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Student Loans and the Division of Debts in a San Diego Divorce

On Behalf of | Nov 30, 2020 | Divorce

What happens with student loans and the division of debts in a San Diego divorce?  How are assets and debts characterized and divided during a divorce?

The division of community property is a complex process in many San Diego divorce cases.  Generally speaking, property and debt acquired before the marriage is considered to be “separate” from the community assets of the couple.  Anything acquired or debt created during the course of the marriage will probably be considered part of community property.  Community property (assets and debts) in a California divorce is to be equally divided between the parties in most cases.

As a general rule student loans and the division of debts in a San Diego divorce is all about how and when they were acquired.  If each of the parties obtained student loans and completed their education prior to the marriage the student loans will remain with the original debtor.  This gets a lot more complex when student loans are obtained during the course of the marriage.

Several questions must be considered by the Court if the debt occurred during the marriage.  Who was the benefactor of the student loan and what impact did it have on the generation of income?  What were the proceeds of the student loan used for?  In some cases a portion of the loan may be used for (mutually beneficial) room and board expenses.

In plain terms, how did the community benefit and in what way did the community bear the costs to date?  California law clearly states “Reimbursement for community contributions and assignment of loans … is the exclusive remedy of the community or a party for the education or training or any resulting enhancement of the earning capacity of a party.” This and many other factors within California’s Family Code will guide the Judge when balancing student loans and the division of debts in a San Diego divorce.

Protect your own interests and contact us or call 760-389-3927 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.