Getting divorced with student loans
California residents probably know that they live in a community property state. This means that marital property is divided equally when a couple gets divorced. There may be some exceptions to this, such as when a prenuptial agreement outlines other provisions. Student loan debt may also raise unique situations and might or might not fall under the need to be equally split.
As explained by NitroCollege.com, one of the big factors that a divorcing couple will need to identify in when the student loan debt was incurred relative to when the couple got married. In many situations, it is likely that debt incurred prior to the marriage remains the separate property of the person in whose name the loan was taken. If, however, loans were taken out after the date of the marriage, the debt might be deemed marital property.
Student Loan Hero explains that several elements may need to be reviewed in order to determine whether or not the debt is considered marital property or not. One of the things to be assessed is what the student loan money was used for. Some people use these funds for tuition, books or other expenses directly related to the educational costs. Other people, however, may use student loan money to pay for rent, groceries or other living expenses. Money used to support both spouses’ lifestyle may lead to the decision that the student loan debt is marital property.
Other factors include the attainment of a degree and the earning power of each spouse.