Protecting Your Credit and Financial Future in an Illinois Divorce

 Posted on October 03,2017 in Divorce Finances

Separating your finances and assets in a divorce can be a contentious and downright frustrating process. Matters can be made worse once parties learn that a divorce decree does not protect them if a spouse fails to make timely payments on a joint credit account. Thankfully, it may be possible to reduce the risk of long-term credit and financial damage after divorce. Learn how, and discover what an experienced divorce lawyer can do for you, with help from the following.

The Truth About Debt and Divorce

While most people recognize that assets are divided in a divorce, not everyone realizes that debts must also be divided. To determine who owes the debt, the courts will examine several different factors, including who benefited most from the debt and who originally took out the line of credit. Debt is then assigned to the parties, much like assets, but that is where the similarities between debts and assets end.

Creditors are not obligated to consider a divorce decree. Instead, they have a contract with the original borrower of funds - this is who they turn to when payments are not made. The original debtor is also the person who takes the hit to their credit, should the debt continue to go unpaid or get sent to collections. In short, it is the individual who originally took out the debt who suffers the negative effects of unpaid debt, regardless of what the divorce decree says.

Mitigating Against the Risk of Unpaid Debts

There are many strategies that individuals can use to mitigate against the risk of unpaid debts after divorce, but one of the most effective is to simply pay off all debts prior to filing. Alternatively, debtors may wish to pay off any debts in their name once they receive their divorce settlement, regardless of who is deemed responsible in the decree. Lastly, individuals will want to ensure they have removed their spouse as an authorized user on all accounts, unless, of course, it is a joint account that is owned by both parties.

Our DuPage County Divorce Lawyers Can Protect Your Financial Future

At Stock, Carlson & Asso. LLC, we take the time to ensure you understand the implications of any decisions you make during divorce. We also help you plan for the undesirable aspects of your case, such as the distribution of debt and assist you in strategizing for the future. Learn more about what our DuPage County divorce lawyers can do to protect your financial well-being by scheduling a personalized consultation. Call 630-665-2500 today.

Source:

http://www.foxbusiness.com/features/2014/07/11/debt-and-divorce-5-steps-to-make-clean-credit-split.html