Debt and Student Loan Debt in Colorado Dissolution of Marriage / Divorce
Dissolution of marriage/AKA divorce involves asset and debt division and student loan debt is a common type of debt that one or the other spouse may have. Debt comes in many forms; such as credit card debt, student loan debt, and mortgage debt. It is not unusual that at least part of the debt is acquired prior to marriage. Generally, debt obtained prior to the marriage is separate debt, and debt obtained during the marriage is marital debt. However, a Court can allocate debt obtained after separation to the spouse who incurred the debt, if the incurring party is the only one who will benefit from the debt. This scenario might apply to student loan debt.
Under Colorado law, marital property must be divided equitably, which does not necessarily mean equally. Courts have a great deal of discretion in asset and debt division. Debt is included under the concept of marital property and must be divided at dissolution as well. A common misconception is that debt in one spouse's name is separate property, however if it was acquired during the marriage, it is marital regardless of whose name is on the debt. Though a creditor can only hold the person whose name is on the debt liable for the debt.
A court might consider the purpose of the debt and who benefitted from the debt if there is a question about how it should be allocated. A court may look differently at loans from family members or friends, and debt of which one spouse was unaware. Debt may not be considered marital if one spouse incurred it for his or her unilateral benefit, such as for trips taken without the other party or expensive gifts to third parties. Student loan debt can be substantial and may equal that of a mortgage. Splitting the debt payment may not be viable if one spouse may not pay his or her share. It is often best to divide assets and debts, if possible, so that each party takes on responsibility for complete debts.
How can an attorney help? An attorney can assist you in property division by handling all paperwork, coordination, negotiation, mediation and/or court proceedings and in answering your questions about the process and the law.Janko Family Law Solutions - Turning Change Into Opportunity in Colorado Springs
Colorado Springs Divorce and family law matters are difficult to navigate alone. The court system is more complex than it should be. We can guide you through the Colorado Springs court experience by handling pleading and motion preparation and filing, negotiation, mediation, and court proceedings from start to finish. This allows you to focus on moving forward to a better future rather than on trying to figure out how the overly complex court system works. Remember that change often creates new opportunity and a better future. Janko Family Law Solutions, DBA Janko Family Law Solutions can help ensure that your best interests are protected. Contact us at 719-344-5523 or complete our online form to set up a free thirty-minute informational consultation.