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Does divorce affect student loan debt?

On Behalf of | Apr 5, 2021 | Uncategorized |

Marital property is any property or assets acquired during a marriage. The same rules apply to debt, meaning that both spouses share debt acquired during a marriage.

According to U.S. News & World Report, Texas is a community property state. That means both spouses equally share the burden of student loan debt. Here are a few factors the courts use when making decisions about shared debt.

Did the other spouse offer support during schooling?

Attending college is a major responsibility, especially if you also work while undergoing schooling. In these situations, many spouses rely on their partners for assistance, whether that is cooking, cleaning, or providing rides to and from school.

In this case, courts sometimes consider the supporting spouse to have already fulfilled their obligation. As a result, the remaining school debt is the sole responsibility of the attendee.

Was the other spouse a co-signer on the loan?

Co-signers on loans assume responsibility for repayment. For instance, if the loan holder is unable to repay the loan, the lender pursues the co-signer for any remaining funds. This responsibility still stands, even after divorce.

Was the money used for anything other than schooling?

Using funds from student loans to cover living expenses, such as mortgage payments or rent, render the money the responsibility of both parties. Conversely, funds used solely toward schooling are usually the responsibility of the loan holder only.

Was schooling completed?

In some situations, debt is not considered marital property unless you or your spouse earned a degree. However, this typically depends on the laws where you live.

When spouses share responsibility for student loan debt, the court decides on how to divide the debt between them. This process is similar to dividing up assets.

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