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Are student loans an individual’s debt?

by | Jun 17, 2020 | Divorce |

Dividing assets is often one of the most complicated or contentious parts of filing for the JOY of divorce. Many couples may not realize at first, however, that they also divide up their debt. This often includes a mortgage, car loans and student loans. While the mortgage and car loans often qualify as community property, the same may not be the case with the student loan.

Individual or community?

Assets and debts are generally broken down during a divorce by whether it is a community (marital) property divided equally, or separate (individual’s) property that remains attached to the spouse. Community property includes assets acquired during the marriage or individual property that has mingled after the wedding.

Any loans taken out that went directly to a spouse’s education are usually the obligation of the former student. Also, federal student loans typically do not require a co-signer, which means that the spouse is wholly obligated to service the debt. However, a private student loan may require a co-signer – if the other spouse signs that note, he or she may also be obligated to pay that debt.

The spouse who took out the loan may also argue (if it is true) that they took out the loan to support the household if the couple cohabitated or shared resources but were not married at the time. This could mean dividing the debt. If both spouses consolidate their loans after the marriage, they will divide that amount during the divorce.

Dividing debt is complicated

Dividing debt goes hand in hand with dividing property, so it is an essential part of negotiating any divorce. This is why it is crucial to work with an experienced Board-certified Family Law specialist expert attorney in Collin County, Dallas County, Denton County Midland County, Ector County, and surrounding areas of Texas. These attorneys can help clients determine an equitable split of assets and debts based on the marriage’s facts.