Marital Debts and Income Disclosures

Marital Debts and Income Disclosures
By: M. Scott Gordon

Let's talk about Martial Debts and Income Disclosures.

Debts incurred during the marriage prior to separation are usually joint obligations, as long as the debts were incurred for the benefit of the marriage and or Family. Along with Property Division, these obligations will need to be divided by the court “equitably”. Typically, the court will want to use marital assets to pay down marital debts. With the marital residence, if the debt on the Marital Residence exceeds the value of the property, the court will generally order the property sold on a short sale (in order to hopefully avoid foreclosure), unless one party is willing to assume all of that mortgage debt and retain the home. The party retaining the home would be required to re-finance the mortgage on the home and remove the other spouse name from the mortgage by a certain date.

What about debts that are in your name, but were incurred by your spouse for a non-marital purpose?

If you can convince the court that the debt in your name should be paid only by your spouse, the court can order your spouse to assume that debt. The problem that may arise is that your spouse is unable to remove your name from the debt that is being assumed. All the divorce court has the power to do is order your spouse to pay the debt and make his/her “best efforts” to remove your name from the debt. This is often an issue with a car loan. In this example let’s say your spouse keeps a car, but your name is on the loan. Your spouse can be ordered to make the monthly payments, but the court has no power to order the lender to remove your name from the loan.

Asset and Income Disclosures

 

All parties going through a Divorce in Cook, Lake and DuPage Counties are required to complete a disclosure statement (in Cook County and DuPage County) or Financial Affidavit (Lake County). These are documents where each party fills out a court form which sets forth that party’s monthly income and monthly expenses, as well as a brief statement of assets and debts. This usually is each Attorney’s first opportunity to get a “glimpse” of the other party’s financial situation. 

After the exchange of those disclosures, attorneys will almost always issue “discovery”. In fact, discovery cannot be issued by a party until they tender their disclosures. Discovery includes Interrogatories (written questions to be answered under oath), Document Production Requests (a detailed list of various documents to be produced, such as bank statements, credit card statements, etc.), and other inquiries, such as Subpoenas, Depositions, etc. All of these tools available to your attorney will help him/her advise you properly as to the distribution of assets and debts, and also with regards to support issues.

If you have any questions regarding this blog, the information included or you would like to speak with an Attorney at M. Scott Gordon & Associates regarding your case feel free to contact us here, or call one of our offices to see how we can help. Family Law Advocate Skokie Office 847-329-0101, Chicago Office 312-360-0250.