Student loan debt has been recognized as a major issue in Michigan and throughout the United States. It may also become a serious problem for divorcing couples as they begin dividing the marital assets and debts. According to Michigan Legal Help, this type of loan is not necessarily automatically awarded to the spouse who originally took them on.
Separate debts do not have to be divided in the divorce, but whether the student loan is separate or marital depends on more than one factor. If a spouse incurred the debt before getting married, it is not considered during the division of property. Signing up for a student loan and using it solely for the costs of the education keeps the debt separate. However, it may be considered a marital debt if the spouses spent some of the money on household or living expenses while they were married.
Before 2005, it was an option for spouses to consolidate their student debt, according to the Boston Globe. For these couples, the division of the responsibility for the loans is much more complicated. This is primarily because once the loans were joined, they could not be divided again. Although each spouse may be ordered to pay a portion of the payment after the divorce, both of them will be held accountable if one person does not pay. Consequently, the other person may end up paying the entire payment to keep from being in default, which could lead to wage garnishment and other debt issues.