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Student loans may be considered in New Jersey property division

When New Jersey couples divorce, they often rely on how our state laws are designed to help them split their assets. However, debts are also a part of property division and typically use the same principles as assets. When it comes to student loan debt, particularly if only one spouse acquired it during the marriage, things may get a little more complicated. It may be helpful for divorcing couples to understand the factors that are considered when determining whether student loans are separate or marital debt.

If the student loan was applied toward tuition and textbooks, it is typically considered to be separate debt. The same is usually true if the couple divorces just after one spouse earns a degree. However, if the student loan helped pay for the couple's living expenses, it may be considered marital debt since both spouses benefitted from it. In addition, if the loans resulted in a degree that added substantially to couple's income over a period of time, then the debt will typically be considered marital debt.

To further complicate matters, some states consider professional degrees to be separate property and some do not. This often determines whether the student loan will be separate or marital debt. In general, if it is marital debt, each spouse's income and earning potential will typically be considered to determine how to divide it equitably.

Student loans, of course, are just one part of a complex property division process. Divorcing couples in New Jersey may find the process much less stressful if they work with legal counsel that understands all the laws associated with dividing assets and debts. In addition, this may help ensure that each spouse receives fair treatment and will be able to manage the debt once the marriage has ended.

Source: Forbes, Are Student Loans Incurred During The Marriage Considered Marital Debt?, Jeff Landers, Dec. 17, 2013

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