Wednesday, April 23, 2014

Student Loans in Divorce (from the Wall Street Journal)

An excellent article in the Wall Street Journal on the allocation of student debt in divorce that every divorce lawyer should read.

Summary of student debt in divorce cases:

Generally, educational debt incurred before a marriage is considered separate property and barring some predetermined contractual agreement, it stays that way after a divorce. "My law-school-loan debt is forever mine.” "No spouse will ever be liable" for it.

Debt division can get a little trickier when the student loans are taken out during the marriage. The person responsible for paying the loans isn't necessarily the person whose name is on them. Indeed, how educational debt is divided may depend on where you live and who benefited from the borrowed money.

In many states, divorce courts have the discretion to divide marital property in a holistic way. That means that if the educational debt is considered marital property, they have the option of taking into account contextual issues, such as each spouse's ability to pay it off.

So while student loans generally will go to the person who incurred them, there may be exceptions.

For example, if it seems like one spouse will have high income after a divorce and another will struggle to make debt payments, the higher earner may end up having to fork over some temporary spousal support to cover the ex's debt payments.

The entire article is here.

By: Robert R. Beauchamp
Law Office of Robert R Beauchamp
23120 Alicia Pkwy
Second Floor
Mission Viejo, CA 92692
Tel:  949-370-8000
Fax: 855-370-8100

#divorcelawyer #divorceattorney #divorce #familylaw

No comments:

Post a Comment