If you are undergoing a divorce, you may be wondering how your and your former spouse’s debts will be divided. As a general rule, the timing in which you incurred your debt will matter greatly to the New Jersey courts in their decision-making process. Read on to discover what happens to your student loans in your divorce and how a seasoned Bergen County equitable distribution attorney at McNerney & McAuliffe can help determine your debts.
How will my student loans be distributed in my divorce?
Before answering this question, it is worth reviewing New Jersey’s equitable distribution law. This law states that marital assets and debts will be split in a way that is fair for both parties rather than split 50/50. Notice that, under this law, only marital assets and debts are subject to be divided. Marital assets and debts are considered those brought into the marriage or acquired during the marriage. On the other hand, separate assets and debts are considered that were completely left out of the marriage.
And so, the New Jersey court will have to determine whether your student loan debt is considered a marital debt or a separate debt before declaring how it will be distributed in your divorce. For one, if you and your former spouse took on new student loans after getting married, the court will consider this a marital debt and distribute it accordingly. And if you and your former spouse took on student loans before you got married, then that separate debt will remain with the respective party.
How can I ensure that student loans are distributed fairly in my divorce?
For one, if you and your former spouse signed a prenuptial agreement before you got married, it may be in your best interest to go back and reference this document. This is because you may have included a clause in there that directs how debts, including student loan debts, should be divided in the event of a divorce. And if you did not sign a prenuptial agreement but you anticipate a divorce in the future, then a postnuptial agreement may have a similar effect.
And say, for instance, that you and your former spouse co-signed a student loan. Even if this loan was primarily for your former spouse, as a co-signer, you are still responsible for the debt even if you are no longer married. Meaning, you are still responsible for repaying this debt if your former spouse cannot. In this case, you should negotiate with your former spouse to refinance the loan in their own name or to obtain another lender that allows co-signers.
If you require additional guidance, you must seek out a Bergen County family law attorney today.