Americans are more consumed by student loan debt than ever. Strikingly, the class of 2016 will graduate with an average of $37,172 owed, a six percent increase from just the previous year. In total, Americans owe over $1.48 trillion in student loan debt, a significant amount more than the total U.S. credit card debt. Oftentimes in divorce, the allocation of debt becomes a main source of contention. Student debt, however, is becoming an increasing factor in divorce cases, and knowing how the debt portfolio of both parties can impact your case is important.
Incurring Student Loans Before & During Marriage
Oftentimes, student debt is incurred prior to marriage, especially when individuals wait longer to get married. Typically, this student loan debt is treated as separate property in a divorce, placing payment liability on the party that took on the debt.
In some circumstances, however, a spouse may wish to obtain a degree during the marriage and need financing to do so. This situation can be a legal “gray area,” as the debt can be considered separate, with portions becoming marital should the debt be used for marital expenses, such as payment of household expenses. However, one party’s student loan likely means an advanced degree with higher pay, and thereby a benefit to the whole family. Additionally, one spouse may have stayed at home to allow the other spouse to pursue school or vice versa. In these more complex situations, the spouse may be found liable for some portion of the debt. Conversely, one spouse’s support of the other while in school may result in additional spousal support. Finding an experienced Ohio divorce attorney to help you navigate the intricacies of separate and joint debt is essential.
Paying Your Spouse’s Student Debt
In some cases, one party has helped the other pay off separate student debt prior to and during marriage. If you contributed to the repayment of your spouse’s loans prior to marriage, it may be considered a gift by the court, making it unlikely to recoup your money. If the debt is considered separate debt and you contributed to the repayment during marriage, the court may deem it debt to which you willingly chose to contribute, making it unlikely that any funds can be directly returned to you in a settlement.
The content above assumes neither party has signed to the student debt. Having an open discussion with your spouse regarding assets and liabilities, and the repayments of those liabilities, can help avoid a tense legal battle in case of divorce.