Is a student loan considered community property?
In most community property states, a student loan taken out by either party during marriage is community property, meaning that both spouses are equally responsible to repay the debt. Though California is a community property state, it does have one exception to the general rule.
Is a student loan relationship property?
Under the Property (Relationships) Act 1976, debts are classified as either relationship debts or personal debts. … Student loans are usually classified as personal debts, but there are circumstances where they can be held to be relationship debts.
Does a spouse inherit student loan debt?
Is a Spouse Responsible for Student Loans Incurred After Marriage? Whether you’re responsible for student loans your spouse took out after you got married is dependent on where you live. In most states, debt taken out during the marriage is the responsibility only of the person who is on the loan agreement.
Do student loans disappear after 7 years?
Student loans don’t go away after 7 years. There is no program for loan forgiveness or loan cancellation after 7 years. However, if it’s been more than 7.5 years since you made a payment on your student loan debt and you default, the debt and the missed payments can be removed from your credit report.
Who pays for student loans in a divorce?
Legally though, any student debt that you incurred prior to getting married is considered separate property. Therefore, after a divorce, it should remain separate property. If you borrowed money from the bank prior to getting married, that debt will become completely yours after the divorce.
Who is responsible for student loan debt?
Most student loan lenders are huge institutions, such as international banks or the government. Outside the government, most student loans are held by the lender, a quasi-governmental agency like Sallie Mae, or a third-party loan servicing company. The federal government fully guarantees almost all student loans.
Are student loans marital debt in Michigan?
Michigan is an Equitable Distribution State
Debts are often divided using the same formula as the assets. … Debt follows the same principals, if it was taken out during the marriage, it can be considered marital and subject to equitable division between the divorcing couple.
What happens if you never pay your student loans?
Failing to pay your student loan within 90 days classifies the debt as delinquent, which means your credit rating will take a hit. After 270 days, the student loan is in default and may then be transferred to a collection agency to recover.
Do student loans expire after 20 years?
Generally, you will make on-time payments for 20 or 25 years, depending on the repayment plan. The remaining loan balance is forgiven after that period of time.
Can they garnish my husbands wages for my student loans?
The answer is yes. Your student loan creditors can garnish your spouse’s wages to recover the amount of your defaulted student loan. You don’t mention whether the loan was incurred before or after marriage.