Book an appointment using SetMore

Can I be held responsible for my spouse's student loan debt if we divorce?

Student loans are in the news right now as the Biden Administration is considering the issuance of an executive order which would eliminate up to $10,000 of federally insured student loans for individuals. Like anything else currently, there is a wide range of opinions about this- from those who are clamoring for more relief to those who are dead-set against the idea of relieving student loans. Whether or not the student loan debt ultimately is relieved via executive order the importance of student loans in the lives of many Americans will not change. 

Student loans may have become a part of your life as a young adult who went to a college or university immediately after high school. Or, you may have entered school as an adult and have only recently incurred these debts. Either way, divorces in Texas can be impacted by student loan debt if you and your spouse are not prepared to handle this subject. The best place for you to begin getting a handle on your student loan situation is to learn how student loans are treated in Texas divorce cases. 

Whether you have student loans, or it is your spouse who owes money for student loans it is certainly a subject that could be relevant was you to get divorced. Considering the number of student loans that some of us have this can be an integral part of your divorce. The need to repay student loans is a reality for millions of Americans and can potentially disrupt an otherwise straightforward divorce. Learning how student loans are treated in Texas divorce cases can also help you to determine what risk if any, there is when it comes to your having to help pay your spouse's student loans as a part of your divorce. 

How does community property law impact the division of student loans in a Texas divorce?

Texas is a state that bases its laws on property division in Texas upon community property principles. Before we can begin a discussion on dividing student loans and why your spouse’s loans may end up being your responsibility in a divorce, we should spend some time walking through the basics of community property laws in Texas. That way you will have a solid base to work from when it comes to learning how to manage your expectations surrounding student loans and community property. 

Community property can be divided by a family court judge in a divorce case. It is presumed that all property owned by you and your spouse is community-owned at the time of your divorce. You can overcome this presumption by presenting evidence that a certain piece of property is separate property. Your spouse can do the same. Separate property is property owned by either of you before your marriage or acquired during your marriage either by gift or inheritance. 

Debts function similarly when compared to property in a Texas divorce. You can have community debt as well as separate property debt. The default assumption is that once community property/debt is classified in the divorce that it will then be divided 50/50 between you and your spouse. Equitable distribution of property and debts does not necessarily mean, equal, however. Rather, equitable distribution is founded more along the lines of a just and right division of property. This is an important piece of information to learn as you begin to determine how student loans may be divided. Fairness matters, for better or worse, in the eyes of a family court judge when it comes to dividing property. 

Student loans that you incurred before the beginning of your marriage will remain separate property. Debt that exists in your name will be your responsibility and debts in your spouse's name will remain his or her responsibility. There is not much middle ground in this regard. However, there is a discussion to be had when it comes to dividing up student loan debt that is incurred during your marriage. Due to the debt having been incurred during your marriage there will be a presumption that the debt is community debt and therefore is subject to division in the divorce case. 

This does not mean, however, that the debt will be divided directly down the middle between you and your spouse. Rather, a family court judge would apply principles of Community property and divide the property in an adjusted and right manner. Remember that fairness plays a big role in this discussion period this means that it would not necessarily be fair for you two to wind up having to pay for a large portion of your spouse’s student loan debt period however, there are always circumstances in a person's life that could cause some disruption to this general principle.

based on the information that we have covered in today's blog post division of your student loans would be a relatively simple process where you and your spouse determine when property or debt was acquired and make decisions on the division of the debt because of that. However, I am here to tell you that Community property law can't get complicated rather quickly. As a result, you should prepare to learn as much as you can about factors that may complicate the division of student loans. These factors could work for and against you depending upon your marriage and the nature of the debt.

For instance, do you and your spouse have a prenuptial or marital property agreement in place? if so then you may have already contracted for what would happen in the event of a divorce about your student loan debt. The beauty of marital property or pre-marital property agreement is that you can contract for whatever you want even if it does not necessarily coincide with the practices of a family court upholding community law principles. You all can take into consideration whatever you want when dividing up student and debt in a premarital or marital property agreement. If the agreement does not violate principles of Texas public policy then a family court judge would be bound to uphold whatever it is you all had agreed to.

Another interesting factor to consider is what would happen if you are you finance your student loan. Refinancing alone takes that student loan and blends it into another loan or creates a brand-new loan. At that point, separate properties student loans may have become part of a community property debt or combinations of debt. When we talk about an issue like this it is similar to Co-mingling of separate and Community property assets. What used to be part of the separate estate may end up becoming part of your community estate. It's not as if you can do much about this at the time of your divorce but if you are still married and considering a refinance of your student loan debt this will be a factor to consider.

Another factor that may be relevant to student loan debt in your marriage is arguments can be made because a student loan you took out benefited your marriage then the debt should be considered Community property rather than your separate debt. I can imagine a scenario where your spouse took out student loans and order to become a doctor before your marriage. Since your community income increases a great deal due to their work as a doctor then your spouse could conceivably try to make an argument that because they are taking out a student loan was so advantageous for you that the loan should rightfully be part of the community estate. I don't know how successful this type of argument would be, but it could conceivably be one that you're spouse attempts to make.

if a student loan debt is relatively large then it certainly could impact a wide variety of issues within your case. for example, if you are ordered to make large contributions to your spouse is student loan payment then you may be in a position where you are unable to pay spousal support or spousal maintenance in addition to having a reduced amount of child support be obligated to your name. This is not out of the realm of possibilities especially if your student loan obligations reflect college and Graduate School.

All things considered; you must be able to protect yourself in this regard. having student loans is one thing but it is an entirely different subject to be made to pay back loans that we're not your own and did not stand to benefit your house sold all that much. I realized that I used an example earlier where medical school’s student loans may have been something that improved the quality of your life a great deal even if you are not a doctor. However, if your spouse took out student loans and either did not finish their degree or earned a degree that did not result in a substantial amount of income being earned by him or her then this argument would not seem to be all that convincing. 

As a result, if you are concerned with the amount of debt that your spouse has in student loans and want to make sure that you do not end up with those deaths on your side of the Ledger after divorce then working with one of the experienced family law attorneys with the Law Office of Bryan Fagan would seem to be a sensible plan for you. Our attorneys know how to defend you in a situation where your spouse isn't tempted to push some of his or her student loan obligations onto you because of a divorce case. 

While I am sure that you have no problem paying your share of household bills and other debts that you have accumulated in your name the last thing you will want to do is pay debts that are not in your name and did not stand to benefit you or your children. This is an intimidating prospect for anyone who has gone through or is currently going through a divorce case. Rather than worry excessively about what this type of situation could mean for you and your family your best bet is to work with an attorney who has helped defend people in these types of situations before.

there is a huge difference between an experienced family law attorney and one who practices family law only sporadically. Our attorneys and staff can advocate for you in the courtroom and negotiate skillfully on your behalf outside of court. Additionally, our attorneys stay up to date on current case law and changes in state law regarding Community property division. We value the ability to work with clients and potential clients just like you. It is an honor to serve our community in this way and we appreciate the confidence of our many clients located across the state of Texas and around the world.

How mediation figures into the division of deaths and property

Fortunately, you have options to consider when it comes to Community property division and your divorce. We have already talked about how a premarital or marital property agreement may be able to help give you Peace of Mind when it comes to being able to work through issues regarding division of property and debts. By working side by side with your spouse before divorce you ensure that you and your spouse can enjoy the fruits of your marriage without having to concern yourselves with how the property would be divided in the future.

Dividing debt can be just as complicated emotionally as it is financially. This is especially true if your spouse is angry about the nature of the debt and otherwise not satisfied with the degree she earned, experiences after college, or income earning potential because of having earned the degree. it may be that your spouse has a number one goal of getting out from under these student loans and sees this divorce as her best opportunity to do so. Be aware that her motivation in this regard may be more substantial than their desire they can't push anything else in the case.

It does not need to be a shock to you to learn about your spouse’s goals regarding the divorce. Simply put, you can speak to her and her attorney about goals and objectives throughout the case. You may be surprised to learn that she is upfront and honest with you about what he or she wants to accomplish with the case. this way you can understand her approach on certain subjects and can better prepare your settlement offers when it comes to preparing your case for a hearing or mediation.

otherwise, mediation presents a circumstance where you and your spouse can lay your cards on the table and negotiate earnestly with one another to address the major issues of your case including student loan payments. Student loan payments fall under the general heading of Community property and debt division. You all can consider the property that you own and the debt that you have as being necessary or division in your case. This means that issues such as your health, resources, separate property, age, and income earning potential are all relevant factors for a court to consider when dividing property.

Although you and your spouse do not have to explicitly consider these factors in your negotiation it would be wise to do so. This is since you know that a family court judge will use these factors and you should be considering them as well while you are negotiating. For example, if you are someone who earns a great deal of money, is young and healthy but has a spouse who has a significant amount of student loan debt then it may be in your best interest to make an offer to pay for a portion of that in exchange for keeping more retirement income in your name or avoiding having to take on greater amounts of student loan debt. 

Again, however, it is completely up to you how you want to approach this topic. Everyone reading this blog post has different circumstances on their hands in terms of how to prepare for the negotiation process surrounding Community property, debts, and student loans specifically. Another factor to consider is what you will need to do to confirm the amounts of debt that you may owe. Doing something like going through your credit report to make sure that all debts are considered in the divorce. The last thing you want to do is find out that you have certain debts to your name after a divorce is already over with that you were previously unaware of.

Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as to learn more about how your family circumstances may be impacted by the filing of a divorce or child custody case.


Sign Up Here to Download Our eBook!

Fill out the form below 
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.