Divorcing your partner may seem as simple as signing a document and going your separate ways. However, this is not the case, as divorce is a complex legal issue with many nuances. One of the most common issues many experiences is the distribution of debt, particularly student loans. When undergoing a divorce, it’s essential to understand how your property and debts will be split. Keep reading to learn what will happen to your student loans and how a Hackensack, New Jersey divorce lawyer can help you navigate this process.
Understand the Timing of Student Loans
One of the most important factors when the court determines how student loan debt will be distributed during a divorce is the debt’s timing. When the debt is incurred by either party plays a significant role in how it is split during the dissolution of the marriage.
For example, if one partner took out loans before marriage, this is considered personal debt, and the other party will not inherit the debt. However, if it was taken out after the couple was married, the student loans would likely be considered marital property, which could leave both parties responsible for paying the debt back.
What Else Can Impact the Distribution?
The state you live in can play a significant role in how debt you’ve incurred will be distributed. Most states, like New Jersey, are equitable distribution states to splitting marital property like assets and debts. This means the state will not simply award each spouse half of the estate, like in community property states.
When it comes to debt, the state will most likely award the majority of the responsibility to the borrower. However, if you also benefit from the education they received, the state may consider what funds were being used to pay it off and who earned the degree during the union to decide how to split the debt. This means you could be awarded some of the payments, even if you did not take out the loan or receive the degree.
Can an Attorney Help Me?
When going through a divorce, it can be frustrating to get stuck with debt you aren’t responsible for. Whether you did not take out the loans or your spouse promised to help you pay them off, these loans can pose a severe financial burden if you weren’t anticipating paying loans.
Ensuring you contact an attorney as soon as possible is crucial when divorcing. At HD Family Law, we understand that a divorce can be a tumulous and overwhelming time for many. Our firm is dedicated to making this process as smooth as possible to help you transition into the next chapter of your life. Contact us today to learn more.