If you owned a stock that climbed 33 percent in value from 2014 to 2019, you would rightfully think of yourself as the next Warren Buffet. That percentage, though, is the increase in the amount of student loan debt incurred in the United States in that five-year period, according to Investopedia1. If a sliver of that debt is in your family, how do you handle it during divorce?
My Student Loan Debt
If you incurred the student loan debt before marriage, you “own” the debt as a separate obligation. Marital debt follows the same course as marital assets: either it is common to the marriage or it belongs to each party.
Suppose you go to Old Dominion University (Oh Dee You — does anybody other than lawyers ever call it by its full name?) and chalk up the average American student loan debt, $35,359. A year later, you marry. A few years after that, you want a divorce. When you look up Code of Virginia § 20-107.3, you are struck by the title:
Court may decree as to property and debts of the parties.
“And debts;” painful, we know. It gets worse. It clearly explains how debts are assigned in the divorce:
- Separate debt is (i) all debt incurred by either party before the marriage …
- Marital debt is (i) all debt incurred in the joint names of the parties before the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent, whether incurred before or after the date of the marriage, and (ii) all debt incurred in either party’s name after the date of the marriage and before the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent.
Your Old Dominion debt will follow you, not your wife, until you are Old. When the Circuit Court passes its divorce decree, you will leave court with that student loan debt, and all other marital debt, balanced against whatever assets you and your wife divided equitably. Ouch.
Her Student Loan Debt
On the other hand, suppose she went to University of Mary Washington (UMW — unless you actually go there, in which case you just call it Mary Wash). She used student loans to cover the cost, and then you two fell in love and married, and then you two fell out of love and wanted a divorce. Congratulations! She owns that debt. Not you.
Our Child’s Student Loan Debt
The college-age child you and your wife created is another matter. Your child is very much a product of the marriage, so the student loan debt you take on (Parents Plus loans, private loans) is marital debt. You both own it.
Debt you and your wife take on to further your child’s education is not the same as debt your child takes on. Student loans your child incurs are neither yours nor your wife’s; they are your child’s.
Equitable, Not Equal
Subtle differences between words excite writers and lawyers. “Equitable” is not synonymous with “equal.”
In the life raft, if everyone gets equal shares of the rations, the scrawny teenager gets the same size crust of bread the burly sailor gets. If everyone gets equitable shares, the burly sailor, rowing with all his might, gets more than the scrawny teenager.
Virginia is an equitable division state. Assets and debts are apportioned, not divided equally. If you earned more during the marriage, you reap more of the assets in divorce.
Conversely, if you have the larger income than your wife, you may find yourself saddled with a larger share of student loan debt (and all the other marital debts, too!).
A Preponderance of Evidence
According to § 20-107.3 (5), if you can show by a “preponderance” of evidence that the student loan debt should not be your responsibility, you have an out:
… To the extent that a party can show by a preponderance of the evidence that the debt … was incurred, in whole or in part, for a nonmarital purpose, the court may designate the entire debt as separate or a portion of the debt as marital and a portion of the debt as separate.
If, say, she took out student loans for herself after you two wed, in a years-long plan to educate herself out of the marriage and into a better job, your attorney could argue it is solely her debt.
Call The Only Family Law Firm in Virginia Representing Men ONLY!
Whether you are the student or parent, student loan debt is yet another challenge in a divorce. Ally yourself with the experienced attorneys of The Firm For Men. Contact our offices or telephone us, 757-383-9184, today. We can help resolve your issues, answer your questions, and aid in your divorce.