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Student loan debt after a divorce

When Texas couples are facing the end of their marriages, property division is often an issue that requires some thought. Many fail to realize, however, that the process also included the division of debts, and unless the parties can otherwise agree, Texas courts will in most cases divide marital obligations equally between the spouses under community property law.

Any student loan debt that either spouse incurred before they got married is their own. It is separate property, and it is in no way considered to be the responsibility of the other party. However, student loans that are taken out while they were married are marital obligations. However, in some cases judges will take the relative incomes of the parties into account when making the allocation.

For couples who tied the knot prior to 2006, federal law allowed them to consolidate their individual loans into a new loan that usually bore a lower interest rate. However, even if the original loan was incurred prior to marriage, the consolidated loan became the responsibility of both parties, and thus subject to division in a subsequent divorce.

Couples who were going to incur debt for continued education and who planned ahead and addressed this issue in a prenuptial agreement may not have to worry about this issue when they divorce, assuming the agreement is valid. Others who are ending their marriages may want to have their respective attorneys take the lead in negotiating a comprehensive settlement agreement that addresses student loan debt as well as other applicable matters. If one is reached, it can be submitted to the court and made a part of the divorce decree.

Source: Wise Bread, "Does Divorce Affect Your Student Loans?", Ashley Eneriz, Nov. 8, 2016

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