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Student Loan Debt and Divorce in New York

Law Offices of Steven Gildin

The number one cause of divorce in the United States is money problems, and student loan debt is becoming more and more of an issue for married couples that are considering a divorce. In New York, the question of who assumes the student loan debt in a divorce can be a complicated one, and the answer depends on a number of factors. Talk to a local divorce attorney today to learn more about your potential liability for paying off the student loan debt you or your spouse has accumulated in pursuing an education.

Student Loan Debt Acquired Prior to Marriage

During a divorce, all assets and liabilities are separated into two categories — marital and nonmarital property. Each spouse keeps the nonmarital property he or she had upon entering the marriage, and the couple splits the marital property equitably in New York. If the student loan debt was acquired by one spouse prior to the marriage, it is considered a non-marital liability and is retained by that spouse. The spouse who incurred the debt will be required to pay it off.

Student Loan Debt Accumulated After the Marriage

If the student loan debt is acquired after the wedding, the responsibility for the debt becomes more complicated. New York courts look closely at how the loan money was utilized when determining where the liability rests for the loan. If the student loan debt was used specifically for educational purposes, such as tuition and books, then the spouse who incurred the loan will be responsible for paying it off. This is because the other spouse did not benefit from the loan in any meaningful way.

However, if the student loan debt was used to pay for other expenses such as food, rent, or vacations from which both of the spouses benefitted, then the couple will be responsible for paying off the debt in a divorce. If the money is used in this manner, it becomes no different than any other type of loan that the couple would take out and both be responsible for paying back as a marital liability.

The court may take other factors into consideration when determining the marital liability of student loan debt incurred during the marriage. One such factor is each spouse’s ability to repay the loan. If one spouse earns significantly more than the other, that spouse may be required to help pay off the loan, even if the money was used specifically for educational purposes. An experienced divorce attorney will be able to make the best possible case for avoiding student loan debt liability in your New York divorce.

Call or Contact a Lawyer Today

Student loan debt is the only type of debt that cannot be discharged in death, so the determination of who is required to pay the debt is an incredibly serious question that must be answered during a divorce. Call or contact us to learn more about this article.