So, in other words, if you acquired your student loans prior to marriage, then they will be separate debt

So, in other words, if you acquired your student loans prior to marriage, then they will be separate debt

Per ARS 25-211 and 25-213, property (and debts) incurred prior to marriage is the separate property or debt of the spouse who acquired it, and conversely, property and debts acquired during the marriage are (presumptively) community property and debts.

Based on the statutory framework, the timing of when your student loans were incurred in relation to your date of marriage will determine whether they are community or not. If they were acquired during the marriage, then they will be community debt.

It does seem that a big factor for the courts to consider is whether the student loans were used for living expenses (a community expense), actual schooling or education, or other personal expenses

It is certainly possibly that some of your student loans will be separate debt and others will be community. This could be the case if you got married while in school, or perhaps returned to school after you got married.

Of note, your student loans are incurred when you sign the contract and when the funds are disbursed, not when you start repayment.

The case law in Arizona (pretty much all memorandum decisions) all indicate that student loans are community property if acquired during the marriage. In fact, in one case, the Court of Appeals reversed the trial court for finding that student loans were the separate debt of one spouse even though they were acquired during the marriage.

Despite the likelihood that the court would similarly find that your student loans acquired during marriage to be community, the legal inquiry and strategy doesn’t (or at least shouldn’t) end there.

There have been two known cases where even though the student loans were acquired during marriage, the divorce court allocated the student loans to the spouse that took them out, or allocated each spouse his/her own student loans (even though the amounts were drastically different).

Per ARS 25-318, the court is required to divide community property and debts equitably. For the most part, this means equally. However, there has been a line of cases (Toth, Flowers, Inboden), wherein the court has also recognized the equitable power to divide community property and debts unequally under rare and extraordinary circumstances.

Based on this equal is not equitable reasoning, the Court of Appeals have upheld some cases where the divorce court allocated all of the student loans to one spouse, or allocated to each spouse his/her own student loans.

In Fuller v. Pulsifer, the Court of Appeals upheld the trial court’s decision to allocate all of the husband’s student loans to the husband. The trial court found that the student loans were community debt because they were incurred during the marriage. However, the trial court recognized that the wife would need to incur her own student loans to become self-sufficient and no longer need spousal maintenance, as well as the fact that the husband would continue to benefit from his comparatively high earning capacity which was made possible by the student loans. So, even though the student loans were community property, the trial court found it equitable to unequally divide them by allocating 100% to the husband.

In Meadows v. Jeffers, the Court of Appeals upheld the trial court’s decision to allocate each spouse his/her own student loan debt. Despite the significant disparity in these amounts, and the fact that the student loans were community debts, the trial http://rapidloan.net/installment-loans-il/ court awarded the debt to the party who incurred it so that the party who would benefit from that debt (from the education achieved) would take that specific debt. In this case, the husband had a Master’s degree and earned approximately $8,000 per month, whereas the wife had a cosmetology license and earned approximately $2,000 per month.

Based on statute and multiple memorandum decisions (which are not technically binding on future cases), it seems well established in Arizona that student loans acquired during the marriage are community property. However, there is (non-binding) precedent that the courts can unequally divide student loan debt depending on the circumstances.

In the two cases addressed above, the recurring them seems to be that in a situation where one spouse has a significant earning power over the other spouse, the court may be more inclined to unequally divide community student loan debt. Of course, that is not a guarantee and it is not the law. It is simply an observation from existing cases and potentially a consideration and/or legal strategy in future cases.

These, among other things, are factors that the court will likely weigh along with earning capacity when deciding whether equally dividing community student loans is equitable or not.

The husband in that case had about $74,000 in student loans and the wife had about $15,000

So, are student loans community property (debt)? Yes, but that doesn’t mean you should simply conclude that the student will or should be divided equally. If circumstances in your case suggest that an equal division would be in equitable, it might be worthwhile to pursue that legal position.

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