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Should You Pay Off Your Marital Debts During Divorce?

Posted on April 30, 2020 in Division of Assets

Should You Pay Off Your Marital Debts During Divorce?Figuring out how you will divide your marital debt is one of the many important tasks you must complete during your divorce. As part of your divorce agreement, you can determine which debts each of you will be responsible for repaying. You also have the option of repaying your debts during or even before your divorce. Getting rid of the debt would relieve a financial burden on your life after divorce. However, it is possible that repaying your debts is not feasible or the best choice in your situation. There are several questions you should answer before deciding whether to immediately repay a debt.

Is It a Marital Debt?

The simple definition of marital debt is one that you entered into while you were married, but other factors can determine who is responsible for a debt, such as:

  • Whose name is on the loan agreement
  • Who has benefited from the loan

If you and your spouse are equally liable for the debt, paying it off immediately could be a prudent decision. You should not repay your spouse’s separate debts before you start your divorce negotiations. Instead, you can save it as a bargaining chip by offering to help repay the debt in exchange for marital assets.

How Would You Repay the Debt?

Paying off debt may be worthwhile if you already have the liquid assets available to afford it. It may not be worth it if you would have to liquidate valuable assets, such as your retirement benefits. Some debts are too large to be able to repay all at once, such as a mortgage. Proceeds from selling your marital home could in part go towards repaying your debts. However, it is also possible that holding on to your home will be more valuable to you than selling it.

What Kind of Debt Is It?

If you need to prioritize which debts you will pay off, debts with higher interest rates should be first because you will save money by repaying them now. Credit cards and consumer loans are common examples of debts that can have high interest rates. If a loan has fixed payments, paying it off over time will not cost you any more than if you paid it now.

Contact a DuPage County Divorce Attorney

Before you make any decisions about paying your marital debt, you should consult with your attorney. A Naperville, Illinois, divorce lawyer at Calabrese Associates, P.C., will advise you on the advantages and disadvantages of immediately paying off your debts. Schedule a consultation by calling 630-393-3111.


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