Ways of dividing student loan debt in a divorce

Since California is a community property state, student loan debt may be considered a shared obligation in a divorce. This means that even if only one person went to school using the loan, both might be responsible for paying it back. However, this is only the case for loans incurred during the marriage. If both people had student loans before they were married, then most likely, each person’s student loan debt will be considered their own in the divorce.

If a couple consolidated their student loans at some point, this will probably also be considered a joint debt. If one person does not pay off the loan, the other will still be responsible. However, the ability for a couple to consolidate student loans ended in 2006, so this will not apply to couples who are more recently married.

Other debt may be divided in a divorce as well, and this might be one reason to draw up a prenuptial agreement that outlines how it will be handled in case of a divorce. Even if people do not want to make a prenuptial agreement, they should be honest with one another about any debt they are bringing into the relationship.

Community property does not mean that all property will be split exactly 50/50, and a couple might want to try to negotiate property division themselves with the assistance of their attorney rather than turning to a judge. This may give them more flexibility in how things are divided. For example, there might be a valuable collection that is more meaningful to one person than the other, so they might relinquish their share of an investment or a savings account in exchange. A couple might also agree to take on the debts they were mostly responsible for incurring if the amounts are roughly equal.