While student loans do allow you the opportunity to further your education and plan for your future, they can also complicate your divorce. Whether you or your ex-partner have student debt, or you both bring student loans to the marriage, make sure that your divorce settlement is clear about who pays for each loan once the divorce is final.
If you’re not sure how your divorce will impact your student debt, it’s time to talk to a family law attorney and learn more about your options. Call Nowell Law Firm at 864-707-1785 to set up a meeting now.
When the Loans Were Acquired
Much depends on when you took out the student loans in question. If you signed for them as a recent high school graduate, went to school, and got married a few years later, it is likely that those loans will not be divided in the divorce. If you brought them into the marriage, you will probably leave the marriage with them. However, there are exceptions to this. If your ex-spouse agrees to pay the loans as part of the divorce settlement or in exchange for something else, they want, you may be able to get out of at least some of your monthly payments.
How Were the Loans Used?
Perhaps you acquired the student loans after you were already married. In this case, it is likely that they will be considered joint property that is subject to equitable distribution under South Carolina law. However, the court may dig a little deeper though to see just how the loans were used.
If you were extremely careful about your loans and only took out enough for tuition and textbooks, the court may decide that you alone are responsible for paying them. If you took out more than that in order to cover your share of living expenses and household costs, it may be argued that your student loans benefited both parties. In that case, your ex-partner may be partially responsible for repayment of the loans.
Cosigned Student Loans
As you may have already guessed, cosigned loans are an entirely different situation. If your spouse cosigned on your student loans, you are both responsible for payments in the eyes of the lender. The court may require one or both of you to continue making full or partial payments, but the loans will remain on both parties’ credit reports. While you may be able to refinance to get your ex-partner off of the student loans, lenders tend to make it difficult to do this. They prefer the security of having two people to pursue for payment.
Student Loans in an Equitable Distribution State
Throughout all of this, remember that South Carolina is an equitable distribution state. This means that there is some nuance in how student loan payments are divided. The court may look at how the loans were used, who is in a better position to pay them off, and who benefited from the student loans.
Your Divorce Settlement Does Not Affect the Lender
No matter what agreement you reach, remember this: your divorce settlement is entirely separate from the agreement you have with your student loan lender. Your divorce agreement might say that your ex-spouse has to make all monthly payments until the loans are paid off. But if they quit making payments, the lender will come after you—not your ex-spouse. Even if you provide them with a copy of your divorce settlement, they will continue to pursue you for payment and your credit score will likely suffer.
Your agreement with your lender is that you pay back the loans. If your ex-partner does not uphold their end of the divorce decree, you cannot simply turn the student loan company loose on them. You may instead have to consult your attorney to have them held in contempt. You can also make the payments on your own and then sue them for the payments they owe you.
Find Out How Nowell Law Firm Can Help
Divorce is never easy, but with the right legal team, it can go a lot more smoothly. That’s where we can help. Learn more about your options during divorce by contacting us today. Fill out our or call us at 864-707-1785 to get started.