When assets must be divided a divorce can become messy. Many forget that not only are assets being divided but debts are often split as well. With the growing number of individuals accruing student loan debt it may be helpful in understanding who bears the responsibility of paying it back.
Student loans are considered separate property if they were incurred before marriage. That means that the individual who took out the student loan will be solely responsible for paying it back. The same concept applies to other debts a spouse may have acquired before marriage.
In contrast, if student loan debt was acquired while married, then the debt is considered shared marital property. Marital debt includes credit card debt, a mortgage, car loan, and personal loan, among others. In a community property state, everything is split 50-50, which means the student loan debt would be split and the other spouse would be required to pay even if they would suffer financial hardship. New York is an equitable distribution state, so each divorce is weighed differently. However, in either case it is up to the discretion of the court.
Prior to 2006, couples were consolidating their student loans in order to get a lower interest rate. By doing this, each individual affixed themselves to the loan. This made them each become fully responsible for the loan if the other person did not pay.
Before tying the knot you should know how much debt your intended spouse may have. If student loan debt is a concern, you can sign a prenuptial agreement in order to protect yourself in case of a divorce. A prenuptial agreement will state how assets and debts will be split.
The New York matrimonial law attorneys at Blodnick Fazio & Associates, P.C. are experienced in handling all aspects of matrimonial law, including prenuptial and postnuptial agreements. Contact the experienced lawyers at Blodnick, Fazio & Associates by calling (516) 280-7105.