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Barbara L. Jouette, Attorney, P.C.
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Considering student loans during property division can be complex

In Texas, property that was obtained during a marriage is considered to be jointly owned by both spouses. Since Texas is a community property state, all marital assets are evenly split during a divorce. However, property that was acquired prior to the marriage, received as a gift or inherited by one spouse is considered separate property and will be retained by the owner.

What about when it comes time to factor in debts? In many instances debts follow the same guidelines as assets. Student loans are a common liability that is often discussed during property division. While it may be easy to assume that the debt automatically belongs to the spouse who took the loan out, that is not always the case. For example, it must be determined if both spouses received some benefit from the student loans. In other words, if one spouse got a lucrative job after graduating, then the liability may be shared. However, chances are that the loan will fall into separate debt if the end of the marriage occurred shortly following graduation.

Another thing to consider is that not all student loans go directly toward educational costs. Oftentimes a couple will live off of their loans to pay living expenses; since this is a good example of both people benefitting from the loans, the debt will likely be shared in this instance.

Property division is a complex valuation that should be calculated by professionals who understand the nuances in laws and how they can affect a couple that is splitting. If you are facing a divorce, consider discussing the matter with a family law attorney for comprehensive assistance.

Source: Forbes, “Are Student Loans Incurred During The Marriage Considered Marital Debt?,” Jeff Landers, Dec. 17, 2013

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