Student loans in relationship property.
In many relationship breakdowns the parties have student loan debts to consider. In some cases, these debts are considerable, especially where one of the parties has undergone a specialist area of study such as medicine.
When approaching relationship property divisions, it must be determined whether the liability is a relationship debt or, is it a personal debt. If the debt is personal, it will not be included in the division of property and the party who owns the liability, will retain that debt to the others exclusion.
Many people are surprised to hear that generally, student loans are personal debts and not equally shared.
There are two (2) exceptions to this position however;
Where there is an element of that debt was made up of “living costs” which went towards the benefit of the family unit; or
Where the debt was incurred as part of a common enterprise for the benefit of the family.
Whether these exceptions apply will depend on the specific facts of your case but it is important to seek advice from a specialist family lawyer before entering into settlement negotiations with your former spouse.
Walker Murdoch Law regularly acts in family law matters of this nature and would be happy to speak to you on a no obligation basis about your case if you are seeking assistance with a family law matter.
Pip Walker
Director
Walker Murdoch Law
pip@wmlaw.co.nz