Student loans are following people well into their adult years, and even people in their 40s (and sometimes beyond) have them hanging over their heads.
What happens when one or both of you has student loan debt as your divorce? The answer may not be as simple as you think. Here are some things to consider.
When was the loan taken out?
In a community property state like Washington, everything acquired after marriage is considered jointly owned, that rule applies to both assets and debts. If a loan was taken out after your marriage began, it may have to be divided more or less equally – no matter whose name it is in?
Did you co-sign to refinance the loan?
It’s not unusual for people to get a co-signer on a student loan, particularly if they refinanced it to get a better interest rate. If you co-signed for your spouse’s loan during your marriage, it automatically become community property – even if the loan originated before your marriage.
Do you have a prenuptial or postnuptial agreement?
Couples are largely free to craft prenuptial and postnuptial that carve out exceptions to the usual community property rules of the state. If you had the foresight to get a prenuptial or postnuptial agreement that addresses student loan debt, that may help protect you from your spouse’s debt.
If there is student loan debt involved in your divorce, it’s important not to make assumptions about it. This can be a very nuanced situation, and you may need to seek experienced legal guidance that’s specifically tailored to the facts of your specific case.
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