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Student loan debt and divorce: one more hurdle

On Behalf of | Jun 21, 2019 | Property Division |

Maryland couples who are going through the divorce process are often overcome with emotions. Separating from a spouse is hard enough without the added problems associated with the need to divide assets and debts. Those who have an outstanding student loan may not know whether they will need to pay back the entire loan or if the court will also hold their spouse as a responsible party.

One way to understand the issue is that any student loan debt incurred prior to themarriage constitutes a separate and private debt. If people have a $150,000 student loan before they get married, it is their sole responsibility to pay it back. However, a debt acquired during a marriage is thought of as marital debt, meaning that both spouses are equally responsible.

Another way the court decides who is responsible for paying back a student loan is whether the money was used strictly for educational purposes or household expenses. In this case, the spouse with the outstanding debt must pay back the money without the help of the other spouse. If the money was used to pay rent and utility bills, the court usually decides that the loan is not a separate debt. A court also takes earnings into consideration. A spouse with higher earnings is often responsible for paying back a debt, even if the student loan was used to further the other spouse’s education.

Assets accumulated during the marriage are subject to equitable distribution for Maryland estranged couples. People who are considering divorce may wish to consult with a family law attorney to discuss their legal options for the division of property.


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