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Dividing a student loan debt in divorce

In an equitable distribution state like North Carolina, a court will consider several factors to determine whether one person’s student loan debt should be considered marital property for purposes of divorce property division. If the debt dates from before the marriage, it will probably be considered separate and will not be subject to division.

However, if the person acquired the loan after getting married, the issue might become more complicated. For example, if the couple used the student loan money for rent or other shared expenses, it may be more likely that it will be considered a shared debt than if the student only used it for school-related expenses. The earning power of both individuals might also be a factor. A lower-earning spouse might not be held responsible for a higher-earning spouse’s debts, especially if the lower-earning spouse took time out from a career to support the student spouse.

A person who cosigned on a spouse’s student loan will probably be held equally responsible for the debt. Prior to filing for divorce, a person with student loan or other debts may want to consult an attorney to discuss the situation and to get an idea of what to expect.

Not every couple must go to court to make a decision on how to divide assets and debts. In some cases, it is possible to negotiate a divorce agreement outside of court. Whether a couple is able to reach an agreement outside of court or not, they should be aware that creditors generally not do not consider the divorce agreement when holding someone responsible for a debt. Couples may want to include a provision for how to deal with a situation in which one person does not pay the agreed-upon share of the obligation.

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