Who Owes Student Loan Debt in a Divorce…is it Joint?
In the US Americans owe approximately $1.77 trillion dollars in student loan debts. That is a staggering figure! So, understandably, figuring out how these loans are dealt with can be very important for couples contemplating a divorce. In Ohio, there are many factors that need to be considered. Ohio is an equitable property division state. That means that the Court does not have to divide marital debts equally but only in a “fair or equitable” manner.
WAS THE DEBT INCURRED BEFORE THE MARRIAGE?
If so, the general rule in Ohio is that such a loan would be considered personal to the individual who incurred it. That person would continue to be solely responsible to pay his/her student debt loan.
WAS THE STUDENT LOAN DEBT INCURRED AFTER THE MARRIAGE?
Student loans obtained by one spouse during the marriage may be categorized as marital debt subject to equitable distribution. Heavilin v. Fillman, No. 2019-AP-04-0014, 2019 Ohio App. LEXIS 5502, at *10 (Ohio Ct. App. Dec. 23, 2019); Harris v. Harris, No. 2006-CA-0003, 2007 Ohio App. LEXIS 1160, (Ohio Ct. App. March 16, 2007); Webb v. Webb, No. CA97-09-167, 1998 Ohio App. LEXIS 5615, (Ohio Ct. App. Nov. 30, 1998); Shoenfelt v. Shoenfelt, No. 17-14-13, 2015 Ohio App. LEXIS 192, (Ohio Ct. App. Jan. 26, 2015). Under Ohio statutory law, the trial court is required to “determine what constitutes marital property and what constitutes separate property.” Ohio Rev. Code. §3105.171(B).
If this is the case, the Courts will need more information to determine if the student loan should be considered marital debt, i.e., joint.
Those factors might be:
- The length of the marriage
- Who the debt benefited.
- Did the spouse who borrowed the money earn a degree?
- How the student loan money was spent.
- Which spouse’s name is on the loan and whether the other spouse co-signed on it.
- Incomes of both parties.
- How other debts and assets will be divided.
Though a trial court may conclude the student loans are marital debt, the debt may properly be allocated to the party who incurs the debt. Heavilin, 2019 Ohio App. LEXIS 5502, “By removing the loans from the class of separate liabilities, the trial court is given the greatest power to enter an equitable division of the marital estate and allows the court to consider all of the circumstances surrounding the parties’ positions when the loans were first taken out and at the time of the divorce.” Webb, 1998 Ohio App. LEXIS 561.
These factors can be difficult to analyze. An experienced divorce lawyer in your area should be consulted for his or her opinion. Often the loan money is used for family living expenses such as food, rent, utilities and vehicles which can complicate the analysis.
Also understand that the division of any debts by the Court in a divorce is just between the two parties. It would not in any way affect who is legally responsible for repaying the loan with the lender. If you are the named borrower and you don’t pay it, the lender can come after you!
WAS THE STUDENT LOAN INCURRED DURING THE MARRIAGE FOR A CHILD’S EDUCATION?
If this is the situation it is likely the student loan will be considered a marital joint debt. But some facts might result in a different outcome.
PUBLISHER’S NOTE: I want to thank law clerk Evan Pennington for his help researching Ohio case law for this blog post. Nice job Evan!
We are Experienced, Trusted and Professional Dayton Divorce Lawyers
If you are considering a divorce or dissolution proceeding, you should carefully consider how to divide any student loan debts. Our divorce lawyers can evaluate your specific situation. Our firm is located in Dayton, Ohio and we practice throughout southwestern Ohio.
To learn more, please go to our website at www.hcmmlaw.com or call Holzfaster, Cecil, McKnight & Mues at 937 293-2141. We can promptly schedule an in-person conference or one by phone or Zoom.
Please consider joining or following us!
© 2023, Ohio Family Law Blog. All rights reserved.
Attorney Robert “Chip” Mues has been focusing his legal practice throughout Southwest Ohio primarily in divorce and family law matters since 1978. Chip is passionate about family law and has proudly published the Ohio Family Law Blog since 2007. In addition, he is the managing partner of Holzfaster, Cecil, McKnight & Mues. To learn more about him or the law firm, visit the firm’s website at www.hcmmlaw.com. Appointments are available in person, over the phone or by Zoom. Call us at 937 293-2141.
