The legal process of divorce involves numerous financial changes for an affected couple. They may have to sell off some of their assets, change where they live and negotiate arrangements to share high-value assets. They also have to make arrangements to cover their shared financial obligations.
Many spouses in Florida feel uncertain about what debts are subject to division when they divorce. Some people expect to treat accounts held in the name of one spouse as their separate obligations. Even accounts in the name of one spouse can be part of the marital estate.
Several different types of debt may influence the overall property division process for a divorcing couple in Florida. Credit card balances, mortgages and vehicle loans often require consideration during a divorce. There could also be student loan debt to address.
What typically happens to student loans when couples divorce?
Timing is crucial when addressing debts
Sometimes, student loans are truly the separate financial obligation of one spouse. If they completed their education long before they got married and already had student loan debt, they remain solely responsible for that debt after the divorce.
However, if one spouse took on student loan debt during the marriage, then those debts may factor into the overall property division process. The debt may be martial even though the account is in the name of one spouse.
A judge may not directly divide the student loan and make the non-borrowing spouse pay half of the account. Still, they can consider the overall marital debt when allocating financial obligations and marital property. If the spouse who took out the student loan during the marriage retains responsibility for paying that debt, the courts may allocate more property to them or may assign other deaths of a comparable value to the other spouse.
Spouses can sometimes reach their own terms for property and debt division based on what they believe might be fair. In cases involving litigation, spouses have to accept terms based on Florida’s equitable distribution statute, not necessarily what they believe is appropriate.
Understanding what happens with specific financial obligations can be beneficial for those preparing for the property division component of a Florida divorce. The allocation of student loans taken on during the marriage can influence the division of other debts and marital property.