Married couples generally share everything, which means that they will probably have to split all of the property and assets that they share in the event of divorce. The process of detangling financial accounts, personal holdings and debts can take weeks or even months of negotiation.
Many couples preparing for divorce in Illinois focus primarily on assets like retirement accounts and real property as they plan for divorce. However, debts frequently play an important role in property division proceedings and should not be ignored during the preparation process.
All debts accrued during a marriage can potentially be treated as part of the marital estate and are, therefore, subject to division in a divorce. Two kinds of debts, in particular, can lead to very emotional negotiations as a couple seeks to reach a divorce settlement.
1. Student loan debt
Student loan debt is frequently separate debt. If someone gets married after finishing their education, their student loan debts from before the marriage are their separate property and therefore their sole responsibility after the divorce.
However, when people go back to school or finish their degrees while married, their student loans may become marital debts that the spouses will factor into property division decisions. Given that someone’s education is often meant as an investment in the household’s financial future, sharing those financial responsibilities is reasonable in many cases.
2. Credit card debt
Some couples end up divorcing because one has really unhealthy spending habits and the other wants to save for retirement. Other couples divorce because of extramarital affairs. Credit card debt can come into play in both situations.
Spouses may fight bitterly over how to divide certain credit card debts when one spouse spent substantially more than the other. Sometimes, certain credit card debt won’t be part of the marital estate because it represents the dissipation of marital assets. Intentional debts accrued right before a divorce filing or amounts owed because of an extramarital affair may not be part of the marital estate and could become the responsibility of the spouse who spent the money.
Spouses worried about the ways in which debt will affect their divorce proceedings need to review their finances carefully and communicate with their lawyers about their worries. Learning more about how the state of Illinois approaches property division and marital debts can help those trying to plan for their upcoming divorce negotiations and proceedings.