Is Spouse Liable For Student Loan Debt
debt liable loanFirst a quick primer on how assets and debt are divided in a divorce. When You Are Liable for Your Spouses Student Loans.
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If the deceased had a will the person designed to handle the estate is called the executor.
Is spouse liable for student loan debt. First one spouse isnt liable for the other spouses loans taken out during college. Student loan debt that your spouse incurred before youre married will almost never be considered your liability. Family members including spouses are generally not responsible for paying off the debts of their deceased relatives.
If youre a cosigner youre legally responsible for the debt if the borrower stops repaying the loan which can make you subject to. As of 2010 the average amount of student loan debt for undergraduates was 21000. When one or both partners have debt coming into the marriage the debt belongs solely to the person that incurred them.
Instead any outstanding debts would be paid out from the deceased persons estate. More on that below Both federal student loan debt and private student loan debt usually remain the borrowers sole responsibility if the student loans were incurred before marriage. A Spouses Student Loans Generally a living spouse will not be held legally responsible for repaying student loans that belonged to the deceased spouse.
An estate is comprised of cash investments possessions property and life insurance proceeds. In most states if your name is on the loan youll be responsible for continuing to make student loan payments after youve separated. However there are some exceptions such as when the spouse has co-signed the loan.
A spouse is typically not responsible for student loan debt incurred before marriage. In many cases one party may have had student loan debt prior to the marriage in almost all cases you will not be responsible for your spouses student loan debt that was incurred prior to the marriage. A civil partner or spouse is not automatically deemed responsible for the debt.
Neither of you would be responsible for the other persons debt in that scenario. The good news for a spouse who does not want to be saddled with the other spouses student loan debt is that that debt is often incurred before marriage making it the other spouses separate debt. So if the spouse with student loans dies the surviving spouse doesnt have to pay them back.
1 Say for example you have 15000 in private student loans in your name. For example if the husband took out Federal student loans to pay for school his wife isnt responsible for the debt even if they are married. For example a prenuptial agreement can specify that student loans borrowed for a spouses education will remain that spouses separate debt regardless of whether the debt is borrowed before or during the marriage.
Its a different story however if you cosigned for your spouses student loans before the marriage. If your spouse is on the loan he or she will. Even with a good job many graduates are struggling to make payments on their loans and provide for a.
Generally those states view both assets and certain debt that accumulated during the marriage as equally owned by each spouse meaning a surviving spouse could be responsible for paying back the. If you live in one of these community property states you may wind up sharing the student loan debt with your spouse. That includes credit card debts student loans car loans mortgages and business loans.
An exception to this is if you cosigned on your future spouses student loans or if you refinance the student debt with your spouse after youre married. Separate or Marital Debt. Your spouse may have responsibility if any of your student loans went towards shared expenses.
Is your spouse responsible for student loans incurred before marriage. Again the answer to this question is most often no. Your spouse-to-be has 10000 in credit card debt in their name.
If your spouse has similar earning power then the court may hold him or her responsible for some of the debt as opposed to those who do not have strong earning power or put their career on hold to support your education. Unfortunately that means that if one of you cant pay for any reason including accident sickness abandonment or even death the other partner will be responsible for the entire debt. Any joint debts you have will be treated by the lender as jointly and severally liable.
That includes new loans used to pay for. And thats usually true even if they live in community property states. Even though student loans are usually considered an investment in your future that is a large sum of money to have to pay back.
If you and your spouse co-sign on student loans together either before or after marriage youre both considered equally responsible for the resulting debt. If your spouse decides to pursue a degree after you tie the knot and pays for it with student loans your location may dictate whether or not youll be responsible for them.