What happens to your student loans in a California divorce?

On Behalf of | Nov 11, 2021 | family law | 0 comments

It is common for divorcing spouses to disagree about what happens with their property. Usually, these disputes focus on assets, like retirement savings accounts and real estate. However, couples can also find themselves bitterly fighting over what happens to their debts when they divorce. 

Some debts are easier to divide than others, just like with assets. Some shared debts, like your mortgage or credit cards, could be in the names of both spouses, making it obvious that they will have to be divided. 

Other debts may only be in one spouse’s name, leading to more confusion and possible conflict. Among those debts held in just one name, student loans could potentially be the biggest financial burden. 

Do you possibly have the option of seeking help from your spouse in repaying your student loans?

Student loans could be part of your community property

California law requires that you treat both assets and debts acquired during the marriage as community property. They belong to both spouses, regardless of whose name is on the account or ownership documents. 

Unless you reach a specific settlement with one another outside of court, a judge will decide the best way to divide your community property. If you took on those student loans during the marriage, they may be part of the marital estate, which means that your spouse could be responsible for half of your student loan debt. 

Unless you and your spouse have a prenuptial agreement addressing the student loans, you may be in a position to ask that their value be factored into how the courts divide your property. Understanding the California approach to property and debt division in divorce can help you set realistic expectations.