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Creditors Rights

Question: About a year and half ago I signed a quit claim deed to my ex husband for the house as part of our divorce settlement. He lives there. I moved. We are still both on the mortgage. I have missed payments on my credit cards. If I get sued, do creditors have any claim on the house?

Answer: No. Generally, only the person who obtained credit can have a judgment entered against them, and a judgment is enforceable only against that person’s property.

There are a couple of qualifications. If property is transferred for the purpose of defrauding creditors, the transfer may not be effective. A divorce settlement would not fall into this category. Also, Illinois has a Family Expense Act that makes each spouse liable for the necessary expenses of the family, while they are living together. It is unclear if this even applies to a lender, as opposed to a merchant who provides goods and services. Also, under Federal law one spouse has the right to obtain credit without the involvement of the other spouse, and this probably preempts the state law.