During a divorce, a big part of the process is splitting your marital assets and debts. Unlike other states, Illinois relies on dividing property equitably, which means fairly but not always equally.
Your assets and debts will be divided in basically the same way. As a result, you and your spouse will likely wind up with certain debts you are responsible for. However, just because you were not assigned a debt during your divorce, if you co-signed on it, the creditors may still seek repayment from you if your spouse fails to fulfill the obligation.
Understanding debt liability
Your liability for a debt isn’t changed just because you divorce. Creditors aren’t concerned with your marital status – they are worried about being paid the money they are owed.
While Illinois will split the debts fairly, if your spouse doesn’t make payments on a debt they were assigned that is also in your name, you can be held responsible for it. If you also fail to meet the repayment obligation, your credit rating may take a hit, and the creditor may seek additional repayment methods.
How to avoid these issues
The best way to avoid being held responsible for a debt assigned to your ex-spouse in a divorce is to make sure it is out of your name before the divorce is finalized. This can be done by paying it off or having the other person refinance it into their name only.
Protecting yourself financially in a divorce
You should not put your financial health in the hands of your ex-spouse. If they don’t repay a debt with your name on it, it will impact your financial situation. Taking the right steps now will ensure that you don’t have to deal with these headaches after your divorce.