According to the Institute for College Access and Success, college students who took out loans and earned bachelor's degrees in the year 2012 graduated with approximately $29,400 in educational debt. Many of those young men and women then get married, toting their expenses into the marital relationship. In community property states, many students assume that the debt that they brought into the marriage is now a shared burden. A spouse with $40,000 in debt may automatically assume that his wife is responsible for the debt as much as he is, or assume that at the time of a divorce the wife would have to take $20,000 of debt with her when she leaves.
In many relationships, this assumption about shared debt is a misconception. Shared debts typically only apply to debts that were accumulated after the marriage ceremony. This means that all debts prior to the marriage solely belong to the spouse who accumulated that debt. Unless there is a contractual agreement which shifts all debts into marital property, all student loans that were taken out prior to the marriage belong only to that student. This can come as a rude awakening to individuals who thought that they would be dividing their debt when they separated from their spouse.
Oftentimes in marriages, generous spouses will offer to help pay off student loans, even if they are not legally obligated to do so. When a divorce occurs, chances are that the ex-spouse will no longer provide financial assistance. Some ex-spouses say that it is an extreme challenge to deal with debt all by themselves once they are done with divorce. One woman says that she had to reallocate all debt and change the repayment terms to make the loans more manageable.
Even if a couple was living together when the student loans were acquired, but they were not married, then the individual who took out the loan can expect these same results. This is because the court sees couples that are living together similar to roommates. Without a legal marriage license, the partners don't have any legal obligation to accommodate the other in financial difficulty.
Debt division does get harder to determine if one spouse took out student loans during the marriage. The person responsible for paying these loans isn't necessarily the one who took them out. Educational debt accumulated during marriage is divided depending on where you live and who has benefitted from the borrowed finances. Sometimes, the courts will take into account which spouse has a better chance of paying off the debt and how each spouse has benefitted from the schooling. Generally, student loans will still go to the person who accumulated them, but there are some very rare exceptions.
If one spouse has a high income after divorce and the other would struggle to cover the debt payments, then the courts may decide that the higher-earning spouse will need to pay spousal support which will cover the cost of the debts. Debt division often varies depending on whether the state applies marital property, equitable distribution or community property rules. In some circumstances, the courts may deem it fair to just split the debt right down the middle, even if one spouse did not benefit from the debt at all.
You should talk with an attorney if you are concerned about how student loans will affect your debt division at the time of the divorce. Use this directory to locate a family lawyer nearest you and set up a consultation. You can then discuss the terms of your marriage and how the debt was accumulated and learn more about how it will be split.