After a divorce, neither spouse is legally liable for any debt incurred by the other spouse. The possibility of one spouse racking up considerable debt during a prolonged divorce proceeding is one of the most important reasons to hire a licensed FDCPA lawyer to expedite resolution of the divorce. Common Law
Joint credit cards and mortgages are two common sources of divorce debt. After a divorce, if both spouses’ names are on an account, creditors can come after either spouse when trying to collect. Indeed, having these accounts go to collection can hurt both spouses’ credit scores. Therefore, it is important to understand the settlement process to make sure that you’re being treated fairly. Consulting an attorney can ensure that your interests are best represented throughout your divorce settlement and after.
Other states operate under equitable division laws. Equitable division does not mean that spouses will necessarily receive half of everything. Rather, the court will determine what is a fair, reasonable and equitable division of debts and assets, taking into account what each spouse brought into the marriage.
Therefore, it is important to understand the settlement process to make sure that you’re being treated fairly. Consulting an attorney can ensure that your interests are best represented throughout your divorce settlement and after.
There are many considerations the courts make in deciding how to split debt in divorce. In general, if your debt was taken on at some point throughout the marriage, it is considered shared debt and will be split between you and your ex. If either of you came into the marriage with debt, that debt would still be your own responsibility.
The courts may balance out debt through distribution of assets. If one spouse receives a particular asset, such as a house, they usually also receive the debt associated with that asset, such as the mortgage payment.
In general, if you and your spouse have co-signed for debt during your marriage, the debt is the joint responsibility of both. These types of debts are most often incurred from loans, such as mortgage and vehicle loans, joint accounts, and credit cards.
If your debt is overwhelming, you might be able to use joint savings or take a home equity line of credit in your home to help, or even consider filing for bankruptcy.
If you cannot agree, make a list of all joint credit cards and accounts and cancel them before the divorce to prevent your spouse from racking up more debt. File documents with the courts stating the debt for both parties.
If the cardholder spouse benefitted from the purchase alone, the debt would probably be classified as separate, but if both spouses benefited from the purchase, the debt would be considered as marital.
In Illinois, debts are classified as “marital” or “separate, or non-marital.” Marital debt includes most debts incurred during the marriage and before the date of separation — regardless of which spouse’s name is on the debt, and these are shared debts that the courts will divide. Debt that either spouse incurred before the marriage is considered non-marital and remains their own personal responsibility.
Being in debt over your head can be overwhelming. Finding a debt collection attorney to help can also be difficult.
A debt collection lawsuit is filed by a creditor when you do not pay the debt you owe. A creditor can file a lawsuit seeking a judgment against you.
The creditor can take further action to collect the judgment after it obtains a judgment. A debt collection attorney can try to help you fight these actions.
If you could not afford a debt collection attorney, you may have judgments against you. Even if you could afford a debt collection attorney, the creditor would probably win if the debt is valid.
A judgment in a Chapter 7 bankruptcy case is an unsecured debt. Most unsecured debts are discharged in a Chapter 7 case.
If you could not afford to hire a debt collection attorney, you might need to file a Chapter 13 bankruptcy case. Some debtors do not qualify for Chapter 7 because of income requirements.
Most states do not have an automatic procedure for canceling judgments that are discharged in bankruptcy.
A lawyer can help come up with strategies either to get back money that you’ve loaned out or to protect yourself from overeager creditors. Your attorney can handle paperwork for you or represent you in court.
If you’re able to settle outside of court, you and the debtor will be able to negotiate terms. As a debtor you face the same outcomes, but instead of receiving any money, you can expect to pay back the amount you borrowed or possibly less if your attorney is able to negotiate the amount down.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
An inability to pay back loans at the present time. Threat of lawsuit from a creditor. Being treated unfairly by collectors. You may also want to consider a debt settlement attorney who can help reduce or eliminate loans in order to avoid debt collectors.
If you need repayment for a debt and the debtor isn’t paying up, a debt collection attorney can help figure out your best course of action to get your money back. You may also want to consider a creditors rights attorney, who works solely for creditors to help them regain their money.
If you don’t win, your lawyer won’t receive any payment.