Credello: Divorce is a difficult and complicated process, full of uncertainties and unknowns. But one thing that is generally certain is that the financial obligations between spouses will change after a divorce. Unfortunately, student loans and divorce is a popular-yet-messy topic many people facing a legal separation need to consider. So how does it work when you're in debt from student loans while getting a divorce? Here's what you need to know.
A primer on student loan debt
Student loans are a popular way to pay tuition and education expenses for continuing education. Typically, two student loan options are available for most students: government and private.
Some government student loans can be forgiven or have their balances lowered. Most recently, President Biden forgave $10,000-$20,000 in student loan debt for qualified U.S. citizens. Other federal programs can reduce your loan balances in exchange for certain careers, such as teaching.
Both government and private loans cannot be discharged during a bankruptcy filing and will most likely need to be paid off in full. Few companies that offer private student loans will allow debt settlements or reductions in balances due to hardship.
How student loan debt works in a divorce
When you get divorced, all of the debts between you and your spouse become legally separate. This means that each of you can deal with your own debt, including student loans.
Basically, this means that if one spouse has student loans, the other can't discharge them in a divorce. However, this doesn't mean the other spouse must keep paying off the loans.
Instead, the responsibility for those debts shifts to the divorcing spouses fairly and equitably. This means that whoever is responsible for the debt at the time of separation is responsible for continuing to pay it off after the divorce.
Student loans are one of the few debts that cannot be discharged in a divorce. This is because student loans are considered an "essential expense" for most students and are often used as a form of credit to help pay for college. In other words, your ex-spouse can't just demand that you pay off your student loan debt to get custody of the children or receive financial support from you during the divorce.
That said, there are some things that your ex-spouse may be able to demand from you during the divorce if they're responsible for paying off your student loan debt. For example, your ex-spouse may be able to get a court order requiring you to pay your student loan debt in full or to have a set portion of alimony paid directly to your student loan creditor. However, this varies by state, so it's essential to consult with a lawyer if you have student loan debt and are considering a divorce.
What if both of us have outstanding student loan debt?
The situation gets a little more complicated if both spouses have outstanding student loan debt. In this case, the court will generally try to divide the debt fairly between the two parties. This may mean that each spouse is responsible for paying off their own loans, or it may mean that the debt is divided between them in some other way.
Again, it's important to consult with a lawyer if you're in this situation, as the laws surrounding student loan debt and divorce can vary from state to state.
The bottom line
In short, while student loan debt can't be discharged in a divorce, each spouse is responsible for continuing to pay it off after the divorce. This means that whoever is responsible for the debt at the time of separation is responsible for continuing to pay it off after the divorce. If both spouses have student loan debt, the court will generally try to divide the debt fairly.
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Original Source: How Are Student Loans Split When You Get Divorced