Applying to college is a huge chapter in your life that you have likely been looking forward to for most of your young adult life. While this is an exciting time in life, it is also expensive and often too expensive for many families to send their children off to get a higher education.
While student loans may seem like an easy fix to this issue, they are more of a band-aid than an actual solution. With 1 in 8 people currently facing student loan debt, this financial solution can quickly become a burden when graduation approaches and it’s time to pay up. The experienced debt settlement lawyers at McCarthy Law PLC know that while taking out a student loan may seem easy and harmless, if you cannot pay back what you owe, you may put your spouse in financial trouble by defaulting.
Legal Responsibility of a Spouse with Your Student Loan Debt
Before you and your spouse say “I do,” it is essential that the two of you discuss each other’s financial situations and what each of you will be bringing to the table, both good and bad. You may be surprised that your future spouse’s status with their student loans can have a pretty significant effect on your financial situation. However, the good news is that in most cases, the legal responsibility to pay back your spouse’s student loans does not transfer to you.
While there is not typically a legal responsibility for a spouse to pay back a federal student loan, always be sure to double-check the policies of any private student loans that may exist; their rules may differ. You should also keep in mind that as a married couple, if one spouse defaults on their loans, it can affect other things like credit. That can make it difficult when trying to buy a car or home together.
Depending on how you choose to file your taxes, being married can affect the repayment strategy you use for your student loans. This is especially true if your repayment plan is on an income basis. If you file your taxes jointly, both of your incomes will be combined, which can result in a higher monthly payment required for a student loan.
Available Tax Breaks
As a married person, the tax break you receive for paying a student loan can change. You can take a tax deduction for any interest paid on federal or private student loans, capped at $2,500 a year. This in turn will lower your taxable income.
Debt Settlement Lawyers Can Help You Reach Financial Goals
If you and your spouse are facing financial hardship and are struggling to avoid defaulting on any student loans between the two of you, you may be able to settle that debt with the help of experienced lawyers like those at McCarthy Law.
With extensive experience helping clients with debt settlement and consolidation, you can have peace of mind knowing they will provide you with the personalized care needed to build your case. For a free personalized debt analysis, contact us here or call (855) 976-5777.