How Does Divorce Impact Student Loans in Texas?

Divorce can be incredibly difficult, but with 50 percent of marriages ending in divorce, they’re not uncommon.

It’s also true that student loans in Texas are common. The average Texan has over $26,000 in student loan debt.

If you’re going through a divorce, you’re in a lot of pain. The decision to divorce is a difficult one, but it is usually the right decision. That being said, it can also be difficult to take on extra debt, particularly in this time of emotional and financial needs.

If you don’t understand the impact of divorce on student loans in Texas, this can happen to you. This information will help you make an informed decision about what a divorce will do to your debt level, and what that means for you.

How Student Loans Work

It can be easy to think of student loans as only a personal commitment. But on top of being a commitment, student loans in Texas are also a form of debt.

Just as divorce can have a huge impact on this type of debt, marriage can influence you and your spouse’s student loan situation.

The first of these changes is the fact that both spouses bring student loan debt to the table. If you have $15,000 in debt, and your spouse has $20,000, you now have a cumulative $35,000 in student loan debt.

On top of that, your plan for paying back your student loan debt changes after getting married. This is because, even if you both have separate loans to pay back, taxes filed jointly result in the income of you and your spouse being listed on your return.

That means that you may not qualify for certain debt relief programs, such as the Pay As You Earn program.

How Is Debt Divided During a Texas Divorce

When Texas couples divorce, debt is pooled between the two partners. This applies to student loans along with the various types of debt that you and your partner may have to deal with.

In most cases, student loans can result in higher levels of debt for a person going through a divorce. This can damage your current financial state, and even harm your credit score.

At the same time, it is also possible that your debt will decrease during a Texas divorce. All of this depends upon you and your spouse’s current level of debt.

For instance, if you have $25,000 in student loan debt, and your spouse has $15,000 in student loan debt, you will end up owing $40,000 as a unit and $20,000 each after the divorce.

How Division Can Go Both Ways

However, if you have no student loan debt at all and your spouse has $15,000 in student loan debt, you will each end up owing $7,500 in student loan debt following the divorce.

All of this is to say that the division of debt in a divorce is equal and that this can be a good thing or a bad thing for you depending on how your own debt factors into the matter.

It’s also worth noting that, while student loan debt can increase during a divorce, it is possible to reduce your overall levels of debt while increasing your student loan debt.

This is because the equal division of debt during a divorce applies to all types of debt and not just student loans in Texas. Therefore, if you have a divorce in which you gain student loan debt but pass off more of other types of debt, you will actually see a decrease in your total level of debt.

This means that people need to examine not just their debt as it relates to student loans, but the increase or decrease of their debt as a whole. On top of this, changes to your financial situation can actually make an increase in student loan debt a good thing.

We will explore this more in the following section, but this is basically true because of the way your tax structure can change following a divorce.

The Impact of Divorce on Student Loans in Texas

We already mentioned how getting married can change your way to get help paying back student loans in Texas. And while that is true, it is also true that getting divorced can change your way to do this.

For instance, consider the debt repayment options that may have been lost due to filing income taxes jointly. The good news is that these options for repaying student loans in Texas may return after a divorce.

That being said, it still may not be worth the fact that you will be taking on more debt. And this can be further complicated by the fact that, in some cases, more debt can be given to the partner who obtained the student loans.

While this takes a detail-oriented lawyer, it usually happens when the partner with the higher level of student loan debt obtained these loans before the marriage.

When loans were obtained during the marriage, it is more likely that debt will be divided 50/50. This needs to be handled on a case-by-case basis, and you shouldn’t feel that more or less debt is guaranteed until after you’ve spoken to a lawyer.

Speak to a Divorce Lawyer about Your Debt

Divorce is hard. If you want help managing the potential increases in debt and decreases in income that can come with it, we can make the process easy and helpful for your needs.

We specialize in multiple types of family law, including divorce and child custody. We believe in making sure you get the fair treatment you deserve from the process.

We want this to be as painless as possible for you. If you want to get in touch with us to make that happen, you can contact us today.