Going through a divorce is emotionally draining. And on top of that, there’s the added stress of dividing up all of your assets and debts and figuring out who gets what. When it comes to your student loan debt, you might be wondering if you’ll have to pay it all yourself or if your spouse will ultimately be held responsible for part of it.
All debts incurred before the marriage remain separate property. So if you accumulate $ 100,000 in student loans before marriage, for example, that debt remains yours even after your divorce.
But if your debt was incurred after you got married, things are getting a bit more complicated. Such a debt is considered a marital debt. Each state considers the marital debt as a common good or an equitable distribution.
In communal property states, marital property and debts are divided equally between the two parties. Community ownership states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington state, and Wisconsin. So if you live in one of these nine states, you and your spouse will need to evenly distribute any student loan debt incurred after marriage. California is an exception; even though it is a community property state, student loans are considered separate property.
All other states follow the equitable distribution model. With an equitable distribution, the courts look at it on a case-by-case basis and then decide on the most equitable way to divide the debt.
Here are some things that the courts will take into account in determining the allocation of student debt.
How was the money used? If all of your student loans have been used towards your studies, such as tuition, fees, and educational materials, then the debt is more likely to be viewed as entirely your responsibility.
However, if student loans have also been used to cover living expenses shared with your spouse, then it is more likely that it is a shared debt, and your spouse could be held responsible for part of the debt. the debt.
What role did your spouse play? If your spouse has played a supportive role in your studies, such as looking after the house or driving you around campus, for example, many courts might think that they have already paid their dues and are not. therefore responsible for no debt. .
Do you and your spouse have the same earning power? Another thing to consider is how much money you and your spouse are making. If your spouse earns very little income, the courts are less likely to hold them responsible for a large portion of the debt. This is especially the case if a spouse puts a career on the back burner to support you in your endeavors.
Did you get a diploma? In some states, a degree obtained in marriage is considered marital property. If this is the case, any debt incurred during your graduation is considered a marital debt, which means that it falls on you and your spouse.
Has your spouse co-signed a student loan? Most private student loans require co-signers. If your spouse co-signed a private student loan for you during your marriage, they are also legally responsible for the debt, even after the divorce.
Find the Best Student Loan Refinance Lenders
Dividing student loan debt can be complicated, so the best thing to do is to consult with a lawyer before you begin the divorce process. This way you know exactly what to expect.
Also, talk to a student loan advisor, contact your student loan officer, or visit the United States Department of Education’s StudentLoans.gov site for answers. You should be able to consider existing and new repayment options that may be available to you to deal with debt. For example, with the loss of a second income, you may be eligible for a lower student loan repayment plan. It’s worth doing your research to find out what to expect for your financial future.