Allocating Marital Assets and Debts

August 14th, 2025 by Tiffany Hughes

Dividing property during a divorce in Illinois can be a complex process, requiring a clear understanding of what qualifies as marital property and how it should be distributed. Illinois follows the principle of equitable division when dividing marital assets and marital debts, focusing on fairness rather than an equal split. Below, we explore how assets and debts are classified and divided under Illinois law.

What Assets Are Considered Marital?

In Illinois, marital assets include property and income acquired by either spouse during the marriage, with some exceptions. Common examples include:

• Earnings from employment during the marriage.
• Real estate purchased together.
• Contributions to retirement accounts or pensions during the marriage.
• Shared investments or savings accounts.

However, some assets are deemed non-marital, such as property owned before the marriage, gifts or inheritances received by one spouse, and items excluded through a valid prenuptial or postnuptial agreement.

What Debts Are Considered Marital?

Similarly, debts incurred during the marriage are typically regarded as marital debts, regardless of whose name is on the account. These may include:

• Mortgage balances or home equity loans.
• Credit card debt accrued for household or family purposes.
• Loans taken for significant joint purchases, such as vehicles or appliances.

Debts acquired before the marriage, such as personal loans or credit card balances, are generally the sole responsibility of the spouse who incurred them unless the funds directly benefited the marital estate.

Asset Division in an Illinois Divorce

Illinois courts apply equitable distribution, considering factors like:

• The duration of the marriage.
• Each spouse’s contribution to acquiring and maintaining marital property.
• The financial circumstances of each spouse post-divorce.
• Any valid agreements, like a prenuptial agreement.

For example, retirement accounts and pensions earned during the marriage are typically divided equitably. However, contributions made before the marriage remain non-marital property. The division process may involve deferred distribution, where the court orders division at a later time when the benefits are accessible.

Other types of assets, such as stock options and restricted stock, may be evaluated based on their vesting schedule, purpose, and value during the marriage. Courts aim to ensure fairness while recognizing the unique nature of these financial instruments.

Dividing Debt in a Divorce

Dividing debt is as important as allocating assets, as both directly impact each spouse’s financial future. Illinois courts assess whether a debt is marital or non-marital by evaluating:

• When the debt was incurred.
• How the borrowed funds were used.
• Whether both spouses benefited from the debt during the marriage.

For instance, student loans taken during the marriage may be divided if the resulting education significantly benefited the family. In contrast, loans used solely for one spouse’s personal expenses before the marriage typically remain their responsibility.

Can a Couple File for Bankruptcy During a Divorce?

Filing for bankruptcy during a divorce can complicate matters but may be beneficial in certain situations. Filing together before the divorce:

• Allows for the discharge of joint debts, simplifying property division.
• Reduces the overall cost, as it consolidates legal and filing fees.

However, filing for bankruptcy after the divorce may be appropriate if one spouse’s debts are significantly higher. Timing the bankruptcy filing depends on the complexity of your financial situation and the nature of your marital debts. It’s crucial to consult both a bankruptcy attorney and a divorce lawyer to determine the best approach for your circumstances.

Can Creditors Come After Me for My Spouse’s Debt After Our Divorce?

Even after a divorce, creditors are not bound by the terms of your divorce decree. If your name is on a joint debt or you co-signed for a loan during the marriage, you may still be held responsible for repayment—even if the divorce decree assigns that debt to your spouse.

To protect yourself:

• Close or separate joint accounts as soon as possible.
• Monitor your credit report to ensure debts assigned to your spouse are being paid.
• If your spouse fails to pay, creditors may pursue you for the balance.

It’s wise to address these concerns proactively during the divorce process and consult with your attorney to minimize financial risk.

Navigating Asset and Debt Division

Whether they are addressing the classification of marital assets or determining the fairest way to divide debts, Illinois courts strive to create equitable outcomes. This process often involves careful negotiation, financial analysis, and sometimes litigation.

By understanding the distinctions between marital assets, and debts, and non-marital assets and debts, you can better prepare for the division process and protect your interests. If you have questions about how your marital and non-marital assets and debts may be divided, consulting an experienced Illinois family law attorney is essential for navigating these complexities.

Need More Information or Representation?

If you are getting a divorce in Illinois, give The Law Office of Tiffany M. Hughes, P.C. a call today at 773-893-0228 for a confidential, complimentary 30-minute phone consultation or email Tiffany Hughes directly at Tiffanyhughes@thugheslaw.com. Our entire practice is solely dedicated to the area of family law. We are highly experienced in providing legal representation to anyone who is getting a divorce, who wants to achieve a fair divorce settlement, who wants a fair division of marital assets, who wants to learn what debts are considered marital or what assets are considered marital, whose spouse concealed debt during the marriage, and who wants to learn more about asset division in a Illinois divorce.

About Tiffany M. Hughes, Divorce Attorney, Principal, Managing Partner, The Law Office of Tiffany M. Hughes, P.C.:

Tiffany M. Hughes is a divorce attorney and Managing Partner of The Law office of Tiffany M. Hughes. Recognized as a Top 100 Lawyer in Lawyers Magazine in 2018 and 2019, Super Lawyer from 2016 to date, and in addition to numerous other accolades, Ms. Hughes represents individuals in all aspects of family and matrimonial law proceedings, including litigation, mediation, allocation of parental responsibility (formerly known as custody), parentage, divorce and other child-related matters.

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This blog is made available by The Law Office of Tiffany M. Hughes, P.C. for educational purposes only as well as to give you general information and a general understanding of Illinois law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and The Law Office of Tiffany M. Hughes, P.C. The website should not be used as a substitute for competent legal advice from a licensed professional attorney in Illinois.  The law changes constantly and we do not go back in time to edit old posts that may be affected by these changes.  If you have any questions about Illinois law, which is the only State this blog and website discusses, please call The Law Office of Tiffany M. Hughes, P.C. for a complimentary phone consultation and do not draw any legal conclusions without speaking to a competent attorney in Illinois first.