My niece was 25 when she got a divorce. Apart from the emotional turmoil, she also had a tough time deciding who got what after the split. Both she and her ex tried hard to hold onto as many assets as possible. Things got a bit uglier when it came to student loans.
Neither of them had any idea that student loans after divorce could turn out to be so complicated. Even with loads of paperwork along with regular appointments with the lawyer, the situation stills remains unresolved.
I understand that this blog may not be a pleasant thing, especially if you are planning to walk down the aisle anytime soon. But, what is the harm in knowing some additional information beforehand? Divorce is itself a long and grueling process. To add to the complications, what if you have to deal with student debt?
Here’s what you should know about student loans after divorce.
According to studies, almost 42% of marriages in the UK alone end in divorce. What if most of them involve student debts and loans? This is why it is crucial for everyone to know how to deal with student loans after divorce. Whether it’s you or your spouse who has the loan, make sure you consider the following questions so that you are prepared to deal with legal matters efficiently.
1. What Was the Student Loan Used For?
Most of the money given to students as loans goes into paying for tuition, school fees, educational materials, and books. My niece, for example, did not use all the money she was loaned for her tuition. She also used the money to buy books and pay other school fees.
Keep track of how you spend the money and see if your spouse has any role in it. Let’s say you both decided to spend some of the loan amount for living expenses to benefit your family. You may have decided to spend some amount on maintaining your lifestyle. Sit down with your partner and make a list of the benefits both of you achieved from that money. In the end, you can repay the debt accordingly.
2. Did the Borrower Successfully Earn a Degree During the Marriage?
The main purpose of taking a student loan is to earn a degree. Now you need to determine if the degree is considered marital property. How is this determined? You can figure out the answer to this question on the basis of where you live. Say you are a resident of New York. In that case, your degree can be considered marital property if you earned it during the marriage.
The debt acquired to earn the degree is then considered marital debt. Thus, both the spouses are equally responsible for repaying the student loan. Have a word with your lawyer to get a better understanding of what is considered marital and separate property. In the event that a student loan is considered separate property, only one of the partners has to repay the student loan.
3. How Much Is the Earning Potential of Each Spouse?
According to an assignment shared by Allessaywriter, it is crucial to take the earning ability of each spouse into consideration before deciding who has to repay the student debt. Both the partners should be able to support themselves and any dependents. Calculate the equitable distribution of debt and assets to figure out the earning potential of each spouse.
If one of the partners has no significant earning potential or source of income, the court will be less likely to rule that he or she must repay the student debt.
All in all, courts usually ask the student who asked for the loan in the first place to repay the debt, though the decision may vary depending on your situation. The court will ensure that the decision is fair for both spouses.
Ricky Hardy is an independent legal consultant in Australia. He is also a part of Topassignmentreviews, which is a provider of trustedessayreviews. Ricky likes to paint and listen to music in his spare time. www.topassignmentreviews.com