A lot of property division discussions center on the division of assets with value. Although each spouse is entitled to half, the concern is over what their half going to look like? Who gets the car? Who gets the house? Should we sell the house and split the profit? How much of my spouse’s income (alimony) can I claim? Retirement accounts? Investment interest or property? The list of positive value assets goes on and on, but there is another side to property division.
That other side of the coin is the division of negative assets also known as debt liability. Spouses are less inclined to fight to keep this expense during a divorce, but not all debt is treated in the same manner. With the increasing level of student loan debt across the nation, more and more people might be wondering what happens to student loan debt upon marriage or divorce.
First, it is important to note that student loan debt is somewhat unique. A mortgage or a car loan is considered secured debt due to the fact that there is a physical item backing these loans. But the value of a student loan is the education, the degree. This can’t be sold and although income earned may be shared during the marriage, the other spouse can’t take a part of that degree away with them.
Under many jurisdictions, student loan debt is considered to be separate property in that in the end, it really “benefits the individual more than the marriage,” as noted by a student aid expert.
Of course, the exact treatment of any debt varies from jurisdiction to jurisdiction, which is why it is so important to find an Oakland attorney that focuses their practice on divorce.
Source: Yahoo! “Ask Farnoosh: Does Student Debt Become Joint Debt When You Get Married?” Farnoosh Torabi, Dec. 6, 2013