A couple’s debt must be divided fairly during divorce, but fair does not mean 50/50 in all cases. Debt is a fact of life for a rather large portion of Americans. Few people can honestly say that they are entirely debt-free. Most people have a car payment, a student loan, a mortgage, or credit cards they have needed to make ends meet. When a marriage ends, the marital debt must be divided just like the marital assets. There is a lot that goes into determining which spouse is responsible for which debt. Even if a credit card or loan is only in one spouse’s name, it could be considered marital debt depending on the circumstances. As dividing debt in an Illinois divorce can be highly complicated, it is very important that you speak to a qualified Illinois divorce attorney. An attorney can help you understand how your debt may be divided based on your personal situation. 

What is Marital Debt?

Often, married couples will take on debt together to buy things that benefit them both. When this is the case, that debt is likely to be seen as marital debt, even if it is only officially in one spouse’s name. For example, if one spouse uses a credit card in their name only to pay bills during hard times, that debt is likely to belong to both spouses in some ways. 

How do Courts Divide Debt in DuPage County?

In many cases, spouses can decide how to divide their debt by agreement. Mediation can help spouses avoid a courtroom battle and work together to find a solution. If the court does need to step in and help divide debt, they will consider factors like whether one spouse is more responsible for the debt than the other. Additionally, if the debt is tied to an asset - like an auto loan tied to a car - the spouse who keeps the asset usually keeps the debt.

You put a lot of effort into earning your money and carefully planned for your future, including retirement. Unfortunately, a divorce can derail such goals. Knowing how your divorce may impact your retirement accounts is the first step in safeguarding them.

The experienced attorneys at Andrew Cores Family Law Group will assist you in getting your future back on track while safeguarding your retirement accounts and settling difficult issues with your spouse. 

Dividing Retirement Accounts

According to Illinois law, the percentage of your retirement and investment accounts that you accumulated during marriage may be split between spouses in a divorce, including:

Money is frequently one of the top concerns for the majority of couples going through a divorce. After a marriage ends, bank account balances can have a great impact on an individual’s ability to maintain their financial situation after a divorce.

It can be challenging for each partner to revamp their finances to bounce back from and adapt to the lifestyle changes that divorce brings. Additionally, marital debt and asset disputes can make it even more difficult.

What is Considered Marital Debt in Illinois?

Debts and other ongoing commitments are included as financial considerations for partitioning marital property under the Illinois Marriage and Dissolution of Marriage Act. According to the law, "marital property" refers to any assets (or obligations) obtained by either spouse during the marriage. This implies that any joint loans, credit lines, or accounts created in the names of both spouses are marital property and would be shared equally by them both in the case of divorce. From credit card debts, mortgages, and auto loans to medical bills and unpaid taxes, these obligations can range widely.

During the process of divorce, you are likely to experience many changes to your life. With all of the uncertainty that abounds, it is not uncommon for people in the midst of a divorce to try to maintain a level of security and stability by continuing to live in their marital home, even after their divorce is finalized. Staying in the family home, however, is not always quite so simple.

Crucial Considerations Regarding the Family Home

The family home is usually included in the division of marital property, so the question of which spouse, if either, will retain possession of the home will need to be legally resolved. If you are deciding whether you should pursue possession of the home, there are a number of important questions to consider, including:

• What is the state of the real estate market? If the home market is particularly hot and your home is likely to sell at a substantial profit, your best bet might be to sell and move into a new house—one that better fits your post-divorce situation. If the market is sluggish, you might be better off staying put.

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The distribution of assets is an important element in most Illinois divorce cases, and it can often lead to misunderstandings and arguments between the spouses. Items with sentimental value may cause even more disagreements than higher-value assets such as the marital home or vehicles, as both spouses might have an emotional attachment, making them less agreeable to parting with a particular piece of property. If you are interested in keeping a family heirloom, a specific work of art, or any other item with sentimental value, there are some ways you might be able to do so.

Is the Item a Marital Asset?

Whether or not a sentimental item is considered marital property depends on several factors. The two most important factors are when and how the item was acquired. Under Illinois law, an asset is generally considered marital property if it was acquired by either spouse during the marriage. If the item in question was yours before you got married, you typically have the right to keep it following your divorce.

It also matters how the item was acquired. Property acquired during the marriage can be considered non-marital if it was received as an inheritance specifically to one spouse. This means that if you inherited an heirloom from a family member, it is likely to be considered yours and not subject to being divided in the divorce process. The same is true of a gift if it is made to just one spouse.