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How does New York law treat student loans in divorce?

Heavy student loan debt is a burden for people throughout the United States, but debt-related matters can become especially complicated in the midst of divorce. Like the majority of states, New York is an equitable distribution state, which means that marital assets and debts will be divided equitably between the spouses.

Equitable distribution does not necessarily mean a split down the middle, however, and New Yorkers with student loan debt will want to be aware of how that debt may or may not be divided in the event of divorce.

New York is also one of the few states that regard professional degrees as marital property. That means the earning power resulting from a degree can be taken into account when dividing assets and student loan debts. In other words, if you earned a degree and your soon-to-be ex-spouse benefitted from the degree, then it may be more likely that the loans that led to the degree will be regarded as marital debt.

However, if you and your spouse divorced shortly after you graduated, then a court may view your student loan debt as separate debt.

In dividing marital debts and assets, the basic question often centers on who benefited from what. Determining the answer to that question can require careful negotiations, and individuals going through a divorce will want to have a legal advocate to help assess the facts of the marriage and the financial future of the parties involved. For example, what are the tax implications of taking on a particular asset or debt?

Many factors go into the division of assets and debts in a New York divorce. More information on property division is available on our equitable distribution page.

Source: Forbes, "Are Student Loans Incurred During The Marriage Considered Marital Debt?" Jeff Landers, Dec. 17, 2013

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