These days, most couples, including many here in Illinois, have debts they incurred together during the marriage. Couples divide their debts in a divorce right along with their property. The divorce settlement or decree outlines who is responsible for the payment of each of them. However, that is often not enough to release one party from responsibility for a debt in the eyes of the creditor.

In fact, a divorce agreement means nothing to creditors. They are not party to the document and do not have to abide by it. Creditors consider that if both parties’ names are on the debt, each of them is 100% responsible for the entire amount owed. If the one “assigned” a certain debt in the divorce agreement fails to pay, the creditor can still go back to the other party for payment.

Even individuals who intend to fulfill their obligations under the divorce settlement or decree have financial issues that preclude making the agreed upon payments. In order to obtain some protection from that happening, the party who does not take responsibility for the debt in the divorce may want to take some extra steps to help ensure the creditor will not come back to him or her for payment. Figuring out how to make that happen is the challenging part.

Whatever solutions will work best under the circumstances deserve at least some consideration when dividing debts in a divorce. If the parties are parting amicably, it may be worthwhile to wait to file for divorce until after paying off joint debts and closing joint accounts. Otherwise, a lender may allow one party’s name to be taken off a loan, but it does not happen often, especially if the lender considered both parties’ income to approve the loan. Another solution is to sell the asset or assets covered by loans and split the proceeds. A family law attorney may be able to recommend other strategies that protect the rights of the party not responsible for a particular debt.