Financial stress can sometimes put a strain on a marriage and with more people marrying with student loan debt, it is not all that surprising that many college loan borrowers say that debt is the main source of their marital strife.
Even when couples go into a marriage knowing one or both are carrying debt over from their college days, the heavy financial burden often put the kibosh on the very things newlyweds look forward to such as buying a home, a car, or even starting a family. Scraping by for years on end trying to pay off an average of $40,000 in college loan debt can be hard on a marriage. It’s no wonder that student loan debt is the leading cause of divorce in 13 percent of marriages.
Division of Marital Property | Student Loan Debt
When student loans are taken prior to marriage, the debt is considered separate – the responsibility of the borrower and not subject to division when looking at marital assets and debt. However, sometimes the non-borrowing spouse has already contributed a large sum of marital assets to help his or her spouse pay off his or her student loan debt only to see the marriage fall apart. When dividing marital property and debt, they may be entitled to more marital assets to offset their contributions to the separate debt.
If a spouse took out student loans after the date of marriage, the debt is viewed as marital debt, subject to division in a divorce. However, the fact that one spouse supported the other while they attended school and started a career is not lost on the court when couples divorce and some consideration may be given to the spouse who helped the other in their career aspirations when dividing marital property and debt.
If a spouse cosigned on their spouses loan, a divorce is not going to wipe away their obligation to pay on the loan even if their spouse agrees to take over the debt as part of their divorce. In the lenders eyes, both the borrower and cosigner are responsible for paying the debt. In the best case scenario, the borrower will make on time, full payments for a year removing the cosigner from the loan at the borrower’s request. However, if a spouse is not confident that the borrower spouse will follow through, it is worth considering an offset when dividing marital property. Depending on the size of the loan, it may also be worthwhile to require the borrower to take out life or disability insurance in the event that the he or she dies or is unable to work to protect the cosignor.
Questions About Division of Marital Property and Student Loan Debt in Your Divorce?
Contact an Experienced Illinois Divorce Lawyer for Answers
If you have question regarding the division of marital property and student loan debt in an Illinois divorce, contact the Libertyville Law Offices of Ronald L Bell & Associates at 847-495-6000.