There is nothing simple about divorce, and divvying up student loans can be complex.
Quite a few factors can affect how laws deal with student loans during a divorce. That said, there are a few things people can do to help understand who will be responsible for what.
Know the state laws
Unless a couple signed a prenuptial agreement, anyone going through a divorce in Wisconsin must divide their assets according to the state’s laws. Wisconsin is a community property state, meaning that spouses have equal ownership of their marital property, which they must divide in half.
Acknowledge debt from before the marriage
If both spouses have equal student debt, it is generally easy for the couple to manage Wisconsin’s split policy. However, if one person owes more, spouses can argue over who is responsible for what portion of the debt.
Wisconsin law typically considers student debts acquired before marriage as separate property, not marital property, and thus the responsibility of the individual that accumulated them.
List debt acquired after marriage
Loans obtained after marriage can be trickier. Sometimes, the spouse that received the loan still makes less than their partner and relies on their joint incomes to make payments. Under Wisconsin law, there is no definite way to divide these loans, and each situation will have a unique outcome.
After couples divide their student debt according to the laws, each person becomes responsible for their own portion, meaning they are going to need to make the appropriate payments. However, knowing these laws can help divorcing people plan for their post-marital debt loads. That allows them to prepare financially for their new circumstances.