Dividing Joint Debts in a Divorce

 Posted on September 28, 2016 in Divorce and Finances

In a marriage, all assets and debts accrued while the couple is married are considered to be marital property. This includes any debt following purchases made primarily or solely for one partner's benefit, such as a new vehicle or a college education for one of the spouses. The only exception to this rule is if the couple has a prenuptial agreement in place that designates one partner as the sole owner of a specific asset or debt or if one partner receives an asset through inheritance or a gift. In these latter scenarios, the asset or debt is singly-held property and treated the same way as an asset or debt or she held when he or she entered the marriage. When your property is divided during your divorce, it is divided according to the doctrine of equitable distribution. This means that your assets and debts are assigned to you and your partner according to your needs and contributions to the marriage.

How the Court May Divide Your Debt

Because the court needs to divide your debt equitably, it will most likely try to balance each partner's debt with the amount of assets they receive. For example, if you are given a larger share of your marital investment portfolio, you may also be given a larger share of your marital debt. Multiple factors are considered when determining the best way to divide a couple's debt, such as each partner's income and how it will impact his or her ability to maintain a comfortable standard of living.

Make the Division of Debt Easier

Before you begin the divorce process, talk to your partner about how you will divide your marital debt. You can take steps before you even file for divorce to make this process easier and you can discuss strategies for minimizing your debt load while the divorce is pending and after, such as selling your home and sharing the profit. Divorce is expensive and many couples take steps to save money to avoid coming away from their divorces facing more debt than they had when they filed.

To make your debt division easier, consider the following strategies:

• Each transferring half of your credit card debt to a new, singly-held account;
• Closing jointly-held accounts before beginning the divorce process; and
• Finding ways to save money on your divorce so you do not accrue more debt in the process. One way is to consider a collaborative divorce, which gives you and your spouse considerably more control over your settlement than you would have in a traditional divorce.

Work with a Kane County Divorce Attorney

In a divorce, the couple's assets and debts are divided equitably. To ensure that you receive a fair share of your marital assets and debt load, work with an experienced Kane County divorce attorney who can advocate for you. To get started with a member of our firm, contact the Goostree Law Group today to set up your initial consultation. We can answer your questions and provide you with the legal guidance you need to confidently move through the divorce process.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000

http://money.usnews.com/money/personal-finance/articles/2013/08/19/why-a-collaborative-divorce-makes-financial-sense