Stress from Student Loan Debt Can Lead to Divorce

 Posted on July 28,2018 in Divorce Finances

A recent report by the website Student Loan Hero claims that student loan debt is contributing to couples’ decisions to divorce and affecting when they divorce. In a survey of more than 800 divorced adults:

• 13 percent of the respondents blamed student loans for their divorces;
• 35 percent of the respondents with student loan debts said that the debt caused them to delay their divorces because they could not afford the process; and
• 58 percent of divorcees with student debts had to take on additional debt to pay for their divorces.

With the cost of higher education increasing, student loan debts are likely to continue to be a problem for people during their marriages and divorces.

Student Debt Leading to Divorce

Financial stress is one of the main causes of divorce, and student loan debt can be particularly stressful because:

• Student loan debts are normally worth tens of thousands of dollars;
• Recent graduates are often not earning enough money to make substantial progress in paying off the debt; and
• It is very difficult to discharge a student loan debt through bankruptcy.

Being married to someone with a large student loan debt can be frustrating because it puts financial limits on your marriage when you would like to be building a life together. You may have to delay purchasing a home or having children because of the amount of money you need to put towards paying off the loans. When you feel trapped by your spouse’s debt, you may resent him or her and question your marriage.

Student Loans as Marital Debt

In a divorce, your responsibility for your spouse’s student loan debt will first depend on whether it is a marital or nonmarital debt. Student loans obtained before a marriage are nonmarital debts unless a prenuptial agreement states that both spouses will share the debt. Student loans obtained during a marriage can be marital debt, but it also depends on:

• How the money was used;
• Who benefited from the loans;
• If a degree was obtained; and
• Each spouse’s earning power.

The loan is more likely to be a marital debt if the money was used to pay for living expenses or if both spouses benefited from one of them getting a degree.

Dividing Debt

Student loan debts can complicate your divorce agreement as you figure out how to divide the debts and whether the person with a greater debt should receive compensation. A Kane County divorce attorney at Goostree Law Group can help you determine an equitable division of debt. Schedule a free consultation by calling 630-584-4800.

Source:

https://studentloanhero.com/featured/survey-student-loan-borrowers-and-divorce/