How Do Your Student Loans Affect Your Divorce?

How Do Your Student Loans Affect Your Divorce?

Money can be a touchy subject for married couples. In fact, financial issues can be a contributing factor in many divorces. Moreover, as the number of students incurring significant debt for their college education grows, so will the impact student loans can have on marriages. An online survey recently found that 13% of respondents with student debt claimed that it contributed to their divorce.

How your student loan debt will be treated during your divorce can be affected by any number of circumstances. Therefore, it is important to consult with an experienced family law attorney to ensure that your assets and debts are properly and fairly divided.

Student Debt: A Special Exception to Community Debt

California is a community property state. In a previous article, I explained how debts that are incurred during marriage are ordinarily considered to be community property. Debts incurred before marriage or after separation are considered separate property. However the California Family Code treats student loans differently. Student loans incurred during marriage are not treated as a community debt, but are instead the student’s own responsibility.

Student Loan Payments Made During Marriage

Under California family law, community contributions to obtain education or training that substantially enhances the student’s earning capacity must be reimbursed to the community estate. For example, if you are a doctor and used community property to make payments on a student loan for medical school, California law functions as if the doctor’s spouse paid half the balance of those payments. As a result, the doctor may have to reimburse his spouse for those payments.

However, if you can show that the marital community has substantially benefited from those contributions, the amount you owe to the community estate may be reduced. There is a legal presumption that the community does not substantially benefit from loan repayments that were made within 10 years before your divorce, but does benefit from loan repayments made more than 10 years before your divorce.

Other factors a family court may consider when determining the amount you must repay the community for your student loans include:

  1. Any community property contributions used towards spouse’s education or training that would offset yours;
  2. The degree to which your education or training increases your employment prospects;
  3. Whether community property contributions paid for expenses directly relating to your education (e.g. tuition and books);
  4. Whether the couple enjoyed a high standard of living and accumulated substantial wealth; and
  5. Other factors that indicate how your education impacted your marriage.

Get Smart Legal Advice from an Experienced Divorce Lawyer

Divorce can be incredibly difficult and intense. Any number of factors can have a significant impact on the outcome of your divorce. At the Law Offices of Jeffrey S. Grant we put decades of legal experience at your fingertips. I have experience in complex divorces, including collaborative divorces, contested, uncontested and high-asset divorces.

To learn more about how your education, debts, or any other situation can affect your divorce, contact the Law Offices of Jeffrey S. Graff online or at (805) 633-4999 for a free initial consultation.

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