Couples choose to end their marriage for many reasons, including financial problems. Perhaps you were a saver and your spouse was a spender, which caused many arguments or conflicts. Regardless of why you have decided that divorce is your best option, there are many issues you and your spouse will have to resolve before you can legally dissolve your union. Your first thought may be how to divide up your assets and property. However, it is important to remember that any marital debt will also need to be divided before you can finalize your divorce in Illinois.

Debt Allocation in Illinois

When it comes to dividing marital assets, Illinois is an equitable distribution state. This means that each spouse will be allocated a fair amount of the marital estate, including both property and debt. The first step in determining who will be responsible for what is figuring out which assets or debts are part of the marital estate and which ones are considered personal debts. According to the Illinois Marriage and Dissolution of Marriage Act (IMDMA), any property or debts that you and your spouse acquired after your wedding day and before the day you filed for divorce are included in the marital estate. If the debt was accumulated before you got married or after you filed for divorce, it is usually considered individual debt.

Ending a marriage is undoubtedly one of the most emotionally draining situations many people have to face. At this difficult time, it is vitally important to be aware of the negative impact this emotional upheaval can have on personal finances. While working through your separation and divorce settlement process, it is necessary to take proactive responsibility for safeguarding your personal finances and credit score.

Good Credit Is Crucial

For spouses who have not been responsible for bill-paying in the marriage, the transition to successfully managing their personal finances can be challenging. At our firm, we work with our clients to get an overall understanding of their finances so we can help them make smart decisions going forward. One important area of focus involves the personal credit score. Everyone has their own credit score assigned to them by the credit reporting agencies, regardless of if they are single or married. However, for married people, depending on how the couple’s credit and loan accounts were set-up and administered, their individual credit scores may be substantially different.

Divorce can be an expensive process, and there are many financial pitfalls that can further increase its cost. For the wealthy, things are about to get even riskier. Starting in 2019, the tax credits afforded to those paying alimony will be gone, and that can lead to some significant financial losses. The cost is so great, in fact, that many financial advisors are telling their clients to get divorced before the beginning of next year. Unfortunately, this may not be the best option for your case.

For the Love of Money - Rushing Your Case Could Have Severe Consequences

Money is one of the biggest and most frequent sources of contention in divorce - and for good reason. You may already have to scale back your life to accommodate the division of assets that typically occur in a divorce. What is more, you may be ordered to pay alimony to your former spouse. Should this happen, you may want to try and avoid the loss of the tax credit.

Separating your finances and assets in a divorce can be a contentious and downright frustrating process. Matters can be made worse once parties learn that a divorce decree does not protect them if a spouse fails to make timely payments on a joint credit account. Thankfully, it may be possible to reduce the risk of long-term credit and financial damage after divorce. Learn how, and discover what an experienced divorce lawyer can do for you, with help from the following.

The Truth About Debt and Divorce

While most people recognize that assets are divided in a divorce, not everyone realizes that debts must also be divided. To determine who owes the debt, the courts will examine several different factors, including who benefited most from the debt and who originally took out the line of credit. Debt is then assigned to the parties, much like assets, but that is where the similarities between debts and assets end.

Although alimony is not awarded quite as often as it used to be, it is still a factor in some divorces. On one hand, alimony may balance out the financial struggle that a disadvantaged spouse faces after divorce. Yet, on the other, there are tax implications that could present a potential issue. Learn more about alimony and taxes with help from the following.

Taxes are Governed by the IRS

Some spouses believe they can mitigate the tax implications of alimony payments by speaking to the court. Unfortunately, this is not accurate. Taxes are governed by the Internal Revenue Service (IRS), not the courts. As such, spouses should discuss any concerns they have over the tax implications of alimony with their financial advisor, and their attorney.