It is no secret that a post-secondary education can cost a lot of money, so many students turn to educational loans to shore up the difference. However, as some Illinois residents have learned, the process of dividing up the responsibility for debts like these in a divorce situation can be somewhat more complicated than being approved for the loan to begin with. Depending on the state in which the couple lives, how a court may choose to deal with such debt can be quite different.
When a couple weds, the assets and debts with which they enter the marriage are typically considered theirs individually. Of course, these assets — and often the responsibility for paying off the debt — is typically shared between two married individuals. Ultimately, however, the letter of the law says each individual is responsible for his or her own pre-marital finances. This means that in a divorce situation, it is a rule of thumb that a student loan would fall to the student, and not his or her spouse, to pay off in full.
This can change in a scenario in which a student loan was secured during the marriage. In this case, a divorce court may be able to rule holistically on which spouse will shoulder the burden. Holistic rulings mean the court takes into account the financial statuses of each spouse, as well as other relevant factors, to determine a fair course of action.
Divorce is often at its most complicated where finances are concerned. It is a good idea for Illinois residents seeking a divorce to enter the proceedings with a comprehensive knowledge of state laws regarding student debt and other types of financial obligations. This will limit the number of potentially unpleasant surprises awaiting one or both spouses during the divorce process.
Source: The Wall Street Journal, “Who Is Responsible for the Student Loans After Divorce?”, Charlie Wells, April 13, 2014