Payne & Associates, PLLC

If you're considering getting a divorce and have student loans, you're probably wondering about how those are going to be split between you and your spouse. Those types of debts, along with other shared debts, can quickly become a concern if they weren't to further your own education. Will you get stuck footing the bill?

According to one couple's story, when they attempted to split their student loans, $4,000 and $19,000 that had grown to $30,000 or more, they were unable to. In fact, she and her to-be-ex-husband both had shared legal responsibility for the loans, even though he owed significantly more than she did.

The man was out of work, so she ended up paying for all of the debt; she ended up losing her home in a foreclosure, went through bankruptcy and had to work as a waitress to support herself and her children. The loan servicer went as far as to take a portion of her wages and to take her income tax return to cover the loan's defaulted payments.

Even though her ex-husband had been contractually obligated to pay back the remaining balance, she ended up having to pay because the loan company held her accountable through her signed promise of repayment. The loan company did not care who was legally obligated through the divorce; it had its own contract to uphold.

The Department of Education is quick to point out that federal laws don't allow older loans to be divided during divorce, even if there are special circumstances like domestic violence involved. On top of that, they can't apply for income-based repayment unless both parties submit their financial information, a task that can be difficult to achieve when a couple is divorced. Your attorney may be able to help you and your spouse work out a different asset division policy if you have to keep your loans as a single debt.

Source: The Boston Globe, "Student loans and divorce can lead to a big mess," Shelley Murphy, Dec. 26, 2016

No Comments

Leave a comment
Comment Information

Payne & Associates, PLLC
206 North Spruce Street, Suite 1B
Winston Salem, NC 27101

Phone: 336-283-2937
Fax: 336-217-8784
Winston Salem Law Office Map