June 17, 2014 By Paul Wallin
The affect of divorce on your student loans

California’s Law’s on divorce property laws are relatively straightforward. As a community property state, the assets shared by you and your ex-spouse will almost always be split equally during a divorce. The exception to this is separate property, which includes:

  • Property owned by either spouse before the marriage;
  • Inheritances received by either spouse;
  • A gift received by either spouse from a third party; and
  • Payments for pain and suffering in a personal injury suit.1

As with assets, your debts will be equally divided between spouses in California. Any debt that was incurred during the marriage will be divided between you and your spouse even if you were not aware he or she had incurred it. Of course, most people do not want to take on debt that was incurred by their spouse, so your attorney can fight to minimize the debt you take on during your divorce case.

Does the same division of property and debt apply to student loans? Generally, marital debt in California includes:

  • Mortgages;
  • Car loans;
  • Credit card debt;
  • Debt from a family business during the marriage; and
  • Personal loans.

Student loans may be considered marital debt. You may have taken on a significant loan to pay for your education during your marriage. So who is responsible for paying off this debt if your marriage ends? Let’s take a look at some situations that can help you understand this issue…

Was the Money Used for Books and Tuition or for Living Expenses?

If the money from student loans was used mainly to finance your books, tuition, and other school-related expenses, the court will likely consider your debt as separate property. If the loan was used to fund living expenses that you and your spouse both benefited from, it will likely be considered marital debt.

How Do California Family Law Courts Identify a Professional Degree?

If your loan was used to obtain a professional degree, California family law courts generally consider the debt to be the separate party of the spouse who obtained the degree. However, if you and your spouse both benefited financially through your training or education as a result of the loans, the court may consider it a community property debt.

How Long Did You Have Your Degree Before the Marriage Ended?

If your marriage is ending soon after you graduated, loans are most likely going to be considered your separate debt. This is because you would not have had much time to use your degree to obtain a job and earn money for both you and your spouse. If the loan made it possible for you to earn a significant income for you and your spouse for several years, it will likely be considered marital debt.

Does Your Spouse Have the Means to Pay Back The Student Loans?

If you acquired a student loan during your marriage and then divorced your spouse, the court will consider the income or earning power of each spouse. If one spouse does not have any significant income, it is less likely that he or she will be responsible for your student loan as marital debt.

Call the Divorce Lawyers at Wallin & Klarich Today

We understand that there are many facets to a divorce that can complicate matters and add unnecessary stress to your life. That is why it is critical to hire an experienced and skilled family law attorney to help you assess your case and obtain the best possible outcome. Issues involving marital debt can be complicated, but the attorneys at Wallin & Klarich have over 30 years of experience. Successfully helping clients during their divorce and family law matters.

With offices located in Orange County, San Bernardino, Los Angeles, Torrance, Riverside, West Covina, Victorville, Ventura, San Diego and Sherman Oaks, our knowledgeable attorneys are available to help you no matter where you work or live.

Call us today at (888) 749-7428 for a free phone consultation. We will get through this together.

1. http://www.forbes.com/sites/jefflanders/2013/12/17/are-student-loans-incurred-during-the-marriage-considered-marital-debt/

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