When divorcing couples think about the process ahead, they tend to focus on the division of their assets. However, it is important to understand that marital debt is usually factored into the divorce settlement as well. Learn more about divorcing with joint debt, and discover what a seasoned divorce attorney can do to improve the outcome of your case and future financial standing.
How Debt is Divided During an Illinois Divorce
Debt is handled a lot like assets in a divorce; parties report any debts that they have and they decide whom will be responsible for it. Some negotiate this matter, while others have their debts and assets divided by a judge. In either case, the balance of the debt is usually deducted from the settlement amount. The assumed “owner” of the debt is then responsible for paying it back. Unfortunately, if the spouse that is responsible for the debt defaults, creditors may start looking at the other party to collect any remaining balance.
Divorce and Your Creditors
A lot of couples assume that they can resolve debt issues by simply provide their creditors with a copy of their divorce decree. Sadly, this is rarely ever the case. Creditors do not concern themselves with the life details of their debtors. Their only objective is to recover the money that they have loaned, and since they are not required to honor any agreements that are made between you and your spouse during a divorce, they will likely turn to you if your spouse defaults on their payments, disappears, or files bankruptcy after the divorce.