Managing finances after a divorce is often a daunting task, especially if the money coming into your household is less than when you were married. Although it’s hard to get by in today’s economy, you can take control of the situation to be financially stable.
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How Is Debt Divided in a Divorce in Illinois?
Debt that was incurred during the marriage is considered shared debt and is split between the spouses. Any debt that either spouse incurred before the marriage is considered their own responsibility. For instance, credit cards that were opened before the marriage and are in one spouse’s name are personal debt, while credit cards that were opened after the marriage by the couple are marital debt.
Factors family law courts consider when splitting debt in an Illinois divorce include specific needs for either spouse, length of the marriage, and which awards and assets each spouse is already receiving. Also, the nature of purchases made on a credit card might be considered in establishing whether they’re related to the marriage.
Illinois is an equitable division state. This means that instead of splitting debt 50/50, the debt is divided fairly between the spouses. Courts divide debt fairly by considering who is more responsible for the debt incurred. However, debt might be balanced out and made fair through property and asset division. It’s more likely that if one party receives a certain asset, such as a car, they also receive the debt linked to that asset, including car payment.
It’s essential to note that both you and your spouse are still responsible for the debt, and if your spouse can’t make payments, creditors will pursue you. Thus, it’s often advisable to pay the marital debt before the divorce process so that debts aren’t a contentious issue in divorce determinations.
How Do You Protect Yourself in a Divorce Financially?
During the divorce process, you must protect yourself and your children. A crucial part of this is making sure you protect your finances as well. The last thing you want to do is make a mistake that may cost you your home, savings, or retirement accounts. Until your divorce is finalized, follow these six tips to keep your money safe. If you don’t, you may struggle to pay for the next stage of your life.
- Identify your assets and clarify what’s yours. Before you proceed with anything else, you must identify how much money you have and where it is. Next, establish what’s in your name and what belongs to your spouse, including any bank accounts, investments, mortgages, and other assets. Thus, it’s crucial to get current financial statements of what you own and get things clarified.
- Make Copies of all your financial statements. Get everything in writing. Because while a family law court may not care about evidence of your spouse’s affair, it will care about proof of your assets, so document this information as soon as possible. Print every financial statement, including bank account statements, brokerage firm statements, tax forms, and any financial document you have signed in recent years.
- Secure certain liquid assets. The last you want is for a bitter spouse to leave you with no money, this happens quite often. So be proactive. If, for instance, there’s a joint bank account, set up a separate account in your name and move over certain assets. Don’t empty the account, but make sure you get enough money to cover your bills until you hire an attorney. Otherwise, the only way to get financial access is by holding an emergency court hearing to get temporary alimony or temporary child support.
- Know your state laws. Divorce laws vary from one state to another, starting with no-fault versus fault states, so it’s crucial to know exactly what you’re walking into. If you live in equitable distribution states, such as Illinois, marital assets and debts incurred by either party during the marriage will be divided fairly between you and your spouse. However, separate property, including anything in one spouse’s name, property accumulated before the marriage, property gained as a gift, or inheritance is not taken into consideration during marital property division.
- Build a team. Apart from hiring a family law attorney, it’s also crucial to hire a trusted financial adviser, especially if your spouse was the one who primarily handled financial matters during your marriage. Even though you’re familiar with finances, it’s still essential to have an experienced family law lawyer and a financial adviser on your team. Divorce is often an emotional experience, so it’s essential to have non-biased parties to represent you and protect your rights and interests.
- Decide what you want and what you need. Often, when you go through the divorce process, attorneys are interested in reaching an agreement for you to have a settlement. And most divorce attorneys ask, “Can you live with this? Can you deal with this?” The attorney is doing his or her best to get the best deal or settlement for their client. However, if you don’t know what you need long-term, you might agree to a settlement you can’t deal with in the long run. Thus, what sounds like a substantial settlement amount at that time could fall incredibly short later. Analyze your finances and ask yourself, “How much do I need to maintain my standard of living? How much money do I need to support my kids?”
Can You Empty a Joint Bank Account Before Divorce?
With a joint bank account, you and your spouse “own” the account, and both of you have equal rights to the funds in that account. So, regardless of who deposits the money and how much, either you or your spouse can technically empty the account at any time. However, during divorce proceedings there can be nuances.
During divorce proceedings, the family law court considers funds and assets in joint accounts to be marital property. This means the money belongs to both parties–even though only one spouse made most of the deposits.
However, if you take money from your joint bank account without notifying your spouse and you file for divorce, or if you withdraw from the account against a court order, you might face legal repercussions. Depending on the situation, the court may order you to replace the funds and pay additional fines. Sometimes, if the divorce has already been filed and the statutory injunction is in place, you might be charged with criminal contempt.
Additional penalties may include adjusting the division of marital assets and property. For instance, if you withdraw and spend $50,000 from your joint savings account and you file for divorce from your spouse. The court may penalize you by awarding your spouse $50,000 worth of marital assets and property that you’d otherwise have received in the divorce agreement.
Contact Our Family Law Attorneys Today for Legal Advice!
Often, property division is a source of disputes during divorce proceedings. Each spouse wants to make sure they get a piece of the marital estate they deserve. Getting the guidance of an experienced divorce attorney can help you achieve a fair property division.
At Tommalieh Law in Orland Park, Illinois, we can protect your interests during divorce and property division. With many decades of extensive experience in family law, we have helped our clients achieve favorable outcomes and we can help you as well. To learn more about how you can protect your finances during divorce, call us today at (708) 232-0017, or chat with us online.