The Effects of Credit Card Debt on an Illinois Divorce

 Posted on May 10, 2021 in Property Division

In large part, getting a divorce is a financial transaction that requires the couple to fairly divide their marital assets and debts. This can include everything from the marital home and the associated mortgage, to bank accounts, retirement savings, vehicles, and household items. However, one of the most contentious subjects for many couples is how to handle credit card debt. If your marriage and finances are currently struggling, here are some things you should consider.

Credit Card Debt is a Common Cause of Divorce

A recent study shows that divorce is up to 30 percent more likely for married couples who argue about finances, and credit card debt is a common focus of such arguments. Unlike a mortgage, credit card debt can accumulate due to a spouse’s irresponsible spending habits, sometimes before the other spouse even realizes what is happening. This can contribute to mistrust and resentment that ultimately leads to irreconcilable differences. If you hope to have a chance of saving your marriage, working together to manage your debt may be your best option.

Most Credit Card Debt Will Need to Be Divided

If you do proceed with a divorce, you should know that in most cases, all credit card debt incurred by either spouse during the marriage will be part of the division of marital property. This includes debt from joint credit card accounts, as well as debt from individual accounts in each spouse’s name. You may be able to prepare for your divorce by paying off as much debt as possible ahead of time. For any debt remaining, you will likely either need to fairly divide it between you and your spouse, or offset it through the distribution of assets. In either case, you should try to update your accounts to prevent a situation in which both spouses are still liable to creditors.

Credit Card Debt Could Qualify as Dissipated Assets

You may be entitled to a remedy for your spouse’s accumulation of credit card debt if you can make the case that it constitutes the dissipation of marital assets. However, this is only possible for debt incurred after your marriage started to break down, and within no more than five years of your claim of dissipation. Furthermore, you can only claim dissipation if you did not benefit from the spending, or in other words, if your spouse made credit card purchases solely for their own benefit or purposes outside of the marriage.

Contact a Wheaton, IL Divorce Attorney

At Davi Law Group, we know that excessive credit card debt is incredibly stressful throughout a marriage and during the divorce process. We will help you understand your options for addressing it in your divorce resolution to protect your financial interests. For a free consultation, contact our DuPage County debt division lawyers at 630-657-5052.

Sources:

https://www.nbcnews.com/better/business/want-marital-bliss-divorce-debt-not-each-other-ncna948131

https://www.experian.com/blogs/ask-experian/who-is-responsible-for-credit-card-debt-in-a-divorce/

https://creditcards.usnews.com/articles/how-credit-card-debt-is-handled-in-divorce