Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.
Student debt is one of the most common forms of debt in America. Unlike other forms of debt however, the return on investment is less straightforwardly calculated. This makes it more difficult to divide in divorce. Added to the fact that people’s educations are undertaken as individuals, it can be difficult to determine who owns the debt and who benefits from the debt in divorce. It would be a mistake to assume that you are off the hook for one half of your student debt just because you live in a community property state like California, but likewise you can’t assume that your spouse’s student debt is entirely their own if you have benefited from the debt (say for example the income from the debt is used to cover living expenses as well as tuition and other college expenses). Also if one partner’s education has increased the standard of living for the couple, this calculation has to be made too.
The only way to be sure that your student debt will be divided fairly in divorce is to work with your divorcing partner. At Boileau Conflict Solutions, our mediation services provide an avenue for fairly working out the more complex financial AND emotional calculations in divorce. We analyze assets and debts using a framework that draws on game theory, amongst other approaches. Ultimately this is an extremely practical approach, as it is able to take into account far more than a financial analysis. It hones in on common interest, and the real sacrifices – of money, time and emotional energy – that contributes to the community interest.
Mediation can help you fairly negotiate any of the following situations involving student debt (and more!):
When you and your partner have both benefited from your student debt: If you’ve reaped the benefits of your partner’s student debt when they were able to leapfrog to a higher-paying career, mediation can help you make a fair determination of your obligations to your partner.
When your partner’s projected income may be higher because of their student debt: Your partner may have done a degree in a lucrative field or may be involved in an early stage business start-up where their degree may soon yield them a much higher income. Our divorce-mediator-accountants can help you calculate the value of a future career.
When you’ve helped your partner out financially with their student debt OR when you’ve helped your partner out in non-monetary ways (such as working longer hours to support them through college or providing textbooks or travel expenses): Using game theory and other mathematical and psychoanalytical approaches, mediation can make a fair determination of each of your contributions to your common resources.
When your partner isn’t able to keep up with student debt payments but may be able to in the future: Mediation can be a good venue for getting the best out of less than ideal situations in which there is an imbalance of resources and dependency. Mediation can help you both plan for an independent future by working together to honor your commitments to each other.
How We Can Help
No matter what your individual challenges, we strive to efficiently comprehend your situation and its opportunities for sustainable and agreeable resolution. We can either confidentially present you with a private analysis, or mediate the conflict with both of you until resolved. Any resolution you come to will be informed by a deeper analysis of the conflict that can be psychoanalytic and/or more financially-focused. Conflict analysis can result in a more optimized understanding of the net community property, which adds value to the overall estate, benefiting you both. The sooner you can resolve your conflict, the sooner you can begin to craft a sustainable future for you and your children. We often work with people who balance several commitments to work, education and family, or even divide their lives between different countries or locations. You can visit us at our offices in Boulder, CO, Campbell, CA, Irvine, CA and Beverly Hills, CA. We can also be reached by Telephone, Zoom or Facetime. We are available 7 days a week and at urgent notice. Please contact us to see how we can help.