Dividing debt is one of the most overlooked yet critical aspects of divorce. While much attention is paid to the division of property and assets, understanding who is responsible for marital debt can prevent costly surprises down the road. From credit cards to mortgages, knowing how debt is assigned post-divorce is essential for financial clarity and legal protection.
At Kulerski & Cornelison, our team serves families DuPage and Cook counties. Our Illinois divorce attorneys help you divide both your debts and assets in a legal and effective manner. Schedule a meeting with our office to learn more about how we can protect your financial future.
Understanding Marital vs. Separate Debt
Courts typically categorize debts as either:
- Marital debt: Obligations incurred during the marriage, regardless of which spouse’s name appears on the account.
- Separate debt: Debts acquired before the marriage or after the separation date, usually retained by the original debtor.
If a credit card was used during the marriage, even if it’s in one spouse’s name, it is generally considered marital debt. The same applies to loans used for joint expenses like household renovations or family vacations.
Common Types of Marital Debt
Mortgage Debt
If the family home was purchased during the marriage, both spouses may be liable for the mortgage, even if only one is staying in the home. Courts may order one party to refinance the mortgage or sell the property and split the proceeds. This can be tricky to handle without an attorney to guide you through the process.
Credit Card Debt
Joint credit cards or individual cards used for marital expenses are typically divided between spouses. The court may:
- Assign specific balances to each party
- Order debt consolidation followed by division
- Require repayment through asset liquidation
Auto Loans
Ownership and debt responsibility often go hand in hand. If one spouse keeps the car, they may assume the loan, even if both names appear on the contract.
Medical Bills
Medical expenses incurred during the marriage are usually deemed marital debt. Courts may apportion them based on income and the circumstances of the care.
Protecting Yourself from Post-Divorce Debt Surprises
Close Joint Accounts
Before or during the divorce process, close or freeze joint accounts to prevent new debts from accruing.
Review Your Credit Report
A thorough review helps identify:
- Hidden debts
- Joint liabilities
- Accounts you may have forgotten about
Consider Indemnity Clauses
Your divorce decree can include indemnity clauses requiring one spouse to reimburse the other for specific debts if payments are missed. This adds an extra layer of protection. However, keep in mind that lenders are not bound by divorce orders.
Get Agreements in Writing
Verbal agreements are insufficient. All debt responsibility should be documented in the settlement agreement or court order.
Key Legal Considerations
- Cosigned Loans: Even if your spouse agrees to take on the debt, creditors may still pursue you if you’re listed as a cosigner.
- Student Loans: If incurred during the marriage and used for joint benefit (e.g., supporting a spouse through school), courts may consider them marital debt.
- Bankruptcy Risk: If one spouse files for bankruptcy post-divorce, creditors may target the other, particularly in joint obligations.
Divide Your Debt the Right Way During an Illinois Divorce
Dividing debt is as important as dividing property. Without a clear agreement, you could be liable for debts you did not anticipate. Work with a qualified attorney and financial expert to ensure all liabilities are properly assessed and documented. By understanding how debt is managed after divorce, you can safeguard your financial future and minimize conflict
At Kulerski & Cornelison, our team can help you divide up your marital debt during a divorce. Contact us today for a consultation of your case.