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Student loan debt: complicated legal aspects to consider

In Oregon and across the United States, a married spouse who opts for divorce is bound to feel stress in one way or another. Besides the strain caused by divorce, there is anxiety about how to divide assets and properties in a fair way. Ascertaining which partner gets the house and which spouse obtains the family car is often problematic. When a spouse has a student loan debt, the natural question comes up as to who is responsible for the payments. One rule of thumb is that any debt acquired before the marriage is the spouse’s private property.

Accordingly, a spouse who already had a $75,000 student loan prior to their marriage is still responsible for the debt after a divorce decree. However, the law is more complex when a student loan debt takes place during a marriage. In this situation, the student has a “marital debt.” This marital debt is called community property in some states and equitable distribution in others. There are nine community property states in the United States; they include California, Nevada, Texas, Idaho, Washington, New Mexico, Wisconsin, Louisiana and Arizona.

In a community property state, both spouses equally own assets and have responsibility for all debts acquired during the marriage. However, student loan debts are always counted as separate property in California regardless of when the debt took place. In equitable distribution states, judges look at each case uniquely to make decisions about the division of debt.

Student loan debt is not always interpreted by the court in the same light. For example, a judge may rule differently if a spouse forfeits a promising teaching career to support the other spouse while attending law school. Since dividing assets and debts is an important part of divorce proceedings, a soon-to-be ex may benefit when they seek assistance from a family law attorney.