Does anyone know what happens with your debt when you get a divorce (large debt)? If you have debt that has gone to a collections agent, how does it work during a divorce. We are talking large debt in the $30,000-$40,000 range, in addtion to have a home that was in foreclosure ( couple was given money to get out of that, so not sure what kind of equity they would have if any). I'd appreciate any info!
Generally speaking, both parties remain equally responsible for the debts for which they were both signers. The debt is often divided just like property in terms of who will pay. Unfortunately, unless the debt is re-financed into a single party responsible, the other spouse remains responsible until the debt is paid off.
If they both signed on the mortgage, the foreclosure will remain on both credit reports.
Typically speaking, all debt incurred during the marriage is split equally. Sometimes, however, in order to "balance" things better... one spouse assumes all the debt. But what usually happens is that the debt is split and then things are balanced.
I think with IL law is doesn't have to be split 50/50. I guess it also depends on what the lawyers can get both parties to agree on. My mom just wanted out and split the debt with my dad. He took some credit cards, while she took the others. Try a search on IL divorce laws. But anything left in lets say wife's name that is to be paid by husband and husband stops paying, it will affect the wife if still in her name. My dad had to re-finance the house to just his name and pay my mom the equity owed to her.
I believe it is split equally, if the debt was created within the marriage.
if you are speaking about your how it works on your credit report, it will depend on if it's a joint account. If most of the debt is in your husband's name and you aren't a joint user, then (on your report), it will not go against you.
I do know that it will be split. But how it gets split depends on a lot. Just to let you know I am liscensed in the finance industry. I help families budget and put together complimentary financial plans and provide them with financial education. A few of my clients are going through divorces and I helped them with seeing where they are exactly with their finances, if I can save them $ somewhere, making sure they're properly protected. And I keep up with any financial changes made by the divorce. I have also personally worked with a number of families, schools and organizations. They have given me nothing but great comments on my services. If you would like to work with someone personally maybe we can meet for coffee somewhere and I can show you how I have helped other families and how I could possibly help yours.
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