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One of the more challenging parts of any Texas divorce is dividing up marital debt.
Divorce attorneys find that couples deciding to end their marriage do not always fully understand what is considered a shared debt and should be divided versus what debt remains personal.
Student loan debt is a complicated gray area that may seem obvious how that should be assigned yet is not always what it seems.
When determining who pays what regarding student loans, divorce lawyers must take many details into consideration to appropriately assign that debt in a divorce.
Student Loans Are A Form of Marital Debt Like Any Other
It is very common for one or both marrying spouses to either enter into the marriage with student loan debt or take on student loan debt during the marriage.
What divorce attorneys do point out about this debt is that it is handled somewhat differently in divorce negotiations than some other debt.
Division of this debt is determined based on two things:
- When the debt was taken on.
- The way the state of Texas handles the division of marital debt.
Student loans taken on prior to the marriage are considered personal debt, while any student loan debt taken on during the marriage by one spouse or both is considered marital debt.
Why Is Some Student Loan Debt Considered Marital Debt?
The most common question that divorce lawyers receive when helping couples dividing up marital assets before a divorce is why are student loans taken during a marriage considered marital debt rather than personal debt?
The answer is one based on tax filing and a number of other things.
Regardless of which spouse receives student loans, they become marital debt for couples that file joint tax returns because doing so may affect student loan repayment.
Two incomes listed on tax returns frequently makes the student ineligible for many programs designed to lower student loan payments.
Yet this may be different if spouses have filed as single and it is important that this detail be discussed with a divorce attorney.
In addition, payments are assumed to be coming from a blended finance situation which immediately turns those loans into marital debt.
How Is Marital Student Loan Debt Divided?
When negotiating the division of marital student loan debt in Texas which is a community property state, divorce lawyers must consider a few important details.
Generally, any student loan debt taken on by either spouse or both during the marriage is divided 50/50 regardless of who took on what debt.
Where the negotiations can get complex is when that added debt affects one spouse’s ability to pay child support if it is debt that was not specifically taken on by that spouse.
The negotiations can also get more indepth if the debt taken on eventually benefited the marriage.
Will Student Loan Debt Affect Your Divorce?
When couples end a marriage, one thing that many divorce attorneys find them to be surprised about is how some student loans are considered marital debt and thus the responsibility of both spouses no matter who received the loans.
Couples with existing student loans or planning to take on student loan debt can avoid these issues by discussing the matter with an experienced divorce lawyer.
Using pre-nuptial and post-nuptial agreements and other methods to handle this type of debt, couples can control who will pay what if and when they divorce.
