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How Are Student Loans Divided in Divorce?

One of things that plagues many people today is the amount of student loan debt they come out of college with and the repayment of this loan well into their professional lives. When this person chooses to get married, their spouse agrees to accept their property and debts as their own, including student loan debts. While this should not deter anyone from getting married while they have student loan debts, a couple that divorces may find themselves in for an unpleasant surprise when it comes to these debts.

Was the debt incurred before or during marriage?

One of the common misconceptions about student loan debt is that, when a couple gets married, the education debts that were occurred prior to the marriage become a shared debt. This is generally not the case. Student loan debt, if it was incurred before the marriage, is considered separate property and remains the sole property of the spouse that took it out should a divorce occur. Unless the couple made a contractual agreement that they would share the cost of the debt, the debts a couple entered the marriage with will remain in divorce. For some, this realization may affect their decision to divorce, since the payments they may have been getting help with are suddenly their full responsibility.

Student loan debts that occurred while the couple was married do not necessarily belong to the person whose name they are in. Marital property is considered to be any assets and debts that a couple has obtaining while in their marriage, regardless of whose name is on the loan or title. Nevada is a community property state, meaning that each spouse is responsible for half of the assets and debts incurred in marriage. Since this debt is considered marital property, each spouse is responsible for half of the debt in the event of divorce.

There are two steps that can be taken in order to ensure that a couple does not experience any surprises related to student debt in divorce:

  • Be honest with the extent of this debt and plan around the repayments of debt instead of the acquisition of assets; and
  • Get a prenuptial agreement that details how the student debt responsibility should be allocated.

Student debt does not easily go away, and a couple should take steps to prevent surprises during the divorce process. Knowing when the debt was incurred and how this can affect the outcome of a divorce agreement can make it easier for a couple to plan ahead.

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