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What Happens to Student Debt in a Divorce?

What Happens to Student Debt in a Divorce?

Jim did his best. He worked hard for the marriage, and he even quit his job and went back to school. Graduating, getting a good job, and earning a better wage didn’t help. The marriage ended anyway. What will happen to the student debt? He and Jane were paying it down together. Will he be stuck with the bill? Will she?

Property division is one of the most stressful aspects of any divorce, even before the question of student debt comes up. All debt accumulated during the marriage, including student debt, could be split among partners after a divorce.

Distributing Student Debt in a Divorce

Do it Yourself

In any divorce, the best option is always for partners to work out the details among themselves. Anything that can keep them from being tied up in court is going to alleviate a ton of stress, frustration, and disappointment. Once the judges are involved, the decisions are completely out of the spouses’ control. The reality, however, is that people often don’t get along, especially if they’ve been pushed to a divorce. If the couple can’t come up with a solution and must rely on the judge, what next?

Student Debt and Community Property in Texas

Texas uses a “community property division” model in divorce. Any property or debt acquired during a marriage is considered community property. In its simplest form, community property division takes all marital assets into account and divides them among the spouses 50/50.

If judges were to follow this model to the letter, it would mean that any marital debt – including student debt – would be immediately split among spouses. In Texas, however, courts are given a generous amount of room to distribute assets how they see fit. Judges may determine any “just and right” means to divide property. The end result may look more like an equitable division of assets than an equal share.

A judge can take any number of factors into consideration when dividing student debt. Did one partner support the other when they were in school? Like Jim, did the student graduate, get a job, and start contributing to the overall income of the home? Now that the couple is getting divorced, does the graduate have a much higher future earning potential as a result of the degree?

Unfortunately, there is no clear-cut conclusion or formula to determine how student debt will be distributed in a Texas divorce. The partners are going to be at the court’s mercy. If someone can’t get their ex to amicably agree on how to split up assets and debt, it is going to be crucial for them to secure a good lawyer to fight for what they deserve.

If you need a layer to protect your assets in a divorce, we are here to help. Consultations are free and there’s no risk involved, so call today at (713) 903-8112 or contact us online.