In Illinois, one or both spouses may have been making payments on their student loan debts throughout the course of the marriage. They might have even taken out new student loans while they were married. When the marriage ends in divorce, responsibility for student loan debts is a common question that divorce attorneys receive from their clients.
The general rule is that the spouse with their name on the loan is the one who is responsible to make the payment on it after the divorce. This holds true whether they took out the loan before or after the marriage. Things start to change when the other spouse co-signs on the loan. This is often a requirement of private student loans and it means that the cosigner is still responsible after the divorce when the other spouse defaults on the loan. The cosigner may want to try to negotiate a release from the other spouse in the divorce agreement. In some cases, the spouses will need to figure out how to repay the loan together after the divorce.
Spouses should be proactive now to take steps to lower their student loan obligations. This could mean consolidating loans at a lower rate to receive a lower payment. They may also qualify for an income-based repayment plan or even forbearance from the lender.
A divorce attorney may be helpful in clarifying what their client’s obligations are for their own and the other spouse’s debt. If their client may be forced to assume responsibility for someone else’s debt, they might help their client negotiate a more favorable division of assets. Many times, spouses agree to a divorce without understanding the range of possibilities regarding student loans and end up paying a price in the future when they are hit with an unwelcome surprise.