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Who Pays for Student Loan Debt in Arizona Divorce?

Couples aren’t usually thinking about their student loans when they walk down the aisle. However, while many people plan to have their loans paid off before a divorce would even be on the table, many Americans are still paying off student debt in their 60s. This raises the question of how student debt is dealt with in the case of a divorce. Going through a divorce is always challenging, and adding debt to the equation can elevate an already stressful situation. Dividing assets is complex and often, couples won’t be on the same page about how their property—debt included—should be allocated.

If you are going through a divorce in Arizona and are concerned about how student loans might come into play, you should consider securing legal counsel. A skilled debt settlement attorney may be able to examine your situation and develop a strategy for settling your debt. Here are some important things to know about divorce laws in Arizona and how they pertain to debt allocation.

Who Is Left with Student Loan Debt in a Divorce?

When it comes to dividing any asset in a divorce, state laws play a significant factor. While certain extreme circumstances can affect the way debt is divided, most states have divorce laws that are straightforward and apply to most situations. States have different rules when it comes to divvying up shared property, debts, and other assets. However, in general, most divorce laws fall under two categories: equitable and community property states.

In a divorce, community property states assert that couples have equal ownership of all assets. This applies to all assets and debts that were acquired during the course of the marriage along with any that were brought into the marriage. The only time when this standard does not apply is if a couple signed a prenuptial agreement.

Alternatively in equitable property states, the division of assets won’t necessarily be right down the line. This applies to debts, too. In a state that has equitable divorce laws, spouses can argue that they should own less debt than their partner.  Individuals will need to provide proof and evidence for their argument. However, it’s possible for couples in equitable property states to walk away from a divorce with unequal assets and debts.

Today, most states are equitable property states, as it is largely considered the fairest way to handle the financial aspects of a divorce. Since individuals come into a marriage with different circumstances, an equitable approach to divorce protects them from acquiring the financial situation of their partner. However, although equitable property laws are more common, Arizona is a community property state.

Who Pays for Student Loan Debt in an Arizona Divorce?

Since Arizona is a community property state, it means assets and debts are divided equally. Therefore, any loans that were acquired during a marriage will be divided evenly. Things can become more complex with loans incurred before the marriage. There’s no one rule that applies to all divorce cases and the judge will look at the factors surrounding the divorce to make a decision about how assets and debt brought into the marriage will be divided. Factors like whether a marital agreement was in place, income, the timing of the divorce, and whether or not the couple has assets of significant value will all play a role in determining how debts brought into the marriage are allocated. Additionally, if a spouse co-signed the loan agreement, it’s likely they will be left with some of the debt.

If you are an Arizona Resident and are wondering how your student loans could impact your divorce, it’s best to meet with a lawyer. A lawyer can look at your situation and determine the best strategy for dealing with your loans.

Paying off Debt before Getting Divorced Is the Best-Case Scenario

In an ideal world, you and your partner can address your debt before getting divorced. If it’s possible for you to pay off your remaining student loan debt before getting a divorce, it can make the process much simpler. However, if this isn’t an option for you, you should consider working with a seasoned attorney who can determine the best way to manage your student loans.

Contact a Skilled Arizona Student Lawyer Today

Getting a divorce can be extremely overwhelming—both financially and emotionally. Allocating your finances between you and your ex-spouse is likely to be a draining process, and it’s best to have a lawyer on your side. If you are concerned about how your student loans will affect your divorce, you should consider consulting a skilled debt settlement lawyer.

At McCarthy Law, our attorneys are dedicated to helping individuals navigate the complexities of the student loan system. Under our student loan debt settlement program, our licensed attorneys negotiate with lenders to reduce the interest rate and principal balance of student loans. At the end of a successful settlement,  our clients pay only a fraction of their original loan balance. To schedule a consultation with one of our skilled student loan settlement attorneys, call (855) 976-5777 or fill out our online contact form.

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Kevin Fallon McCarthy

Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.