Student Loan Debts and Property Division in Your Georgia Divorce
Georgia is an equitable property division state, which means that in a divorce, the parties’ marital property should be divided between them in a fair and equitable manner. An equitable division, however, does not always mean an equal division. Georgia law treats debts in a similar manner; all marital debts are divided equitably between the parties.
With student loan debt at an all-time high across the country, it is not uncommon for one or both spouses to have incurred student loan debt. Essentially, the court will treat student loan debt just like any other debt. The court will first determine whether the student loan debt is marital or separate debt. If the loans were taken out by the spouse prior to the marriage, then they are considered to be separate debt, which becomes that spouse’s sole responsibility. If, however, the loans were incurred during the marriage, they may constitute marital debt that must be divided equitably between the parties.
Dividing student loan debt, however, is not always as easy as it might seem. In some cases, the debt may be a joint loan that was acquired to fund only one spouse’s education, which might make the debt more in the nature of separate property. On the other hand, if the loan proceeds were used to pay for household expenses while one spouse was attending school, it might more fairly be characterized as marital debt. The earning potential of each spouse is another factor to consider; if only one spouse has the financial capacity to repay the loan, then the debt may become the responsibility of that spouse. Furthermore, no matter how the court allocates the debt between the parties in the divorce, the loan servicing company may require refinancing of the debt or a court order (sometimes a contempt of court order) to enforce the division of this debt.
If you have questions about how best to handle your divorce case, including the proper division of student loan debt and other types of debts, the Shaw Law Firm, LLC, can assist you. We will evaluate your situation and advise you of our proposed strategy for your case. Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.
Scott Shaw is founder and principle of Shaw Law Firm, LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.