Student Loan Questions When Ending a Marriage
Dividing assets and debts is a major part of the divorce process. For couples dealing with student loan debt, whether recent or decades old, it’s natural to have questions. Who is responsible for paying? Does it matter if the debt was taken out before the marriage? What if both spouses benefitted from the degree?
Working with a Somerset County family lawyer ensures that your divorce agreement addresses student loans clearly and completely. With the right legal guidance, you can exit the marriage with a clear understanding of your financial responsibilities and a plan to move forward with confidence.
Understanding Equitable Distribution in NJ
New Jersey follows the principle of equitable distribution, which means marital property and debt are divided fairly but not always equally. The court looks at a variety of factors including the duration of the marriage, each party’s income and earning potential, and contributions made during the relationship.
If a student loan was incurred before the marriage, it is generally considered separate debt and remains the responsibility of the individual who took it out. But if loans were taken out during the marriage, even if only one person’s name is on them, things become more complicated.
Loans used during the marriage, especially if they helped one spouse gain a degree or certification, may be seen as marital debt. This is particularly true if the other spouse benefited from the higher income or supported the student spouse during their education.
For example, if one partner worked full-time while the other went to law school, the court might consider whether the couple shared the benefits of that degree. In such cases, the student loan debt could be subject to division, or the working spouse may argue for reimbursement or offset through other marital assets.
If both spouses co-signed on a student loan, both are legally responsible. These contracts are legally binding regardless of marital status. So, if one stops paying, the lender can pursue the other. It’s critical to address joint loans in the divorce settlement, and where possible, refinance to remove one spouse from liability.
Negotiating a Fair Outcome
Because student loan debt often involves long-term repayment and affects future financial planning, you need to be sure the debt is handled in a way that protects your interests. There are ways to protect yourself moving forward.
Talk to a Somerset County family lawyer about how to negotiate a fair settlement. Transparency will be key, because whether you’re concerned about your own student loans or those of your spouse, fully disclosing all debts is essential for the creation of a complete divorce settlement. Hidden debt can create long-term financial consequences, especially if you were unknowingly liable, resulting in legal issues later.
Do you have questions about student loans and divorce in New Jersey? The legal team at the Law Offices of Kisha M. Hebbon, LLC is available to guide you through the divorce process. If you live in Somerset, New Brunswick, North Brunswick, Piscataway, Edison, Somerset County or Middlesex County, contact us to schedule a confidential consultation.
