

Illinois is an "equitable-distribution" state, meaning that property and debt will be divided into how the judge believes is the most fair and just. This does not mean it will be divided equally. Different factors will be considered, such as:

• Income of each party;
• Future earning potential;
• Child custody;
• Length of marriage;
• Was the debt accrued before or during the marriage;
• If the purchases benefited a family owned business or commercial real estate property;
• If one party accrued debt in the other party's name without their knowledge; and
• Did one party conceal debt from the other party?

Any debt that is attached to property, such as mortgages or car loans, will go with the property when it is divided. If one party receives the house in the divorce settlement, they are responsible for the mortgage payment. Debt from unsecured sources, such as credit cards, medical expenses, personal loans, or student loans, will be equitably divided between the divorcing parties.

Declaring Debt

During a divorce, everything comes to light. If you or your spouse has accrued debt without the other's knowledge, it will need to be listed in the documents to accurately determine debt allocation, property division, spousal maintenance, and child custody.

If your spouse has accrued debt without your knowledge, you may not be required to take on that debt repayment. It is better to know exactly what debt you and your spouse have, what was accrued during marriage, and what was brought into the marriage. Listing all debt will help a debt allocation attorney determine how to fight for the best settlement so you are not responsible for debt that you did not accrue or know about or is not considered marital debt.

If you are considering a divorce and have marital debt or debt from before your marriage, you should speak with an experienced Wheaton debt allocation attorney today. Contact the law offices of Stock, Carlson, Flynn and McGrath, LLC at 630-665-2500 to speak to an attorney.