Ending a marriage is rarely easy, and the desire to get through the process as quickly and painlessly as possible sometimes leads divorcing spouses in Illinois to make financial decisions that haunt them for years to come. Many of these poor decisions are made during property division negotiations when assets such as real estate or automobiles are discussed. This is because these assets are often financed with loans that both of the spouses involved have signed.
While the spouses who receive these assets may vow to keep making the payments on time, the spouses who cede ownership of them will remain legally responsible if they do not. This is because lenders are not bound by, and will generally not recognize, the provisions of divorce settlements. When jointly held loans fall into arrears, lenders will pursue all of the individuals who signed the original documents regardless of the decisions made during property division talks.
One of the biggest problems with this type of arrangement is that divorced spouses may not learn about delinquent loans until the damage has been done and their credit scores have been compromised. Lower credit scores make future borrowing more difficult and more expensive, and it can take years to repair the damage.
These problems often manifest themselves in contentious divorces, and it is not unknown for malicious divorcees to stop paying jointly held loans just to damage the credit ratings of their former husbands or wives. Experienced family law attorneys may have encountered such situations before, and they may urge their clients to protect their credit ratings by requiring that all jointly held accounts be closed and any jointly held loans be paid off. When this firm line leads to an impasse in property division discussions, attorneys may represent their clients in court.