North Carolina couples who are facing the end of a marriage often focus on how marital property will be divided. Many, however, fail to realize that the court will divide marital debt as well if the couple has not come to an agreement on the matter.
Under the principle of equitable distribution, the court is under no obligation to divide assets evenly. The financial status, legal responsibilities and other ramifications of the divorce will be considered, and it is possible that one party may depart the marriage with substantially more than the other if the court deems it to be fair.
This may also apply to debts such as student loans. If people entered their marriage with the debt already on their record, then it is their responsibility and will not be part of the court’s deliberations. However, if either or both spouses took out student loans while they were married and had yet to repay them in full at the time of the legal dissolution of the union, then the sum remaining is part of the marital estate. The court may decide to assign it to either or both ex-spouses according to its estimation of both people’s ability to repay the debt while maintaining a reasonable standard of living. The responsibility for student loan payments may be either temporary or permanent according to the court’s discretion.
Couples who do not want this matter decided by a judge have a number of options. One of which is to have their respective attorneys help to negotiate a comprehensive agreement that addresses these and other applicable issues.
Source: Wise Bread, “Does Divorce Affect Your Student Loans?”, Ashley Eneriz, Nov. 8, 2016