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Debt division in an Illinois divorce

On Behalf of | Aug 10, 2021 | Divorce |

Dividing property and assets acquired during a marriage is a common sore spot in divorce proceedings. Trying to figure out who gets the house, how savings will be split, and the way a joint business will be run can get a little hairy. It’s no wonder why discussions on marital debt accretion take the back seat.

Marital debts may mar the personal property and real estate division process, even in cases where the divorcing couple is parting on amicable terms. In particularly nasty disputes, court battles and heated discussions may take center stage, especially where one spouse holds the other solely accountable for some of the amounts due.

Illinois law on debt and asset division

Understanding what Illinois law states regarding debt division will undoubtedly make the process smoother. The Illinois Marriage and Dissolution of Marriage Act refers to the marital property as any property – debt and other financial obligations included – that the divorcing couple acquired between the marriage date and that of filing the divorce.     

The debt that either spouse had to their name prior to marriage is individual debt. Examples of marital debt include:

  •          Vehicle debt
  •          Home mortgage debt
  •          Medical bills
  •          Student debt
  •          Credit card debt
  •          Debt from jointly owned businesses
  •          Investment debt

Even when the use or investment of this debt was for the direct benefit of one spouse, such as a loan to buy the wife’s car or a student loan to further the husband’s education, it still counts as marital debt.

Debt division considerations

When distinguishing between marital and non-marital debts, the day of the marriage’s officialization is not the only controlling factor. There are certain cases where financial acquisitions after the wedding date fall under the non-marital classification. Examples of debts disparate from the division of debts and assets include that one party incurs:

  •          Due to a non-marital asset depreciating
  •          When a liability claim has been filed against a non-marital asset
  •          During the exchange of non-marital property for non-marital assets
  •          Subsequent to a legal separation

For debts of a marital nature, the couple has the avenue of carrying out their own negotiations with a view of achieving equitable distribution. Compromises regarding the division of debts and assets are possible through the attorneys representing either spouse. Furthermore, the use of mediation processes to reach lawful, agreeable terms may be a requirement set by an Illinois divorce court.

What happens in cases of debt concealment by one spouse?

It is not uncommon to find marriages where one spouse handles most of the finances and book-keeping. In such situations, divorce proceedings may bring to light debts the other spouse was unaware of. Normally, you would need to pay off this debt; however, if one can prove before a judge the complete unawareness of said debt, the court may assign it solely to the unforthcoming partner.

If these amounts due were additionally not used for the benefit of the family or the marriage, one’s legal counsel might be able to bring this to the court’s attention.       

Furthermore, both parties are required by law to present financial affidavits as part of the divorce process. The final page of the affidavit has a ‘Verification by Certification’ that serves pursuant to the Illinois Code of Civil Procedure Section 735 ILCS 5/1-109. It states that any false statement included in the legal document is perjury and subject to penalties.