A spouse’s financial status can change drastically throughout the process of a divorce. Not only is martial property divided between both parties, but some debts may be split between spouses too. Many divorcing couples wonder what happens to student loans throughout the divorce process. Our knowledgeable law firm has all the answers you need! To learn more about how debts are handled in a divorce, continue reading this blog or contact one of our Debt and Divorce Attorneys in Bergen County, NJ for individualized legal counseling.
WHAT WILL HAPPEN TO MY STUDENT LOANS IN A NEW JERSEY DIVORCE?
This depends on many circumstances. First, you’ll need to figure out when the student loans were accrued by either spouse. Any debts gained before marriage are only the responsibility of the spouse that signed for them. This is because these debts are considered separate property. Meanwhile, both spouses can be liable for marital property (assets or certain debts obtained by either spouse during the marriage) even after the divorce is finalized. This means that no matter which spouse acquired debts while they were still legally married, the debts might be divided between spouses during the legal proceedings.
HOW ARE MARITAL DEBTS DIVIDED IN THE DIVORCE PROCESS?
New Jersey is an equitable distribution state, so the courts divide marital property fairly but not necessarily 50/50 between spouses. A large number of factors are taken into consideration, such as the length of the marriage and each spouse’s income. However, you don’t have to leave this decision up to a judge. Nowadays, many divorcing couples work on a settlement agreement outside of the courtroom with massive success. If you’d like more control over what happens to your assets and overall financial status during the process, you can hire a trusted divorce attorney or mediator.
WHAT IF I CO-SIGNED A LOAN?
If you’ve co-signed on your spouse’s student loans, then you’ll still be liable for these debts in the future. Even if your ex-spouse’s student loan debt was separate property, the divorce won’t change the fact that you’re a co-signer on their loan. Don’t worry though because there are a few ways to legally back out of a loan (or get your spouse’s name off your loan). You can simply refinance the loan to change who the co-signer is. You can also find another lender that allows co-signers with a fast co-signer release.
Are you considering filing for divorce in New Jersey? You might want to speak with an experienced divorce attorney who can help you determine your best financial options. Thankfully, our dedicated law firm is on your side! Contact Townsend, Tomaio & Newmark today for an initial consultation.