Today, the financial burden of obtaining an undergraduate education is too much for most students and their families. It is next to impossible to find a college student who doesn’t utilize some financial assistance to pay for tuition or living expenses, such as a major scholarship or significant student loan. It is therefore no surprise that 13% of divorced couples revealed that student loans were a contributing factor in their divorce, according to a survey conducted by studentloanhero.com.
Determining responsibility for student debt can be a complicated issue during a divorce. That’s why many divorcees hire experienced legal representation with a deep understanding of Florida family law to guide them through the divorce process.
How Are Student Loans Divided in a Divorce?
Under Florida law, marital assets and liabilities are subject to “equitable distribution” unless there is a good reason for an unequal distribution. Any property or debt obligation a spouse acquires during marriage is considered to be a marital asset or liability.
Thus, any student loans you or your spouse obtained while married to each other are considered to be a marital liability subject to equitable distribution. Student loans incurred prior to the marriage are not marital liabilities, and are therefore the responsibility of the spouse who took out the loan.
What Happens if I Consolidated My Loans During Marriage?
Sometimes students have several loans from different lenders with various repayment terms. In those cases, a person may pay the entire balance of all outstanding loans with the proceeds from a single new loan. As a result, the obligations under those first loans are satisfied and substituted for a single repayment obligation with a single set of terms. This is called “loan consolidation,” which has the benefit of making payments simpler.
However, if your spouse took out student loans prior to your marriage and consolidated them after you married, your spouse no longer has any loan obligations that preexisted your marriage. Instead, there is only one lender to whom your spouse made a promise to repay money. Because the proceeds used to pay off your spouse’s original student loans were from a loan obtained while you were married, the consolidated loan is considered to be a marital liability that is subject to equitable distribution.
Therefore, you and your spouse share the responsibility of repaying the consolidated loan after the divorce. In essence, you may be on the hook to make partial payments on your spouse’s student loans.
So Now I’m Responsible for What Used to Be My Spouse’s Separate Liabilities? How Is That Fair?
Ideally, we would include our spouses regarding important financial decisions like student loan consolidation. And if both spouses were actually involved in that decision, they implicitly acknowledged some shared responsibility by virtue of the fact of their marriage (unless they agreed that only one of them shouldered the responsibility i.e. through a marital agreement).
But, many divorces involve couples who are notoriously bad at communicating with each other. Maybe your spouse consolidated his or her student loans without your input or knowledge. Maybe your spouse wanted to reduce their separate liabilities while increasing your marital liabilities. These may be facts that the court can consider in determining the proper distribution of marital liabilities.
Under Florida code, section 61.075, a court may consider the following factors to justify deviating from an equal division of marital liabilities:
- Each spouse’s contribution to the marriage;
- The parties’ economic circumstances;
- The duration of the marriage;
- Whether a spouse’s education or personal career was interrupted;
- A spouse’s contribution to the other’s career or educational opportunities;
- Whether an asset should be free from the other spouse’s interference (e.g. a spouse’s ownership interest in their business);
- Each spouse’s contribution to the acquisition of either parties’ assets, whether marital or separate;
- The intentional dissipation, waste, depletion, or destruction of marital assets after filing for divorce, or within 2 years of initiating the divorce; and
- Any other factors required to achieve equity or justice.
Should I Get an Attorney for My Divorce?
Dividing assets and liabilities in a divorce can involve complex legal issues. At Mitchell & West, LLC, our team of experienced Miami divorce lawyers has an intimate understanding of how asset division works and the laws that govern it. We are dedicated to protecting our clients’ interests and striving for a fair and just outcome.
Please contact us online, or call at (305) 783-3301 for a free consultation about the merits of your case.