How Is Student Loan Debt Handled in a Tennessee Divorce?

If you and your spouse decide that you are no longer happy in the marriage and want to go your separate ways, it is now time to start thinking about your assets, debts, belongings, and most prized possessions.

One of the debts or belongings that must be assessed in a divorce is student loan debt. If you or your spouse have any remaining student loan debt from college, it is crucial to bring this up and inform your divorce attorney early on to ensure that it is properly divided.

How does Tennessee divide marital property?

Tennessee is an equitable distribution state. This means that Tennessee divides marital property in a way that the court believes is fair, which does not always mean that it is equal or 50/50. If you are wondering what marital property is, it can be any belonging, asset, debt, or money that the married couple received or made during the marriage. On the other hand, separate property is any belonging, asset, debt, or money that the individuals received or made separately before the marriage. Therefore, it is important to know and understand the difference between your marital property and separate property, as marital property is what gets divided during the divorce process.

Here are a few of the factors that the judge will take into account when determining how to divide your marital property:

• The length of the marriage
• Your and your spouse’s age and health
• How much money you and your spouse make
• How much your and your spouse’s separate and marital property is worth
• Whether any sacrifices or promises were made (one parent stayed home to take care of or educate the children)

While many divorces cite irreconcilable differences, couples can opt for a fault-based divorce, where the court may award more marital property to the innocent spouse.

Are my student loans considered marital or separate property?

Determining whether student loans are considered marital or separate property can be complex. Here’s a general guide:

• Marital property: Student loans taken out during the marriage, particularly if both spouses’ names are on the loans, are typically considered marital property. If the loans are solely in one spouse’s name, they may still be considered marital property if it can be demonstrated that both spouses benefited from the education financed by those loans (e.g., improving the family’s standard of living).
• Separate property: If a student loan was incurred before the marriage, it is generally regarded as separate property, meaning the spouse with the loan is typically responsible for repayment. However, if a spouse claims financial hardship post-divorce, a judge may still order the other spouse to contribute to the loan payments.

Can I remove my name from my spouse’s student loan?

Removing your name from a spouse’s student loan is possible but may not be straightforward. If you co-signed for the loan, you could still be held liable for repayment even if your name is removed. Many lenders require the borrower to prove they can independently qualify for the loan before allowing a co-signer to be released.

What if we have a prenuptial agreement that mentions student loans?

If you and your spouse created a prenuptial agreement that mentions student loans, you should show this document to your attorney right away. They will look over the facts and details of the agreement to determine what you and your spouse agreed upon, as well as ensure that it is legally valid. If it is found that you and your spouse stated that the student loans will be considered or remain separate property, the prenuptial agreement may work in your favor. However, there are several different scenarios that could arise and cause challenges, such as:

• The prenuptial agreement is not in writing.
• The prenuptial agreement is not signed by either you or your spouse.
• Your spouse stated that the prenuptial agreement is unfair or one-sided.
• Your spouse says that they were threatened or coerced into signing the prenuptial agreement.

Do I need a Franklin divorce lawyer?

If you are thinking about pursuing divorce and know that student loan debt will be a factor, you should strongly consider hiring an experienced, skilled, and knowledgeable divorce lawyer. This type of debt requires careful assessment, which a Franklin divorce attorney can assist you with. They can also guide you through the entire divorce process, ensuring that you know what to expect and are ready to handle any obstacles or complexities that arise. The goal is to collect all loan documents and records, gain an understanding of your and your spouse’s finances, and ensure that all debts, including student loan debt, are fairly divided based on this information.

At the Law Offices of Adrian H. Altshuler & Associates, we understand how difficult it can be to go through a divorce. Therefore, when you add certain factors into the divorce process, such as student loan debt, it can feel mentally exhausting, overwhelming, and almost impossible at times. However, with our Franklin divorce attorney by your side, you can have peace of mind knowing that he will do everything he can to fight for the best outcome possible for your case. Please call our office or submit our contact form to schedule a case evaluation to learn how you can obtain a fair resolution based on your needs and wants today. Our offices are located in Franklin, Brentwood, and Columbia for your convenience.