Differentiating Between Individual and Marital Debts in Divorce

 Posted on June 07, 2019 in Divorce Finances

Differentiating Between Individual and Marital Debts in DivorceDividing debts from your marriage can be one of the trickier parts of a divorce agreement. As an equitable division state, Illinois requires divorcees to split their debts in a way that is fair to both parties. Giving each spouse half of the debt may not be an equitable agreement, and a divorce court has the right to divide debt in a way that it deems to be equitable. For instance, a spouse with greater assets after the divorce may also receive a greater share of the debt. Divorcees also must consider whether a debt belongs to an individual or both parties.

Individual Debts

A debt belongs to an individual spouse if the creditor holds only that spouse liable for repaying the debt. You can usually identify an individual debt if:

  • It was created before you were married or after you were legally separated; or
  • The debt contract lists only one person’s name as the owner.

Student loans and individual credit cards are common sources of non-marital debt, as long as they follow the above criteria. You likely want to avoid agreeing to pay for a debt that you are not legally obligated to pay. If one spouse has significantly greater individual debt, he or she may receive a greater share of the marital properties to compensate.

Marital Debts

Most debts that you create after you are married are marital debts, even if only one of you benefited from the loan. You may agree with your spouse that the person who benefited more from the loan should be responsible for repaying most or all of the debt. However, a divorce agreement does not change your joint liability for a debt because:

  • The creditor must agree to transfer liability of the debt to one person; and
  • You will be liable for the debt if your former spouse fails to repay it as promised.

For debts connected to a property, you must decide whether to sell the property in order to clear yourselves of the debt. Divorcees commonly face this situation with their home mortgage. Only one of you can keep the marital home, but you may not be capable of making mortgage payments on your own.

Contact a Kane County Divorce Lawyer

Failing to properly divide and settle your debts during divorce can hurt your credit score and put you in a weaker financial position. A St. Charles, Illinois, divorce attorney at Goostree Law Group can help you divide your marital debts in a way that is fair. Schedule a free consultation by calling 630-584-4800.



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