Divorcing while in debt can often make a difficult situation even more challenging. If you or your spouse has student loan debt and you are unsure how this will work during your divorce, the information below may provide some assistance for your Mississippi divorce.
Student loans after a divorce
There are several options as to what can happen during your divorce if one or both of you have student loans. It is critical to consider the loan date, whether there was a co-signer and if there is an income-driven loan repayment plan.
Typically, student loans that were already issued before your marriage are personal debt. If neither of you took out loans to go back to school after getting married, you are each held responsible for your personal debt.
If, on the other hand, one or both of you took out loans during the marriage, determining who owns the debt may be a bit challenging. This is especially true if a spouse cosigned the loans. Often, when one spouse has cosigned for a student loan, the debt is marital. Thus, the co-signer is usually responsible for the debt even after divorce. To eliminate this, the spouse who has the debt may agree to refinance the loan under their name only.
If you or your spouse has taken on income-based repayment plans for student loans, keeping the loan company informed of changes in income will be vital. Customarily, both spouses’ incomes determine the repayment plan payment for income-driven programs. Letting the loan provider know of a change in income can help reduce loan payments.
Complex student loan cases and divorce
Given the complexity of navigating student loan debt repayment, it may be helpful to request the services of a divorce attorney. Finding one who is well-versed in dividing assets might better help you navigate separating your debts and assets and leave you in a better position financially. Although it may not be ideal to divorce with student loan debt, it is possible to do it equitably with your spouse.