The Chicago Family Law Blog

Debt Division, Including Student Loans, in the Divorce

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Someone’s getting saddled with that Macy’s card bill. And that Greek Literature Ph.D.? She ain’t paying for it. No really, she’s not, because it has served literally no purpose whatsoever since she got it!

At least, that’s his argument.

Her argument would be that the Macy’s card was used to furnish the marital bedroom, so it benefited both of them. As for the degree, it wouldn’t have been so worthless if he hadn’t forced her into being a stay-at-home wife by refusing to move to Indiana.

Yeah, it can get a little crazy in Family Law, especially when it comes time to divide the assets and liabilities.

Illinois, as an equitable distribution state, divides debts according to what the judge finds is fair and equitable. This means she’ll take everything into consideration - including the beneficiary of the debt and the ability of the parties to pay the debts back - before deciding who owes and owns what.

Because the decision is so fact-based, it’s impossible to outright tell you who will be assigned what. (That’s doubly true for a blogger that never met you.) Nonetheless, here are some general guidelines that will be considered.

Who Benefited?

If it’s a credit card in her name only that was used to buy her a few new pairs of Jimmy Choos, then that debt is probably going to be assigned to her. On the other hand, if it was used to purchase their child’s clothing, it’s far more likely to be split between the two parties.

For student loans, it’s equally complicated. Obviously, only one person directly benefits from a student loan. That would be the person with the degree. However, if the degree was obtained a while back, and the income derived from the degree was used to support the family, the degree has now benefited both parties. That’s the point where the judge might end up splitting the student loan bill between both parties.

I Can’t Afford It!

The court’s mission is to do what is equitable, fair, and just. Judges do not want to saddle someone with thousands of dollars in debt and no income. Often times, the judge will consider each person’s debt to income ratio, and ability to repay.

Joint Accounts versus Single Accounts

Just as there is marital property and separate property, there can be marital debt and separate debt. For example, if you have an outstanding debt from before the marriage, you’re probably not going to get away with having your soon-to-be ex pay half of the tab.

On the other hand, if you have a joint credit card that has various charges from both parties, the judge is probably not going to go item by item and divide up by who purchased what and who benefited. They’ve (probably) got better things to do. In situations like this, where the debt is so commingled, it will likely end up being split on equitable grounds.

Related Resources:

  • Consult a Chicago Family Law Attorney (FindLaw)
  • Divorce Property Division FAQ (FindLaw’s Learn About the Law)
  • Credit and Divorce (FindLaw’s Learn About the Law)
  • Divorce and Property (FindLaw’s Learn About the Law)

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