After their marriage, many couples not only merge their hearts, but they also merge their assets, bank accounts, and possessions. When a couple wants to divorce, there can be some confusion about what happens to joint accounts, debts that have been merged, and assets and debts accumulated throughout the marriage.

To protect yourself and get your fair share from a divorce, you must understand the basics of what happens to joint accounts and debts in Illinois during divorce.

 

Understanding Illinois Divorce Laws

In the United States, courts generally use two guiding principles to distribute assets during divorce: equitable distribution and community property. Illinois follows the equitable distribution system. That means the court will make a fair and equitable distribution of a couple’s assets and debts during divorce. There is some confusion surrounding “equitable distribution” because equitable does not necessarily mean a 50-50 split. It means that the court distributes assets and debts based on specific considerations and divides property in a way it deems fair.

To arrive at what the court considers a fair settlement, it can evaluate factors such as:

  • The income and financial resources of each spouse
  • The length of the marriage
  • Each spouse’s contribution to the debt
  • Each spouse’s contribution to the household
  • Each spouse’s parental responsibilities
  • Earning potential
  • Tax consequences
  • Premarital agreements

 

In Illinois, only marital property is subject to division during a divorce. Anything earned or bought during a marriage can be considered marital property. Non-marital property includes assets owned before marriage or property inherited or gifted to an individual that has not been co-mingled with marital assets. Non-marital property does not get divided in divorce.

 

What Happens to Joint Accounts in a Divorce?

A joint bank account is an account shared by two or more individuals. These financial account arrangements are standard in marriages because they give both partners equal access to the funds in the account. Joint bank accounts created or funded during a marriage are marital property, which means the court can equitably divide the funds in the joint accounts between partners.

While separate property, like gifts and inheritances, is considered non-marital property, asset division can get complicated when separate property is placed into a joint account or commingled with marital assets. Situations can also become complex in contentious divorce cases when one spouse makes excessive purchases or withdrawals from a joint account or moves money from a joint account to spend down or hide assets from their partner before a divorce is finalized.

 

What Happens to Debts During an Illinois Divorce?

Marital debt is any debt incurred by one or both spouses throughout a marriage. Common examples of marital debt can include credit card balances, car loans, educational loans, mortgages, and medical bills.

When it comes time to divide debt during an Illinois divorce, it does not matter whose name is on the bill. A credit card in one spouse’s name is generally still considered a part of marital debt and the responsibility of both parties. Only debt accumulated before marriage by one partner remains the sole responsibility of that partner. A student loan secured before marriage can be considered a non-marital debt. However, a student loan acquired during marriage is a marital debt.

The equitable distribution of marital debt could require the court to assign responsibility for joint debts to one spouse or to divide the debt fairly between both spouses. Depending on the situation’s circumstances, the court often does its best to distribute debt reasonably and rationally so that one partner is not unfairly burdened by excessive debt.

Debt division is also where things can get complicated. One partner may have a credit card in their name to purchase items for the family. The court may distribute partial responsibility for paying part of that debt to the other spouse. That doesn’t mean the cardholder can stop making payments. If your ex-partner stops paying, the credit card company will still hold you accountable for the remaining balance.

The same goes for a car loan or mortgage. A spouse may also be liable for debts the other spouse concealed or hid during the marriage. An individual must prove they did not know or consent to the spending or that the debt did not benefit the marriage, such as debt incurred on an affair partner.

 

Let an Experienced Illinois Divorce Lawyer Help Untangle Your Finances

The Law Office of Vogel & Mourelatos, LLC, is a boutique law firm focusing on family law and divorce. Our legal team takes a personalized approach to finding solutions to your legal issues. If you are considering divorce, your first call should be to our team so we can help you plan for joint account and debt distribution and give you the best opportunity to obtain a favorable outcome.

Contact our Illinois office today, and let’s discuss your case confidentially.