Divorce is a time of transition. A couple goes from a “we” to a “me.” And, in the process, they need to separate their lives. One of the biggest items that must be disentangled is the finances. Doing so gets more complicated the more assets a couple has and the longer they have been together.
The first step in divorce is sorting through finances is to identify all assets and debts. That can be a challenge. Assets get hidden and debts can too. But that’s a topic for a separate post.
Once all the assets and debts have been found, the next step is to understand each. Certain assets are marital, others are separate. This will usually depend on whether the assets were brought into the marriage or earned during it.
And just as there is more than one type of asset, there are two types of debts. The categories are living expenses and community property. Living expenses, as the name suggests, encompasses money a person pays for everyday things like rent, a mortgage, utilities, phone bills and so on. Community property, by contrast, covers all other expenses.
Illinois courts will look at these debts and try to sort them equitably. Equitably does not mean equally; instead it means fairly. So the court will sort through who acquired the debt and what the circumstances for that were. For example, if one spouse racked up a huge credit card bill on items that benefitted that spouse rather than the family, a court may require that spouse to bear most, if not all, of that debt.
But identifying the type of debt is just the tip of the iceberg. To make sure that iceberg does not trip Illinoisans up, they may benefit from discussing their situation with an experienced family-law attorney.
Source: Daily Finance, “Divorce and Debt: What You Owe and What You Don’t,” Geoff Williams, Accessed Feb. 17, 2015