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Am I Responsible for My Spouse’s Credit Card Debt in Divorce?When going through a divorce, there are often two areas that bring about the most contention: children and finances. These two subjects can sometimes bring out a side of your spouse that you have never seen before. Financially speaking, a divorce forces you to look into the nitty-gritty details of both you and your spouse’s spending habits. Couples may think they know their partner until hidden debts get revealed. Whether or not you were the hand behind the spending, you may be responsible for paying these dues during the marital asset division process.

Equitable Distribution

Like most states throughout the U.S., Illinois follows the equitable distribution model when dividing marital property in a divorce. This means that all assets and debts are divided equitably, not necessarily in half. In other words, the judge considers various factors before dividing anything up between spouses. This includes each spouse’s income, financial needs, and personal assets. The asset division process not only includes positive property owned by the couple, but also any debt incurred throughout their marriage. This must also be divvied up between the two individuals, especially any credit card debt that has accumulated over the years.

What About Credit Card Debt?

Unfortunately, some spouses may uncover large amounts of credit card debt that they were unaware of and not responsible for during the divorce process. Though your spouse may have been the one spending the money, if your name is tied to the account in any way, you are still on the hook for the amount owed. A divorce agreement cannot alter your contractual obligation to the creditor who lent your spouse the money that they spent using the card.

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Dealing With Marital Debt During an Illinois DivorceThe majority of your negotiations during your divorce will involve you and your spouse fighting over what each of you wants out of the divorce. One of the only things you and your spouse will not be fighting to keep are the debts that the two of you incurred during your marriage. In an ideal world, you and your spouse would each walk away from the marriage with only the debts that you each created, but that is not how divorce works. Illinois divides marital assets and debts on an equitable basis, which typically means you will only be responsible for the debts that you have the means to repay. If you and your spouse have a difference in income, the spouse with the higher income will typically be responsible for more of the marital debt.

Go Into Your Divorce Debt Free

Most divorce attorneys will tell you that your troubles can be cut in half if you go into your divorce without any marital debt. Lenders typically do not care about divorce decrees, nor are they legally required to abide by them. Lenders just want their money. If your spouse is ordered to repay a certain debt that also has your name on it, you are still legally responsible for that debt after divorce and can suffer the consequences if that debt is not paid back. Still, it is unfeasible for many couples to repay all of their debts before getting a divorce, though you should repay as much as you can.

Allocating Secured and Unsecured Debts

Handling debts during a divorce can be done in a few different ways, depending on the type of debt it is. Secured debts, or debts that are secured by a certain asset, such as a house or car, typically require refinancing if one spouse is keeping the asset and both spouses are on the debt agreement. To release one spouse from being legally obligated to repay a secured debt, the spouse who is keeping the asset must qualify for refinancing on his or her own.

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Preparing Your Finances for an Illinois DivorceFor many people, getting a divorce is the most difficult thing they have ever had to do or experience in their lives. Getting a divorce uproots your entire life after you have gotten used to it for years or even decades. Divorces not only spell emotional turmoil, but they can also wreak havoc on your finances if you are not careful. Many people often underestimate the effect a divorce will have on their finances or simply make poor decisions because they are under pressure. One way to avoid making these mistakes and to set yourself up for success after your divorce is by preparing before you even begin the divorce process.

Know What You Are Working With

Before you do anything, your first task is to take inventory of everything that you own. You should take stock of all assets and have all pertinent documents on hand, including:

  • Savings and checking account statements;
  • Brokerage account statements;
  • Pension and Social Security statements;
  • Property deeds and car titles; and
  • Any physical property you own, such as household items.

Do not forget to also take inventory of any liabilities or debts you may have. Gather all documents pertaining to these, such as:

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