Dealing with Significant Debt in an Illinois Divorce

 Posted on February 14, 2025 in Divorce

In a recent survey, 57 percent of Americans said they live paycheck to paycheck. Not only do we live paycheck to paycheck, but most of us (80 percent) have a significant amount of debt. As of 2022, the average debt for individual Americans was $38,000 – not including mortgage debt. Credit card debt and vehicle debt are the most common types of debt, along with student loans and medical debt.

The focus during a divorce is usually on dividing marital assets, but dividing marital debt can actually be a more difficult, complex issue. Illinois is an equitable distribution state in terms of asset division. Unlike a community property state that divides marital assets – and debts – right down the middle, equitable distribution states divide marital assets and debts fairly. What the term "fairly" means will depend on each couple’s unique situation.

Since the division of marital assets and debt can have a profound effect on each spouse’s financial future, it is important to understand how debts may be addressed during an Illinois divorce. If you are considering divorce and want to know how your marital debt could affect you, it can be beneficial to speak to an experienced Plainfield, IL family law attorney.  

What if One Spouse Had No Part in Accruing Specific Debts?

Marital debt is looked at in relation to marital assets division. Debt accumulated during a couple’s marriage is usually deemed marital debt, no matter which spouse incurred the debt. That being said, equitable distribution regards such issues fairly rather than equally, so there may be other considerations.

When dividing marital assets and debt, the court will consider the following factors:

• Each spouse’s financial and non-financial contributions to the marriage.  
• The length of the marriage is a consideration because finances are generally more deeply intertwined in a longer marriage, with both spouses making significant contributions.
• The economic circumstances of each spouse consider non-marital assets, potential for future earnings, healthcare costs, and support for dependents.
•  Future earning potential considers past sacrifices for a spouse or family, education, work history, skills, and employability in the current job market.
• The health and age of each spouse can impact property and debt division if one spouse is nearing retirement age, has a chronic illness or disability, or has few job opportunities because of health or age.

How Different Types of Debts Are Handled During Divorce

For many couples, the mortgage on their home may be their largest debt. Both spouse’s names are likely on the mortgage, making both responsible for the debt. If one spouse keeps the house during asset division, he or she may be required to refinance the home to remove the other spouse’s name from the mortgage.

Auto loans may be awarded to the spouse who keeps the car he or she typically drives. Like a home mortgage, refinancing may be necessary to ensure the other spouse does not remain legally obligated for the car loan. If there is a large difference between the balances of different auto loans, other marital assets may be awarded to ensure fairness.

Credit card debt, as noted, is considered marital debt unless it can be shown that one spouse has dissipated marital assets. This means that one spouse made significant purchases that were for his or her sole benefit after the marriage began to break down. If this is the case, that spouse may end up being solely responsible for such debt.   

Student loans taken out before the marriage are usually given to the spouse who took out the loans. Responsibility for student loans taken out during the marriage will have consideration given to whether those student loans allowed one spouse to contribute significantly more to the marital assets.  

Contact a Will County, IL Divorce Attorney

When a couple has overwhelming debt, careful division of debt is necessary, and bankruptcy may be the only realistic option. Speaking to an experienced Joliet, IL divorce lawyer from Reeder & Brown, P.C. can help ensure you receive a fair settlement. Our firm is focused on honesty, integrity, and great client service. Call 815-885-5980 to schedule your free consultation.