“Who gets what?” is a major question and core focus for many divorcing spouses in Illinois, but it is far from the only topic of concern. Financial debt is another hot-button issue for some divorcing couples that can lead to complex questions and difficult answers.
Debt and the divorce process
Debt is often a major focus during divorce for obvious reasons. Money owed by one or both spouses is an obligation that persists until it’s paid off; shared debt unfortunately does not just disappear after divorce.
When to bring up debt during the divorce proceedings can be both tricky and problematic. An in-depth overview from the Huffington Post on divorce-tied debt and linked payment exactions highlights this common concern by posing the question, “Who’s responsible for what?”
Whose debt is it anyway?
If you are a divorcing Illinois resident in the midst of dissolving a marriage that involves existing debt, you likely have some serious concerns. Feeling worried or preoccupied about debt is common, given that debt assumes many forms and can outlast even the lengthiest divorce.
Maybe your spouse took out major student loan loans prior to your marriage, or maybe you did yourself. Or perhaps your former partner took out a loan solely in their own name during your marriage.
But what if money was spent on a gambling hobby, home repairs, child care or something else? Does that matter when deciding who is legally responsible to pay back the principal and interest, regardless of which spouse created the debt in the first place?
The short answer to that question is yes, it might. Some debt is classified as separate and does not transfer ownership during divorce. In other cases, a court might determine some debts were accrued for the mutual benefit of both married partners. The Huffington Post notes that “certain debts can be considered marital debt, and that would have to be reconciled during a divorce.”
What about debt from mortgage payments?
Here’s a quick example: Say that you acquired a bit of debt on your personal credit card to secure funds for paying the mortgage on the home you and your spouse shared. Your spouse would have then directly benefited from your debt, right? In that case, responsibility for those debt payments would likely be considered marital debt and would be the responsibility of both spouses.
The questions surrounding debt during the divorce process can be varied and complex. Divorcing couples might find it helpful to work closely with proven property division legal counsel to fully understand how assumed debt will handled during their divorce.