Who Pays the Student Loans in an Uncontested Divorce?
More and more people make use of student loans to help pay for their education. As recently as 2009 almost 60% of Texas students graduated college with student loan debt. If you add on graduate school student loan debt can easily exceed $100,000. If your soon to be ex-spouse has student loans with a significant balance you may be very concerned about how the student loan debt can be allocated as part of a Woodlands Divorce. With the great amount of discretion given to judges, you are right to be concerned. Fortunately, a recent case sheds some light on how the courts are examining student loan debt and divorce.
Albert and Sophia began living together in 1987. One year later, Sophia gave birth to their only child. To help cover living expenses, Sophia’s educational expenses, and the expenses of Albert’s asbestos consulting business, Sophia applied for and received student loans totaling over $90,000. In February 1994, Albert and Sophia married, and in 2002, Sophia filed a petition for divorce.
In a surprise ruling, the trial court ordered Albert to pay Sophia’s entire student loan debt. Albert’s divorce attorney quickly filed an appeal on this critical issue.
Student Loan Debt
Albert’s divorce attorney argued that the trial court was legally wrong when it ruled that he had to pay Sophia’s student loan because the loans were taken out before they were married.
Property owned or claimed by a spouse before marriage or acquired after marriage by gift, devise, or descent is that spouse’s separate property. A court may not decree that separate property of one spouse becomes the separate property of the other spouse because “the nature of separate property is determined by the Texas Constitution, rather than by what is ‘just and right.’”
Sophia’s divorce attorney did not dispute that the student loans were acquired before marriage. At trial, Sophia testified as follows:
Q All right. Ma’am, you and your husband got married in 1994. Isn’t that a fair statement?
Q And these student loans that you made, you made long before 1994, didn’t you?
A I made them before 1994.
Q Okay. So, these are not even community debts, are they? These are your separate property debts?
A Yes, I guess you can say that.
When Sophia received the student loan proceeds, those proceeds constituted Sophia’s separate property.
If the divorce court had awarded Albert part of the student loan proceeds, it clearly would have been in violation of Sophia’s separate property right to the proceeds.
The appeals court relied on this point to characterize the pre-marriage student loan debt as separate debt which could therefore not be assigned to the other spouse.
Protect Your Rights
Don’t get stuck paying for a debt that is not yours. Call (832) 592-7913 and speak with a Montgomery County Divorce Attorney at The Shea Law Firm.
To find out more about divorce in Montgomery County take some time to review my free Woodlands Divorce Guide
About The Author
The Woodlands Divorce is here to help you with your divorce, child custody, or other family law issue in Montgomery County or Harris County. Many of our visitors come from the areas of The Woodlands, Conroe, Oak Ridge North, Cut and Shoot, and other communities in the Montgomery County area or Houston and North Harris County. If you need legal assistance with your family law issue speak with a Montgomery County divorce lawyer in The Woodlands, TX today and protect your rights. Contact The Shea Law Firm at (832) 592-7913.