Student loan debt in a New York divorce

When a couple divorces, their marital debts are subject to equitable division in much the same way as their assets. Examples of such debts may include:

• Credit card balances
• Mortgages
• Automobile loans
• Personal and even business loans

Student loans remain a gray area. If someone accumulates student debt while married, then is it considered a separate or marital obligation? There is no clear answer: New York courts usually make this determination after taking a close look at several factors.

How the money was spent

If one spouse took out the loan to pay for tuition, textbooks, and other educational costs in order to earn a degree, then it’s a relatively safe bet to present it as that person’s private debt. This is because their spouse didn’t derive any benefit from those funds at the time, and expecting them to be partly responsible for the debt after divorce is seen as unfair. But if the money was used for living expenses such as food, rent, and utilities that the other spouse benefited from, many judges will consider it marital debt.

Whether or not a degree was earned

In New York, professional degrees that a person earns while married are considered marital property. Student loans acquired to pay for that degree are can arguably be presented as marital debt.

Who benefited from the increased earning power

The division of student loan debt hinges on exactly who benefited from the increased earning power brought on by the degree, and for how long. If a couple divorces soon after the one who attended school graduates, then the debt may be considered separate or divided in favor of the other party. But if the degree resulted in a high income that both spouses benefited from for years, then it is more likely to be considered marital debt.

Each party’s income at the time of divorce

New York courts will also consider each party’s ability to repay the debt. If the spouse who did not take out the student loan earns far more at the time of divorce than the spouse who did, then he or she may be ordered to assume more responsibility for paying it off.

Because the equitable distribution of student loan debt involves so many variables, each case is handled on an individual basis. This lack of a statutory standard means that both spouses and their divorce attorneys must present as much information as possible to ensure that the final distribution is fair.

If you are getting divorced and concerned about how student loan debt will be allocated, then contact a New York divorce attorney. They will review the circumstances under which the debt was accumulated as well as how the money was spent. These details will help them prepare the arguments needed to resolve the situation in your favor. Contact Eskin & Eskin, P.C. for quality legal representation in the Bronx, NY and the surrounding area. Our office is a family law firm for family law matters. Our attorneys have more than 40 years of combined experience and can be reached at 718-402-5204 or by visiting www.eskinandeskinlaw.com.