If going through a divorce isn’t stressful enough, part of this process includes dividing up your assets—this includes your student debt. There are certain things you need to be aware of that can affect how your student loan debt is divided up. First and foremost is when you took out your loans relative to when you got married.
Taking on Student Loans Before Marriage
Any student loan debt that you took on before you got married will be considered separate property and is solely your responsibility. Moreover, this goes for any debt that was taken on by your spouse prior to marriage—but here is the kicker. If either of you took on this debt after you were married, then it will be considered as shared property, and it will have to be divided up along with all of your other financial assets that you share.
How Much Gets Divided?
Now, if your student loan debt is shared property, the amount that gets divided between you both will vary depending on your respective state’s laws. If you live in a community property state, that means that everything, including student loans, is split right down the middle. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—all of the other states are equitable distribution states. As noted by “Does Divorce Affect Your Student Loans?” by Wise Bread, the court will still hold a person liable for half of the debt even if it would bring financial hardship upon them.
However, if you live in an equitable distribution state, then” your spouse as the legal right to claim a fair and equitable portion of those assets” according to Bedrock Divorce. This could still result in a 50-50 split or could mean one person is held liable for a larger portion of the debt. For instance, if the court determines that one person will make more income than the other, then they may rule that this person will have to provide temporary spousal support to help pay for their spouse’s debt according to The Wall Street Journal.
Consolidated Loans Before 2006
If you consolidated your loans before 2006, then you are each responsible for the loan. This really only applies to couples married before 2006, and who consolidated their loans. Congress eliminated joint consolidation of loans in 2006, so if you were married after then you don’t need to worry. And even if this was still available, it isn’t the most advisable course, even with a lower interest rate, for it greatly reduces your flexibility.
Figuring Out How Much Debt You Will Be Responsible For
If you took out your loans before you got married, then you are solely responsible for that debt. However, if you took them out after you got married, then it comes down to what state you live. It could be divided 50-50 or it could be divided more in favor of one person or the other. If you are held responsible for the debt, it is imperative that you do continue to pay off that debt for if you chose not to because you don’t feel you are responsible for it, it can affect you negatively financially.