How Is Student Loan Debt Divided in an Illinois Divorce?

 Posted on September 21, 2020 in Divorce

For many people, going to college to get an education is an important step that they must take to advance themselves in their careers. However, college education does not come with small price tags. According to Forbes, there are approximately 45 million people in the United States with student loan debt, the majority of which owe between $20,000 and $40,000. Student loan debt may be one of the largest debts that either you or your spouse have. If you decide to get a divorce in Illinois, debt can be an important factor when it comes to asset and debt division since you are required to allocate all of your property and liabilities. An experienced Illinois divorce attorney can assist you with this process.

Are Student Loans Marital or Nonmarital Property?

Before you can even begin to look at dividing up student loan debt, you must first look to see if the debt is technically marital or nonmarital property. If the student loans were incurred before the marriage took place, then they would be considered non-marital property and would likely remain the responsibility of the person who incurred them. If the student loans were obtained after the marriage took place, they are considered marital property and will be subject to division.

Who Is Responsible for Paying?

Illinois law follows an equitable manner of asset distribution, rather than an equal manner. This means that student loan debt will not always be split in half or assigned to just the spouse who incurred the debt but rather assigned to each spouse. When it comes to making the actual determination as to who is allocated responsibility for paying which debts, there are certain factors that are used to determine the appropriate allocation of debts to asset ratio. Relevant factors could include:

• How the other assets and debts were divided: One of the biggest factors will be how other pieces of the puzzle have come together. All of a couple’s assets and debts must be distributed between the two of them before the divorce is finalized. Sometimes, student loans can be used as a bargaining chip if there was a certain asset or debt that one spouse wanted in exchange.

• A large difference in income: Even if one spouse took out student loans to further his or her education to get a better paying job, there is no guarantee that he or she will get the job of his or her choice immediately after obtaining a degree. If one spouse is in a job that pays much less than the other spouse, more of the student loan debt may be the responsibility of the other spouse, even though it was not his or her debt to begin with. 

• Your spouse cosigned on the loan: If you or your spouse took out loans for school and the other spouse cosigned on the loan, it is highly likely that both you and your spouse will both continue to be responsible for repaying the loan after the divorce is over. 

Contact a DuPage County Divorce Attorney Today

The financial side of things in a divorce is extremely important -- just as important as the emotional side. If you have student loans and you are considering filing for divorce, you should speak to a skilled Wheaton debt division lawyer as soon as possible. At the Goostree Law Group, we understand that finances can sometimes become complicated, especially when their marital property status is ambiguous. To learn more and schedule a free consultation, call our office today at 630-364-4046.

Sources:

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K503
https://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000