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Dealing with joint credit cards during a divorce

When people in Illinois think about divorce, the financial implications may weigh heavily on their minds. The end of a marriage can lead to complex financial decisions, including the division of real estate, retirement accounts and other significant assets. At the same time, the division of debt, including credit card debt, can be one of the most important issues to address in a divorce. Because Illinois is not a community property state, credit card debt accumulated by one partner is not automatically assumed to be marital debt. However, if that debt was accumulated for the benefit of both or the other partner, it could still be assessed as a marital responsibility during property division.

On the other hand, many couples maintain joint credit cards. The debt associated with these cards belongs equally to both of the joint holders of the account. It can be particularly important to handle this debt before the divorce is finalized. In the first place, divorcing couples will want to close any outstanding joint cards to prevent more joint debt from being accrued. However, existing joint debt, because it belongs to both parties, should be fully reassigned.

Both parties may negotiate responsibility for paying the debt as part of the divorce agreement, but as long as the debt remains in the name of both parties, creditors can pursue both equally for the balance, especially in case of default or bankruptcy. Therefore, joint credit card balances should be paid off as part of the division of assets or transferred to the name of only one spouse.

The financial decisions associated with divorce can be confusing to many people looking to rebuild their assets after a split. A family law attorney may work with a divorcing spouse to reach a fair settlement on major issues, including property division and spousal support.

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