In states with community property laws, student loan debt incurred during marriage is generally considered community property.
Complete answer
In states with community property laws, student loan debt incurred during marriage is generally considered community property. This means that both spouses are responsible for repaying the debt, regardless of who actually took out the loan or whose name is on the loan agreement. Community property laws typically apply to couples who live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
According to Forbes, “There are varying degrees of community property, but generally it means that any property acquired during the marriage is owned equally by both parties, and any debt incurred during the marriage is also owned equally by both parties.”
It’s important to note that if a student loan was taken out before marriage, it’s usually considered separate property and not subject to community property laws. Additionally, if a couple signs a prenuptial agreement that outlines how student loan debt will be handled in the event of divorce, it may override community property laws.
Student loan debt can be a significant financial burden. According to the Federal Reserve, Americans owe over $1.7 trillion in student loan debt. This debt can often follow borrowers for years or even decades after they graduate. For couples living in community property states, it’s important to understand how this debt will be handled in the event of divorce.
Table:
| Community Property States |
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| Arizona |
| California |
| Idaho |
| Louisiana |
| Nevada |
| New Mexico |
| Texas |
| Washington |
| Wisconsin |
Quote:
“There are varying degrees of community property, but generally it means that any property acquired during the marriage is owned equally by both parties, and any debt incurred during the marriage is also owned equally by both parties.” – Forbes
Related video
The video discusses the tax implications for married couples in community property states who are applying for the Public Service Loan Forgiveness (PSLF) program. In such cases, filing separately for taxes can be beneficial as it can eliminate the tax penalty and lower student loan payments based on a lower income. However, this can get complicated and seeking the help of an expert is recommended.
Other responses to your inquiry
Student loan debt is considered community property as long as it was (1) borrowed during a marriage and (2) while the married couple were living in a community property state. Student loan debt that meets these two criteria will most likely be recognized as community property or marital debt.
So, are student loans community property (debt)? Yes, but that doesn’t mean you should simply conclude that the student will or should be divided equally. If circumstances in your case suggest that an equal division would be in equitable, it might be worthwhile to pursue that legal position.
With one exception (see below), the community property rules apply to student loan debt the same way they apply to other debts acquired during the marriage. Both spouses are responsible 100% for a student loan taken out during the marriage even though only one spouse signed for it.
For student loan debt that is community property, a judge will consider other factors in determining how the debt should be handled.
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Are student loans community debt in a divorce?
How Is Student Debt Assigned During a Divorce? Instead, California law considers student loan debt to benefit, by default, the individual and not the community. California Family Code Section 2641 assigns loans incurred either before or during a marriage for the education or training of one spouse to that spouse.
Is a spouse liable for student loan debt?
Response will be: Marriage does not make you responsible for student loan debt your spouse incurred before you tied the knot. Each spouse remains responsible for the debt they borrowed to pay for school. Even if you live in a community property state, premarital debt is considered separate property.
What is the relationship between student debt and home ownership?
The answer is: Statistics indicate that student loan debt decreases prospective homeowners’ ability to make a down payment and to qualify for a mortgage; most Americans cannot afford to purchase a home without a mortgage.
Is spouse responsible for student loans California?
If someone incurs student debt before entering into a marriage, that debt would be the person’s separate property, and the spouse would not be liable for same. One exception to this is if both spouses consolidated pre-marital student loans into one loan in both partners’ names.
Do community property rules apply to student loan debt?
Response to this: With one exception (see below), the community property rules apply to student loan debt the same way they apply to other debts acquired during the marriage. Both spouses are responsible 100% for a student loan taken out during the marriage even though only one spouse signed for it.
Are student loans exempt from community debt in California?
The reply will be: In short, student loans are NOT exempt from community debt if the loans were taken out during the marriage. Califronia is a community property state. Consequently, all assests aquired and all debts incurred DURING the marriage (before separation) are shared equally, unless there is a prenuptial agreement that provides differently.
Is my spouse responsible for my student loan debt?
Answer to this: Marriage does not make you responsible for student loan debt your spouse incurred before you tied the knot. Each spouse remains responsible for the debt they borrowed to pay for school. Even if you live in a community property state, premarital debt is considered separate property.
Is California a community property state?
California is also a community property state, but it treats student loans separately. Community property states consider both parties responsible for all debt accrued during the marriage. So you are both technically liable — 50/50 — for any new student loan debt acquired during your marriage, regardless of who borrowed or attended school.
Do community property rules apply to student loan debt?
With one exception (see below), the community property rules apply to student loan debt the same way they apply to other debts acquired during the marriage. Both spouses are responsible 100% for a student loan taken out during the marriage even though only one spouse signed for it.
Are student loans exempt from community debt in California?
Response: In short, student loans are NOT exempt from community debt if the loans were taken out during the marriage. Califronia is a community property state. Consequently, all assests aquired and all debts incurred DURING the marriage (before separation) are shared equally, unless there is a prenuptial agreement that provides differently.
Is my spouse responsible for my student loan debt?
Response will be: Marriage does not make you responsible for student loan debt your spouse incurred before you tied the knot. Each spouse remains responsible for the debt they borrowed to pay for school. Even if you live in a community property state, premarital debt is considered separate property.
Are assets and debts considered community property?
As a response to this: As assets and debts come into the marriage, they are considered community property. The items that money buys are considered equally owned by both spouses. And just as both spouses are responsible for helping grow assets in the marriage, they are also equally liable for debts.