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Tuesday, April 15, 2014

Law - "Who Is Responsible for the Student Loans After Divorce?"

Charles Wells' "Wealth Mnagement" column in the $$ WSJ April 13th is sub-headed "Misconceptions abound, but how educational debt is divided may depend on where you live." A few quotes:

Legal experts say one of the most common misconceptions about dividing debt in a divorce is the belief that educational debt incurred before a marriage always becomes shared, marital debt once a couple gets hitched.

New York divorce attorney Cari Rincker says her mother once quipped that she couldn't wait for Ms. Rincker to "get married because half of [her] student debt will be his."

Ms. Rincker, who is single, had to correct her mother: Generally, educational debt incurred before a marriage is considered separate property and barring some predetermined contractual agreement, it stays that way after a divorce. "My law-school-loan debt is forever mine," Ms. Rincker says. "No spouse will ever be liable" for it. * * *

Debt division can get a little trickier when the student loans are taken out during the marriage. The person responsible for paying the loans isn't necessarily the person whose name is on them. Indeed, how educational debt is divided may depend on where you live and who benefited from the borrowed money.

Posted by Marcia Oddi on April 15, 2014 01:43 PM
Posted to General Law Related