Student loans are subject to property division principles

Student loans and other debts are an issue for many married couples. When a couple divorces, the common question is whether both spouses will be liable for such debts or whether they are the responsibility of the party acquiring them.

A recent article highlights certain misconceptions regarding debt division during a divorce, specifically concerning student loans. According to the article, many people may have the misunderstanding that student loan debt incurred prior to a marriage becomes marital property after the marriage. This is typically not the case, as the party bringing in the debt will remain solely liable for it absent a contractual agreement. If the student loan is taken out during the marriage, however, the circumstances may be different. It may be treated as marital property or treated as separate property for the party taking it out depending on the laws of the state and the financial situation of each party after the divorce.

In determining whether an asset is subject to distribution during a divorce, the first step is to classify it as either separate property or marital property. An asset or debt acquired before a marriage is classified as separate property and is distributed to the party that brought it into the marriage. Assets or debts that are obtained during the course of the marriage are considered marital property and are subject to the property division laws of their state. Georgia uses the equitable distribution method to distribute marital assets. Equitable distribution means that property will be divided between the parties based on what is fair under the circumstances, but not necessarily equally.

As detailed above, whether student loans are the responsibility of one spouse or both is often a question of when they were taken out. Student loans, like other debts and assets, are subject to distribution if acquired during the course of the marriage. A family law attorney can help those pursuing a divorce through the property division process.

Source: Wall Street Journal, "Who Is Responsible for the Student Loans After Divorce?," Charlie Wells, April 13, 2014