Who repays student loan debt after a divorce?

Divorcing spouses in Utah who still owe money on their student loans should understand how this outstanding debt may be considered during their divorce and how it may impact the final divorce agreement.

The angst involved with dividing shared assets during a divorce commonly receives a lot of attention by divorcing spouses, their friends and their family members. However, Utah residents who have decided or agreed that their marriage should end must also figure out how to split any debt they may share with their spouse.

From mortgages to credit card bills to medical expenses and more, a couple may amass a wide range of joint debt during their marriage. Student loans may even be deemed marital debt depending on the situation.

Different types of student loans

A person may take out federally backed student loans or private student loans. The latter often requires the student applicant to provide another party as a cosigner on the loan. When the cosigner on a student loan is the spouse of the student, the debt may well be considered a joint debt and subject to sharing between the parties during their divorce.

In another situation, a person may originally take out a federal student loan but later refinanced that into a private loan possibly in conjunction with their spouse. This may also result in the debt being declared a joint debt.

Timing of loan application and distribution

The timing of when a spouse applied for and accepted a student loan relative to when they got married may factor into the decision about whether the debt is the separate property of the student or a joint debt shared by both spouses. Student loans received before the marriage may more likely remain separate debt.

The use of student loan funds

Student loans may frequently be used to pay direct educational costs such as tuition, books, lab fees or other related costs. Student loan funds may also be used to support a person's living expenses while in school. A married student may therefore take out a student loan and use the money to pay rent and utility bills, buy groceries or fund other areas of daily living. Using student loans in this manner may result in the loan being declared a shared debt if the living expenses supported both spouses' lifestyles.

Degrees, careers and future earning potential

When determining the liability for student loan debt, a judge may evaluate the current and future earning capabilities of each spouse. Loans may have been taken out to pay for medical school, for example. If the student completed their education and now looks forward to a future in which they may earn a higher salary than their spouse, the responsibility for the debt may reflect their income disparity.

Legal consultation during a divorce matters

Utah residents planning to get divorced should urgently consult with an experienced attorney from Kristopher K. Greenwood & Associates to ensure they understand the many nuances involved in making decisions during their divorce.