Many divorcing couples find the financial side of the divorce process to be quite complicated, especially when it comes to dividing marital assets between spouses. Many spouses often wonder what happens to their debts during the divorce process. If you’re considering divorce or just beginning your divorce proceedings, you might specifically be worried about your or your spouse’s student loan debt. Read this blog to learn about what happens to student loans during a New York divorce, and find out how a Divorce & Separation Attorney in Bohemia, NY can provide high-quality legal counseling today.
HOW ARE STUDENT LOANS HANDLED IN A DIVORCE?
This depends on numerous factors. If the student loan debt was acquired before the couple was married, then it’s considered separate debt. This means that the spouse that accrued the debt will be responsible for paying it off. However, in New York marriages, the debt that either spouse acquires during the length of the marriage is considered marital debt. Therefore, student loan debt accrued during the marriage will be both spouses’ responsibility in the event of a divorce.
HOW ARE DEBTS SPLIT IN NEW YORK DIVORCES?
New York is an equitable distribution state, so shared property and debts are split reasonably between spouses but not necessarily 50/50. A judge decides how debts will be split between the couple by considering a long list of factors, including the length of the marriage and each spouse’s annual income. However, spouses also have the option of making financial decisions themselves with the help of a divorce lawyer or mediator. Some couples prefer this because a law professional guides them through the legal proceedings but allows them to have the final say on settlement agreements.
WHAT IF I CO-SIGNED MY SPOUSE’S STUDENT LOANS?
Co-signing student loans means that you’re legally obligated to pay back the debt if your spouse becomes unable to. This means that if you co-signed your spouse’s student loan debt, you’ll still be responsible for the debt even after the divorce settlement is finalized. There are a few ways to detach yourself from your spouse’s student loan debt in this situation, including refinancing the loans in your own name or finding a lender that allows co-signers.
Are you considering filing for divorce in New York? Are you seeking a compassionate divorce attorney who has your best interests in mind? Look no further because the Law Offices of Susan A. Kassel, PC are here to fight for you! Contact our highly effective team today for an initial consultation.