In order to obtain a good education in this country, student loan debt is a reality for many people attending college and graduate school. So, what happens when a married couple gets divorced and one spouse has tens of thousands of dollars in student loans? Does the other spouse have to split the debt?
In California, a community property state, the court divides a couple’s assets as well as their debts when they divorce.
Just as there are community and individual assets, there can also be community and individual or separate debts. For example, if one spouse is attending school and takes out a student loan during the marriage, the loan is generally considered a separate debt.
There are many reasons for an individual to take out a student loan, such as:
• To pay for college tuition and books
• To support the student and/or family while pursuing an education
Since it’s usually a little of both in most cases, attempting to figure out who’s responsible for paying back a loan can be complicated. Getting a degree can benefit both parties when an individual’s salary is increased, so the court may consider it a community debt. However, if the degree doesn’t benefit both people, repayment of the loan is usually the responsibility of the student.
According to California Family Code Section 2641(b): “Upon dissolution of marriage or legal separation of the parties, the community shall be reimbursed for community contributions to education or training of a party that substantially enhances the earning capacity of the party.”
In California, there are exceptions when a student loan can be considered a community debt. It’s best to seek legal advice from an attorney if you find yourself in this situation and need help figuring out how your divorce will impact you financially.
Contact the Riverside family law offices of Holstrom, Block & Parke. We can help you determine what your options are and how they’ll impact your financial obligations.
Dayn Holstrom is a hardworking, compassionate problem solver who welcomes the opportunity to serve you in any way he can. His maximum availability to address your questions and concerns begins with a free initial consultation. He is well-seasoned in all matters related to family law, as well as a skilled negotiator and litigator.