Student loan debt recently surpassed credit cards and auto loans to become the second highest debt category after mortgage debt. More than 44 million people in the U.S. owe an approximate $1.3 trillion with a T.
Most of those borrowers owe less than $100,000. The average debt for college graduates in 2016 was about $37,000. Add on a graduate or professional degree and that amount can balloon. Almost a half million people owe more than $200,000. When you met a spouse in law school or a graduate program the combined student loan burden can take a toll on a marriage. Unfortunately, student loans can outlive some marriages. What happens to debt in divorce?
The Basics of Debt and Divorce
Property division including the division of debt in Colorado must be completed in an equitable manner. Many factors are taken into consideration, such as the ability to pay, who is awarded what property and when debt was acquired. For many things, for instance a vehicle, you might be awarded the Acura MDX along with the outstanding debt.
There is sometimes a general misconception that marriage means taking on the student loans of your spouse. While you were single, relatives might even have joked that you should get married, so a spouse would take on half your debt.
Educational debt incurred before marriage while pursuing a PhD or any other degree is generally considered separate property. The full balance will usually stay with the spouse who took on the debt in the first place. For a lower earning spouse, it may come as a shock to deal with a significant student loan bills individually again. But that spouse may also again qualify for a certain relief programs or repayment terms might be changed.
Supporting a spouse in school
This analysis changes for some long-term couples who were together while one spouse was completing a medical degree or another professional degree. If the loans were taken out during the marriage, the debt would be considered marital. Then contextual issues would be considered and dividing the balance is not quite as simple.
When you are considering separating or have recently done so, speak with an experienced divorce attorney. Mistakes are difficult if not impossible to correct after the fact, so it is important to get skilled advice right away.