Divorce and your financial future

On behalf of Stange Law Firm, PC posted in divorce on Saturday, April 6, 2019.

Illinois residents who have made the hard choice to get divorced must wrestle with many challenging steps through the process of reaching a final settlement. For families with children, certainly determining when each parent will have time with the kids may be one of the hardest elements of a divorce. When it comes time to focus on financial matters and how to split assets, emotions may run high as well especially when the topic of how to split debt arises.

Money Management International explains that if a particular debt is in one spouse’s name only, that debt main remain the sole responsibility of that person. Any debts with both spouses listed, however, may need to be split just like assets. A mortgage or credit card account are two common examples of joint debts.

When it comes to credit card debt, proactivity can be a couple’s best friend. Steps should be taken to prevent further debt from being incurred as soon as the couple has agreed to separate or divorce. This may include cancelling a card or freezing it at a minimum. CreditCards.com recommends that couples attempt to pay off all unsecured debt prior to completing their divorce. If this is not possible then any balance identified as the responsibility of one spouse should be transferred to an account in their name only.

The reason for these recommendations is because creditors do not have to abide by divorce decrees when it comes to collection efforts. Regardless of a divorce document, a bank may pursue payment from either spouse if they were both listed on the account.

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