How are student loans divided during the Texas divorce process?

Several factors may be considered while determining whether student loan debts are separate or community property during the divorce process.

When couples in Texas divorce, their assets, which may include their household furnishings, real estate and vehicles, as well as their student loans and other debts are divided. Since, according to the Internal Revenue Service, Texas is a community property state, in many cases, debts and assets are distributed evenly between both spouses.

Separate versus community property

Although some assets are divided evenly during the divorce process in Texas, how student loans are distributed depends on whether they are considered separate or marital property. According to the Texas Family Code, separate property includes any assets that were:

  • Acquired by a spouse in the form of a gift or an inheritance
  • Obtained by a spouse before he or she got married
  • Acquired as a result of a personal injury case that occurred during the marriage

To establish a student loan's status as separate property, clear and convincing evidence that the debt was acquired before the marriage occurred must exist. Comparatively, any property obtained during the marriage that does not meet these qualification is typically viewed as community property. This means that if a student loan was acquired while a couple was married, the debt may be divided equally between both spouses.

Factors that are considered

During the divorce process, spouses may be concerned that they will have to pay off an equal portion of their spouse's student loan debt if they were not the one who went to school. However, Forbes states that when the court divides student loan debts, they often take into account several different factors.

For example, if one spouse used his or her student loans to strictly pay for tuition, fees and books as he or she pursued higher education, the debt may be viewed as separate property during the division process. However, if the loans were used to pay for an apartment that both of the spouses lived in while the husband or wife was in school, it is more likely that the debt will be considered community property.

Additionally, during the property division process, those who benefitted from the debt in addition to which spouse acquired it is often considered. For example, if a spouse obtained student loans in order to pursue a professional degree and eventually made a substantial income that both spouses enjoyed, the student loans will likely be viewed as community debt.

Consult with an attorney

Before property division proceedings commence, Texas spouses may want to get a better idea of whether or not student loans, or any other type of debt, will be considered separate or community property. If you are in a similar situation, turn to an attorney for assistance with this process.

Keywords: divorce, property, division, community, marital, separate