Status of Student Loan Debt After a California Divorce

Posted by: Gerald A. Maggio, Esq.

Best Orange County divorce lawyers; The Maggio Law FirmMarriages come with many responsibilities and one of them is supporting a spouse with his/her student loans. Paying back the educational loan can be tough for some and becomes even tougher once a divorce takes place. Current statistics show that college students who take up educational loans end up with huge debts which become hard to pay. In a marriage, the debt can be cleared by both spouse but it’s not as easy as it sounds. It can get complicated and after a divorce, students loans can look like a huge burden.

Finances are an important factor when it comes to a marriage and a divorce and most individuals are extremely cautious about how they spend their money. Debts are never pleasant and paying for something which is not yours can be even more painful.

How is the student loan divided before and after the marriage?

If you and your spouse have taken an equal amount of student loans, then each is responsible for their own debts. In such cases, divorce arrangements become easier to work out. However, if one of you has more debts than the other person, separate arrangements must be made to pay off the debt. Sit with your legal counsel and chalk out a plan to clear the debt. Student loans are often seen as property by a court of law and upon marriage and divorce, it is treated in the same way. So, if you had the student loan prior to the marriage, it becomes a separate property and should be cleared by you. However, if the loan was taken after you got married, then during a divorce, it can be treated as marital property. Then again, if the loan was taken by the person who does not have an income after marriage, the situation becomes trickier. If the other spouse took care of the student loan, then the court has the right to favor him/her during a divorce.

Loans are supposed to be paid by the person who took it but it does not always work out in a marriage. Having a student loan and having a job are not always related. Finances are an important part of divorce proceedings and no individual wants to pay more than he/she has to. Incurring student loan debts can be financially tough for the person it has been burdened with it. Student loan debt issues should be consulted with an experienced Orange County divorce lawyer.

Getting divorced in California can be complicated! Click the following link to download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.

How To Handle College Funding for Children After A Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce lawyers; The Maggio Law FirmAccording to studies involving the topic of parental support towards higher education, it was found that around 29% of divorced parents provided college funding, while the figure was at 88% for intact families. Divorced parents also covered 42% of college cost, while intact families covered 77%.

This brings to light the question of whether divorced parents need to fund a child’s higher education expenses. In some states, the court has the right to rule in favor of parental funding for higher education even after a divorce. However, California is not one of those states. However, if there has been a written agreement guaranteeing funding, the courts in California do have the power to enforce it.

So, to put it simply, as a California parent who is divorced, you are not obligated to fund your child’s higher education. However, if you’re a parent who intends to do so and want your ex-spouse partner to do the same, you will need to come up with a legal agreement.

Here are a few tips to help you with that.

Negotiate with Your Partner during the Settlement

Discuss college funding with your partner while the settlement process is still on. Decide on how much you will allocate towards the fund and request your partner to do the same.  Though financial situations do change, having a legal agreement will serve as a reliable baseline from where you can start again.

If you’ve been saving or investing towards your child’s college fund, make sure you address it in your settlement as these savings/investments are seen as marital property. Similarly, if there is a 529 savings plan, speak to your ex-spouse and discuss how you both will address deposits/withdrawals post-divorce.

In general, it would be a good idea to freeze the account in order to prevent the ex-spouse from misusing the funds. In some cases, the Judge may divide the plan, enabling both partners to contribute equally.

Financial Aid

If your child is dependent on financial aid, the custodial parent is tasked with filling the FAFSA forms. However, it isn’t so simple when the custody situation is still at play.  The custodial parent’s pay is factored in when deciding the child’s eligibility.

So, both partners need to come to an agreement if they don’t want to risk denying their child financial aid. An agreement made in advance can save a lot of trouble.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

 
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