In order to get a good education today, student loan debt is a reality for many college and graduate-school educated people in this country. What happens when one spouse in a marriage has tens of thousands of dollars in student loans and the couple is getting divorced?
Does the other spouse have to split the debt?
In California, a community property state, when a couple divorces, the court divides their assets as well as their debts.
Just as there are community and individual assets, there can 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, in most cases, it’s usually a little of both. Trying to figure out who is responsible for paying back the loan can be complicated. Getting a degree can benefit both when the individual’s salary is increased – the court may then consider it a community debt. However, if the degree doesn’t benefit both parties, 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 can be exceptions when the student loan can be considered a community debt. It is best to seek legal advice if you are in this situation.
If you need help trying to figure out how your divorce will impact you financially, an attorney might be able to help. Contact the Riverside family law offices of Holstrom, Block & Parke. We can help you figure out what your options are and how they will impact your financial obligations.