Can Student Loan Debt be Categorized as a Marital Debt?

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In Massachusetts, a judge has broad discretion with respect to the equitable division of the marital estate and may consider both economic and noneconomic contributions to the marital estate. A prenuptial agreement can clarify the responsibility for debts incurred during the marriage, as well as how payments made toward individual, pre-marital debts during a marriage, including student loans, are to be treated in the event of a divorce. Generally speaking, debt incurred during the marriage, including student loan debt, will be presumptively marital. The party challenging that presumption will typically have to present evidence that the debt at issue was intended to be an individual debt. The analysis is entirely dependent on the circumstances of the case and the determining factor will not rest on whether the challenging party’s signature is on the underlying promissory note securing the original debt. In a vacuum, student loan debt incurred by one party prior to the marriage will typically be categorized as individual debt, especially in marriages of a shorter duration. However, the issue becomes more complicated where one spouse significantly pays down the other’s pre-marital student loan debt. While the Court may certainly look to the intent of the parties at the time of the incurrence of the debt – in highly contested matters – evidence to that effect may be limited to the now at-odds testimony of the parties.

What could have been a relatively streamlined divorce can quickly become contested (and costly) in the event that one party is now looking for an offset against marital property for payments made toward the other’s student loan debt that the other spouse maintains was a gift (or otherwise). In these circumstances, a prenuptial agreement that sets the parties’ expectations on how student loans and debt are to be accounted for in the event of a divorce may be the most efficient vehicle to avoid costly litigation. This is especially true in those circumstances where one spouse has helped pay toward the other spouse’s student loan debt during a relatively short-term marriage. As a matter of ‘fairness’ a spouse making such economic contributions to the other party’s student loan debt will likely attempt to seek a disproportionate share of the marital estate to make himself/herself financially whole. Fortunately, this is not something that has to be left for the Court to decide following a costly undertaking to provide the Court with the necessary factual findings as to the parties’ intent, actions and contributions to the marital estate. 


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