Am I Responsible for My Partner’s Student Loans During Divorce?
One question that we (as divorce attorneys) are frequently asked is whether or not one spouse is responsible for the other spouse’s student loans if they divorce. The answer to this question is: “it depends.” To answer this question, you need to know a little bit about New York’s equitable distribution laws. Understanding how assets and debts are divided during a divorce can help you prepare for the process. In this article, the Rockland County divorce lawyers at The Law Office of Robert S. Sunshine will discuss how student loan debt is treated during a divorce in New York.
Understanding equitable distribution in New York State
New York is considered an equitable distribution state. This means that during a divorce, marital property is divided among the spouses in a manner that is considered equitable to both parties (but not necessarily even). It’s important to understand that the term “marital property” refers to both assets and debts that were accrued during the marriage. This includes student loan debt.
To become marital property, the debt or asset must be acquired during the marriage. If the student loan was taken out before the marriage, then it’s considered the separate property of one spouse. If the student loan debt was acquired during the marriage, then it is considered marital debt and would be divided in an equitable manner between the two spouses.
Student loan debt incurred before the marriage
When student loan debt is incurred before the marriage, it is generally considered separate debt. In other words, it belongs to the estate of the spouse who took out the student loan and not the marital estate.
Generally speaking:
- The debt holder is solely responsible for repayment
- In some cases, if the loan was refinanced during the marriage with a joint loan or if marital funds were used to make payments, the courts might see it as a joint responsibility.
- The court can also consider whether the professional degree obtained from the student loan substantially increased the earning potential of the debt holder, leading to a higher standard of living during the marriage.
Student loan debt acquired during the marriage
Student loan debt that was acquired during the marriage is considered part of the marital estate and subject to equitable distribution. Dividing student loan debt, however, is not necessarily straightforward. This is due to the fact that it is often seen as an investment in one spouse’s future earnings as opposed to a shared expense.
When dividing the student loan debt, the courts could consider factors such as:
- The earning potential of each spouse, considering the degree funded by the loan
- Whether both spouses benefited from the loan
- The financial situation of each party, including their ability to repay the debt
Talk to a Rockland County Divorce Lawyer Today
The Law Office Robert S. Sunshine represents the interests of Rockland and Westchester County residents who are attempting to untie the knot. Call our Westchester County family lawyers today to schedule an appointment, and we can begin discussing your concerns right away.
