Considering Student Loan Debts in Property Division

In equitable property division states like Georgia, the marital property and assets of both divorcing parties is divided based on what is fair and equitable for each. Unlike in community property states, Georgia, Georgia readers should take note that equitable property division does not always result in a 50/50 split, because there are a lot of things being considered to determine a fair divorce settlement.

Besides the marital property and assets, both parties debt must be divided as well. Mortgages, personal loans and car loans are among the marital debt to be divided in property division, together with student loan debt.

Student loan debt becomes a family law issue since many Americans, including Georgia residents, are using the financial aid to earn a degree that will land them a good-paying job. When divorce happens, however, both spouses may be financially liable for the student loans incurred by one of them.

In the event of a divorce, student loan debt may be subject to property division if the money obtained from the loan was used for household expenses and other costs. If the loan was spent for school fees, books and tuition, it may be considered separate debt. Factors like the earning power of each spouse may affect the division of debt in divorce as well. For example, if one spouse does not have a significant income or less earning potential, it might be fair for the other party to pay the student loan. The simplest rule that applies on property division and debt is whether the money obtained in the loan benefitted both parties.

Dividing marital property in a Georgia divorce is sometimes complicated. It might be more complicated, however, if marital debts, like student loan debt, are included. Spouses may be less interested about debts, but it must be taken into account if they desire to have a fair and equitable divorce settlement.