My family helped me with paying a considerable amount of money to fix several severe structural issues and then some windows on the "marital house". I have not paid them but $1000 back as they know my financial situation is not so good. I will have to pay them back but there is no legal document drawn up, it is just based on trust. Do I need a document? I have a copy of the bills and their receipts of payment for these expenses. How will this be considered in a divorce proceeding? My husband does not live in the house nor does he contribute to anything related to the house. In fact, he always said he wants nothing to do with the house but now that he sees possible $$ signs with the modifications made to the home to increase its value, I am worried. I have never asked him for any money to fulfill this debt but if I have to split the net value of the house with him, can I use this debt in lowering what I might have to owe him? I plan to maintain this residence at this point unless I have no choice. I will consult a lawyer but I am looking for some basic thoughts here.
Your question raises two issues; a) any improvement you made to the marital home, b) how the court will look at the debt. I will address (b) because there's insufficient information to address (a) at this point.
In regards to the debt, that will depend on a variety of factors, to include who your judge is. Some judges are very skeptical of family loans if there's been virtually zero effort to repay it (Because, perhaps, they feel it's really a gift that's being argued as a loan to "game" the division of assets/liabilities). You indicate only $1000 was repaid, and there is no written document indicating terms and conditions - this isn't uncommon in inter-family lending, however other factors such as the number of installments you've paid, how long ago it was taken out, and if more than one, how often you borrowed. Other factors will be whether your ex was "aware" of it (You'll be surprised how quickly people get amnesia in family law).
The Illinois statute that addresses division of property & debts is 750 ILCS 5/503; it's wordy, but worth a read.
Contact a family law attorney in your area for specific guidance.
Loans from relatives that are not documented, are always problems. In an ideal world, there would be a second mortgage recorded on the property representing the amount borrowed. However if you have bills and receipts which are tied to cancelled checks, that would establish the amount invested. So would copies of bank statements showing withdrawals of cash which was given to you. If cash from someone's shoebox was the source of the funds, you gave a problem. So long as you can establish the loans, they would reduce the equity in the home and would reduce what is needed to buy your husband's interest in that home. Discuss with your attorney.
You should definitely consult with a lawyer. It may be best to memorialize the obligation in a formal promissory note but that depends on the facts and circumstances. Regardless, the obligation. certainly should be a factor and considered in determining the equity in the residence.
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