Whether taking out an auto loan, applying for a mortgage or purchasing something with a credit card, it often seems as if debt is an unavoidable part of life. But what happens to that debt during a divorce? This is an issue that many Illinois couples will have to address during asset division.
Like with marital assets, both parties should have a thorough understanding of all marital debt. This includes identifying who is actually liable for which debts. Understanding legal liability is key for making sensible decisions during property division, because one might still be responsible for missed payments even if his or her partner took on that debt during divorce. In general, anyone who signed or co-signed a debt is still responsible for things like late fees and missed payments regardless of marital status.
Taking proactive steps before filing for divorce can be helpful. For example, removing one’s self from a joint credit card or as a loan’s co-signer can minimize responsibility for certain debts. When this is not possible, paying down at least some joint debt can improve both current and future financial situations related to debt.
Debt can negatively impact a person’s life even in the best of situations, and divorce only makes things more complicated. This is why debt should always factor into how one thinks about finances before, during and after divorce. Since these matters are not always obvious during asset division, an attorney who is familiar with Illinois family law might be able to provide helpful guidance.