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Division of Debts and Credit Card Balances

When a couple gets divorced in Illinois, the partners must divide both their assets and debts between them. Even if a couple has a well-executed premarital agreement addressing the disposition of separate and marital assets, they may not have had the foresight to also divide any potential debt. If the process is left to the court, debts are divided according to the state’s equitable distribution rules. If you don’t want a judge to decide your fate for you, you’ll need to work out some of your debt issues before you get to court.

The best option may be to pay off all of your debts before you divorce. If that is not a possibility, take measures to avoid taking on your former partner’s share of your debt in addition to your own.

Credit card debt

Credit card debt can be particularly problematic. You may enter into an agreement in which you take half of the balance on your joint credit cards and transfer it to your own, separate card. Note that the credit card company is not obligated to honor your divorce agreement — if your ex defaults on payment of the other half of the balance, you could still be liable for the entire amount. To avoid getting into this predicament, the agreement should require that your agreement to assume responsibility for your share of the debt is made subject to and conditioned upon your ex having transferred his share of the balance to an account without your name on it.

Debts incurred before and during divorce

While you are still married, all debt belongs to both partners. So, if your partner is angry about the divorce and buys a boat with your joint credit card, you could find yourself responsible for half of the balance. To avoid becoming responsible for debts incurred during the divorce process, take these immediate steps:

  • Document your expenditures — keep a balance sheet indicating your household expenses and any purchases you make for the benefit of the family
  • Close joint accounts and credit cards — transfer half of the balance and direct your income to an account held in your name alone
  • Hire an attorney

It is essential that you hire a divorce attorney early on in the process, especially if you suspect your ex is not going to readily take responsibility for a portion of your debt. How you fare financially in your divorce can affect your financial health for many years to come.

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Paul Chatzky
Founder

About Born in Havana, Cuba, Paul Chatzky is fluent in Spanish and English, enabling him to effectively represent a wider range of individuals and businesses. He is AV® Preeminent™ Peer Review Rated by Martindale-Hubbell®, and is listed among Illinois Super Lawyers, which is a reflection of his high ethical standards and exceptional legal knowledge. As…

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Deborah E. Chatzky
Paralegal

About Prior to joining the firm as a paralegal, Debbie was employed by major banking institutions as a loan processor and as an executive secretary. Debbie was also employed as an administrative assistant for the Board of Jewish Education. Having majored in Sociology, Debbie graduated from the University of Florida in 1980. Debbie completed her…

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