The focus of many divorcing couples is on who gets the marital property and how to divide parental responsibilities. However, for couples who have outstanding debt, determining who is responsible for which debt is also important.
How do the courts divide debt in an Illinois divorce?
What is marital debt?
The first step in deciding how to divide debts is determining which debts are part of the marital estate. The Illinois Marriage and Dissolution of Marriage Act states that all debts acquired during the marriage are part of the marital estate. However, debt that exists before the marriage or a spouse acquires after filing for divorce is usually considered the personal debt of whichever spouse originally acquired it.
Who is responsible for paying debt?
Illinois is an equitable distribution state. The court awards a share of the marital assets and debts to each spouse based on what the court determines is fair. The judge determines an equitable distribution based on several factors:
- Each spouse’s contribution to the acquisition of the debt
- Duration of the marriage
- Economic circumstances of each spouse
- Obligations arising from a previous marriage
- Prenuptial or postnuptial agreements
- Age, health, occupation, income, employability and liabilities of each spouse
- Financial needs of each spouse
- Parental responsibilities of each spouse
Divorcing couples who do not wish to leave debt division up to a judge can attempt to reach an agreement out of court. Divorce proceedings do not halt collections on debt, so it is important to continue to make payments while the divorce is being finalized.