Can a Postnuptial Agreement Protect Me From My Spouse’s Debt?

In the United States, 50% of American couples will find themselves in the midst if a divorce. It is important for couples to understand how to protect individual rights and assets if and when the time comes to split. A postnuptial agreement can protect men and women in a divorce, but what about protecting a person from debt?

This blog will explore the differences between a prenuptial agreement, a postnuptial agreement, and discuss how debt division can work in the state of Illinois.

What is a prenuptial agreement?

 A prenuptial agreement between spouses is a legally binding document establishing each spouse’s financial rights and obligations in the event of a divorce. The prenup process typically involves parties disclosing their financial situation, including assets and debts. While the idea of a prenup may not be romantic, it can provide peace of mind in knowing that your finances are protected during a divorce. 

If your partner has accrued considerable debt, a prenup can protect you from becoming responsible for this debt if you divorce. While some couples view a prenup as a sign that they are not committed to their marriage, it can be an intelligent way to protect themselves financially.

How does a postnuptial agreement work?

A postnup is a legal document that outlines how assets will be divided in the event of a divorce. It can also be used to protect both parties from debts incurred during the marriage. While postnups are not as common as prenups, they can be just as helpful in protecting your financial interests. If you’re considering a postnup, it’s essential to remember how it will work with debt. In general, a postnup works similarly to a prenup. However, there are some key differences to keep in mind. For instance, if you and your spouse attempt to transfer assets via a postnup, it could be considered fraudulent. 

Additionally, a postnup does not free you from third-party creditors collecting on debt that your spouse incurred on their own. These are essential factors to consider when drafting a postnuptial agreement.

How does divorce work with debt?

Once a couple decides to divorce, they may also consider their debt. For many couples, debt is one of the leading causes of financial stress, leading to arguing and even divorce. If a prenuptial or postnuptial agreement can’t absolve a person of debt liability, can a divorce do the trick? It all depends on the date of separation. In general, any debt incurred before the date of separation is community debt, meaning both parties are responsible for it. 

Knowledge regarding debt accumulation can be helpful to know if you’re considering divorce and want to protect yourself from taking on your spouse’s debt. However, if you and your spouse have established a date of separation, any debt incurred after that date will be the separate property obligation of the spouse who incurred it. Of course, this is just one aspect to consider when divvying up debts and assets during a divorce – it’s always best to consult with an experienced attorney to ensure that you’re taking all the necessary steps to protect your interests.

Speak to an attorney today about protecting your rights during a divorce

A postnuptial agreement can be an essential tool in protecting yourself from your spouse’s debt in the event of a divorce. However, these agreements can be complex and require the expertise of an experienced lawyer.

The Law Offices of Demetrios N. Dalmares & Associates, Ltd. offer solutions to help you protect yourself from your spouse’s debt. We can help you create a prenup or postnup that will ensure you’re not held liable for their debts in the event of divorce or bankruptcy. Contact us today to learn more.