We are living in an unprecedented era of student loan debt: For the first time in history, the amount of total educational loans in the United States has risen to $1.5 trillion. With all that financial pressure, it’s little wonder that young married couples are feeling the stress, especially because finances are already the number one reason for divorce in America.
New studies have found that more than 1 in 8 divorces are directly or indirectly caused as a result of student loan debt. But what lies behind this statistic, exactly? Additionally, what happens to student loan debts when a married couple decides to divorce? At Malinowski Hubbard, our Fairfax divorce lawyers have handled a wide range of complex divorce cases, including those where each partner had major student loan debt. In this post, we’ll touch on some of the reasons behind student loan debt divorces, and provide some recommendations for how to proceed.
How Can Student Loans Affect Couples?
Like all couples, today’s young people fight about finances regularly. However, the problem seems to go even deeper for modern couples than it has in the past, as the significant emotional and psychological toll of student loan debt preys on marriages across the country. Even for single people, student loan debts cause significant depression and stress, and with the average amount of debt at a stunning $37,172 per student and rising, it’s easy to understand why.
In the recent study by SunTrust Bank, researchers found that well over a third of borrowers cited college debt and money problems as key reasons for the breakdown of their marriage. The problems varied greatly in scale and scope, but in all cases heavy financial strain made the couple feel hopeless, and lifestyle differences made it hard for couples to agree on financial decisions, from where to work to what house to purchase. Of these couples, the vast majority of them indicated that student loan debt specifically was to blame for their stress.
Student loans can also make an individual feel that their partner has taken advantage of them, particularly when that partner has a much higher debt burden. In some cases, spouses might spend years helping their partners pay off debts – only to find later that student loan debt is one of the few that you cannot easily discharge, and that it can be difficult for a court to divide these assets after the fact.
Ultimately, the emotional toll of debt on a marriage can’t be understated. From anger to resentment to clinical depression, struggling with finances for years can cause an array of negative emotions to rear their head, and eventually the pressure may be too great.
What Happens to Student Loan Debt After a Divorce?
Because Virginia is an equitable distribution state, the judge will not divide your financial assets and property fifty-fifty, but rather based on the fairest or most “equitable” arrangement. This generally doesn’t apply to anything that you brought into the marriage, unless you signed a prenuptial agreement or other marriage document that indicates otherwise. If your spouse’s student loans were acquired before you got married, it’s possible that you may be able to avoid sharing these once you decide to divorce. The opposite is also true: Your debts will likely remain your own if you received the loans prior to marriage.
However, any debt incurred during the marriage can be considered “marital property” and may be divided equitably according to Virginia law. Although it’s far more common for loan debt to be incurred before a marriage begins, there are also many cases in which a couple sought an undergraduate or graduate degree during their marriage, and in those cases a student loan debt could be marital property in the eyes of the legal system.
This is one of the reasons it’s so crucial to seek professional assistance from a divorce lawyer if you or your partner has significant student loan debt – or significant assets and property to divide. Cases with post-marriage student loan debt are incredibly complex, and the judge’s decision will hinge on a number of factors when examining your case. If you supported your spouse financially or emotionally to help them with their student loan debt, you may be able to offset the ultimate distribution of student loans, but it will depend on your unique circumstances, and your legal strategy.
If you need assistance with your divorce case in Virginia, don’t hesitate to contact our skilled family law and divorce attorneys at Malinowski Hubbard. Call us at (703) 935-4222 for a consultation, or fill out our online form to get started today.