Consider Paying Off Debt before Divorce

 Posted on December 00, 0000 in Illinois family law attorney

Every year, thousands of couples in Illinois decide to end their marriages. For many of these couples, dividing assets and debts can be extremely complicated and often becomes contentious. If you find yourself in a deteriorating marriage and divorce seems to be on the horizon, you may want to consider paying off some of your marital debt prior to beginning the divorce process.

Marital Debt

Like marital assets, any debt incurred by either spouse during the course of a marriage is generally considered to be marital debt. As such, marital debt must be considered during the division of property proceedings in divorce. Based on factors prescribed in Illinois law, marital assets and debt are to be equitably distributed between the divorcing parties. For couples with few assets and limited debt, the process is often relatively simple. Those with more property and complicated debt, however, may face increased difficulty.

Liquidate Assets and Pay Debt

Depending on your specific situation, satisfying marital debt before filing for divorce can significantly streamline the property division process. By doing so, you may be able to reduce or eliminate the need for complex calculations to offset assets and obligations.

Satisfying debt can be done in a number of ways, but the most common method involves liquidating certain assets. For example, it may be advantageous to sell your low-yield stock interests and use the proceeds to pay off your car.

Pay Off Debt on Your Terms

While you and your spouse may certainly wait until divorce to address your financial obligations. The inherent danger, however, is that assets and debts may be divided by the court in a manner with which you disagree. You may be allocated certain debts in the process, along with few easily-liquidated assets. In such a case, repayment of the debts is still your responsibility, but now must be done with future income rather than existing assets.

With a proactive approach, you can significantly reduce the amount of marital debt that will be subject to division. The court, then, can focus on dividing the remaining property between the spouses, allowing each to move forward with fewer obligations. In addition, you may also find that the stress and contentiousness of the process is also reduced, as dealing with debt can be extremely difficult.

If you are considering a divorce, it is important that you clearly understand all of the potential financial implications. Contact an experienced DuPage County divorce attorney at the Law Office of Matthew M. Williams, P.C. today. We look forward to providing you with the high-quality legal representation you deserve during a challenging time.