How Does Divorce Affect Your Student Loans?
When dividing debt in a Florida divorce, judges will take many factors into consideration just as they would do when dividing property. For instance, a judge may give a debt incurred prior to the union to the spouse who accumulated it. Likewise, the judge might divide a debt fairly between two parties if they acquired the balance together. However, when it comes to student loan debts, knowing who acquired the amount and when may not be enough information a judge needs to make a decision. This is because several factors come into play to make a final determination regarding student loans, including but not limited to whether or not a degree was ultimately earned, who benefited from the degree holder’s earning power and for how long, the tax implications of the debt, and the earning power of each spouse. If you or your spouse has a large amount of student debt about which you are worried, work with a skilled Boca Raton property division lawyer to discuss what you can do to obtain the best possible divorce settlement.
What Was the Money Used For?
One of the first questions the judge will ask is, how was the money used? Did the borrower use the funds to pay for books, tuition, school supplies, etc., in pursuit of his or her degree, or did he or she use a large part of the funds to pay for housing, food, and transportation? If the answer is the former, the judge is likely to initially consider the debt separate. However, if the borrower used the funds to support the family unit while going to school, the judge will likely deem the debt marital.
Who Benefited From the Education?
If the couple splits shortly after one party obtains his or her degree, the judge may deem the student loan separate property, as the other party did not have time to benefit from it. However, if the couple was married for a considerable time, and if the degree made it possible for the holder to earn a substantial income from which both parties benefited for years, there is a good chance the judge will deem the debt to be marital property.
What is the Earning Power of Each Spouse?
In community property states, a judge will divide marital property 50/50 regardless of how fair doing so is. In such states, if a judge were to declare student debt to be marital property, both spouses would have to shoulder the burden, even if one spouse had little to no income of his or her own. In equitable distribution states such as Florida, however, the judge tries to be equitable, or fair, in his or her decision making. This means even if the debt is deemed marital property, if one spouse was afforded the privilege to not work as a result of the other’s earning power, the judge is unlikely to consider it fair to force the non-working spouse—who has limited earning power—to pay his or her ex’s student loans.
Work With a Boca Raton Property Division Lawyer
In most instances, a student debt is likely to remain the property of the person who earned the degree. However, because there are circumstances in which a judge may deem the debt marital, it is imperative that you work with a skilled property division lawyer who can better help you understand what is and is not fair and, more importantly, fight for what is fair. Trying to make it through the divorce process without a lawyer may result in you having to pay a debt that is not yours, receiving less marital property, and other financially devastating outcomes. Protect yourself and your interests and contact the Law Offices of David L. Hirschberg, P.A. today to schedule your initial consultation.