Divorce and Student Loans

Student loan debt is becoming the single greatest financial burden for adults in the United States.

The stress of paying off student loans is so great that it is often one of the top reasons listed when a couple is asked why they are choosing to divorce.

Filing for divorce is complicated enough, but when student loan debt is involved the stakes can be extremely high for spouses who are concerned that they may be saddled with the loans of their spouse. 

Whether or not you will be responsible for paying off your spouse’s student loan debt is entirely dependent on the specific facts of your case. Call the office or contact us today at the Law Office of Ben Carrasco in Austin to learn more and schedule a free consultation of your divorce claims.

Texas Property Division

Texas is considered a community property state for divorce cases. This means that all assets and debts are split into either separate or community property. Separate property is all assets and liabilities brought into the marriage by each spouse and is retained by that spouse in a divorce. 

Community property is all property, both assets and debts, acquired by the couple after the marriage, and community property is split equally in a divorce. The issue with divorce student loan debt is whether the court determines it separate or community property for the couple.

Student Loan Debt and Divorce

Today, the average student loan debt for a person who went to college in the United States is estimated to be a little over $37,000. This is a significant sum that you may held partially responsible for following a divorce. 

If one spouse took out student loan debt prior to the marriage to pay for school, the court will most likely consider the student loans separate property that belongs to that spouse.

As such, that spouse will be solely responsible for paying off the remainder of the loan after the divorce is finalized, but it must be proven by clear and convincing evidence to the judge in the divorce case.

However, if one spouse took out student loan debt during the course of the marriage, it could be considered community property during a divorce. The court will look at exactly how the student loans were used and for what purpose during the marriage.

If the loans were used specifically to pay for school items, such as tuition, books, and fees, then the court may determine that only one spouse benefitted from the debt and assign it specifically to that spouse.

But if the student loans were used to benefit the household in addition to paying for school, it could be considered community debt that is split between spouses in a divorce.

Examples of this include using student loan money to pay for housing, a shared vehicle, living expenses, and other items shared by the couple during the marriage.

The court will also look at who benefitted from the student loan debt in addition to which spouse acquired the loan. If one spouse took out student loan debt to pay for schooling that eventually led to a high income in which both spouses benefitted, the court is more likely to consider that community property.

However, in the same situation if the divorce occurs prior to the completion of the degree the court might be more likely to consider it separate property since only one spouse is benefitting from the loan.

How to Prove Student Loan Debt Liability

How to Prove Student Loan Debt Liability

If you are concerned about how the court will identify student loan debt that you or your spouse incurred during your divorce, there are some steps you can take to help your divorce attorney make the best possible arguments for your case.

First, keep detailed records of the loans and how the money was used. Keep receipts and details about what financial accounts the money was kept in and whether the loan was commingled with household finances.

Second, identify any items or services that the court could consider as evidence that the student loan debt was either separate or community property, and maintain a timeline of when the debt was incurred in addition to how it was used.

Call or Contact Our Office Today

The determination of student loan debt as separate or community property can make a substantial impact on your finalized divorce. For advice on your current divorce situation in the Austin area, call or contact the Law Office of Ben Carrasco in Austin today.

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