What Happens to Student Loans in a Divorce?
Americans collectively owe nearly $1.5 trillion in student loan debts.Statistically, this means that 1 out of every 4 adults nationwide arecurrently part of a college debt repayment plan. The standard federalrepayment plan takes at least 10 years to complete, and it’s notuncommon for people with student loan debts to marry and divorce withinthat same time period. But what happens to student loan debts during a divorce?
Debt division is a vital aspect of the divorce process. Typically, onlydebts incurred during the marriage are included in the marital estate.Illinois is an equitable distribution state, which means that debt isdivided “fairly” and per the will of the court. Fairly, however,does not mean “equally.” The court must evaluate several factorsbefore determining if one spouse’s student loan debts should bepart of the distributable marital estate.
The court makes its determination based on the following:
- Was the debt incurred during the marriage?
- What was the duration of the marriage?
- Who benefitted from the student loans?
- How was the loan money used?
- What is the earning power of each spouse?
- Are there any legal pre-existing agreements between the spouses?
Unfortunately, the courts aren’t consistent in their rulings. Ifyou want to secure a beneficial divorce settlement agreement, you’regoing to need the services of a skilled and knowledgeable divorce attorney.Your lawyer can represent your best interests in court and fight for asettlement that benefits your personal needs and circumstances.
Prepare for Your Future Today
Contact Wakenight & Associates, P.C. if you require legal representationor have concerns about how student loan debts may impact your divorcesettlement. OurIllinois divorce attorneys can help you through this life-changing process and fiercely representyour interests in court.
Contact Wakenight & Associates, P.C.if you require legal guidance. Our firm has offices in Oak Park, Mokena,Joliet, Aurora, Elmhurst, and more!