If you get divorced, one step that you need to take is to divide up your marital debts. Along with splitting up your assets, it is important to take stock of what financial obligations you have and determine how that debt should be split between the two of you.
When one person has a significant amount of debt from student loans, couples may wonder how this is going to impact their situation. Are both people responsible? Does only the borrower have to keep the debt? It depends on the circumstances.
Whose name is on the loan?
First and foremost, it is important to consider who is actually listed on the loan documentation itself. It may be true that only one spouse was actually attending college, but if the other person cosigned on their loan, it means they are both responsible for those payments. This may mean that they have to split up the debt during the divorce, even though the person who did not actually attend college would then be paying back their ex’s loans. By cosigning, they agreed to that obligation.
When was the loan taken out?
Another important thing to look at is when the loan was originally obtained. In most cases, if someone took out student loans before getting married, they are individually responsible for paying them back. But if they took out the loans after getting married, they may then count as a marital debt, and both people may have that responsibility.
Sorting out these types of financial details can certainly be complex, and it is important for couples to understand their legal options during divorce.
