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Dealing with student loans after a Texas divorce

Sunday, September 24, 2017

One of the most important vows included in marriage ceremonies the nation over is not the one about "sickness and health," but the unspoken vow wherein two individuals agree to take on one another's debt. This includes the sometimes-heavy burden of student debt, which can complicate even the healthiest relationship. In the case of a Texas divorce, the complications only deepen.

It is a common misconception that debt accrued prior to a marriage automatically becomes a shared asset once the paperwork is signed. As it turns out, according to most divorce law, student loans racked up before the nuptials tend to remain the responsibility of the student whose name is on the loan form. This can be a difficult realization for those who have gotten used to financial help in paying down those loans when a divorce is finalized and a former spouse is no longer required to pay a cent towards those debts.

If student loans are taken out during the marriage, things become even more complex. How this debt is divided in a divorce situation depends largely on state laws governing marital assets. Many states allow divorce courts broad discretionary powers when it comes to dividing assets holistically. This means that, while most students will be required to pay off their own debts, exceptions may be made in certain circumstances.

A Texas divorce is a major step in the lives of both spouses, and like many things in life, can be complicated by money. If both spouses enter the divorce proceedings with a clear understanding of state laws pertaining to division of assets and debts, it can go a long way towards improving the efficiency of the process. This can mean a faster route to a happy single life for both parties.

Source: The Wall Street Journal, "Who Is Responsible for the Student Loans After Divorce?", Charlie Wells, April 13, 2014

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