How Is Debt Split in an Illinois Divorce?

 Posted on January 21, 2025 in Divorce

Dividing assets during a divorce is challenging, and dividing debts can be equally complicated, if not more so. From credit card balances to mortgages, knowing how these financial obligations are split in a divorce is vital to ensuring a fair financial settlement. With the guidance of an Illinois divorce attorney, you can make sense of the process, protect your interests, and create a path toward financial stability.

What Is Marital Debt and How Is It Defined?

In Illinois, marital debt refers to financial obligations that have been incurred by either spouse during the marriage. These debts can include:

• Credit card balances

• Mortgage loans

• Car loans

• Personal loans

• Business debts

According to state law, all marital property, including debts, is subject to equitable distribution in a divorce. This means that the court divides marital debts in a way it deems fair, which may not necessarily mean equal. Any debts from before the marriage or after the couple filed for divorce are typically considered non-marital and are the responsibility of the spouse who incurred them.

What Does the Court Evaluate When Determining Equitable Distribution?

Under equitable distribution, the court considers several factors when determining how to divide marital debt, including:

• Each spouse’s income and financial situation

• The length of the marriage

• Contributions to the marriage, including non-financial contributions

• Each spouse’s ability to pay off the debt

• Custody arrangements if children are involved

By analyzing these factors, Illinois courts aim to reach a fair resolution that balances the financial realities of both parties.

What Happens to Joint Accounts in an Illinois Divorce?

Joint accounts, including credit cards or bank accounts, are often a significant source of debt during a divorce. In Illinois, joint debts are treated as marital debts, regardless of which spouse made the charges. The court will assign responsibility for these debts based on the guidelines of equitable distribution.

To avoid potential financial disputes, it is wise for divorcing spouses to:

• Close or freeze joint accounts: Prevent additional debt from accumulating during the divorce proceedings.

• Transfer balances to individual accounts: This step can help each spouse define their financial responsibilities.

• Maintain records of account activity: Keeping detailed records can help ensure accurate debt division and prevent misunderstandings.

Are Mortgages and Other Secured Debts Treated Differently?

Secured debts, such as mortgages or car loans, are tied to specific assets. When deciding how to handle these types of debts, the court will consider each spouse’s ability to maintain the asset. In Illinois, courts may address these debts by:

• Awarding the asset, such as the house or car, to one spouse and giving the associated debt to that spouse.

• Requiring the couple to sell the asset to pay off the debt, with any remaining proceeds split between the spouses.

Can Spouses Agree on a Financial Settlement Without Court Intervention?

Divorcing spouses in Illinois are encouraged to reach a mutual agreement on property division and debt allocation. A negotiated financial settlement can save time, reduce legal costs, and provide more control over the outcome. However, the court must still approve any agreement to make sure it complies with the law and is fair to both parties.

Contact a Kane County, IL Divorce Attorney for Debt Division Assistance

If you are going through a divorce and concerned about how debts like credit cards, mortgages, and loans will be divided, a St. Charles, IL divorce lawyer at Goostree Law Group can provide the guidance you need. Our team will work to help secure a fair financial settlement and protect your future. Call 630-584-4800 to schedule a free consultation today.