College debt can be source of conflict during divorce mediation
Posted in Divorce Mediation on August 8, 2018
One of the biggest causes of stress in marriage is money, especially debt. For this reason, it may not come as a surprise that college debt can take a toll on marriages in California. In fact, it can even become a major sticking point during divorce mediation if two spouses decide to break up yet try to resolve their divorce issues outside of court.
Research shows that over 33 percent of borrowers cite college loans, along with other financial woes, as the reason for their divorce. The total college debt amount in the United States now rests at $1.5 trillion, a historical high. In addition, the average balance that college graduates carry is a little more than $34,000 — a 62 percent increase from 10 years ago.
At the same time, the number of borrowers owing $50,000 or more has tripled during the past decade. The problem with student loans is that they can hold college graduates back financially. A young couple may have a hard time affording a house and even children with a large amount of student debt hovering over them.
One way in which people can protect themselves from a spouse’s student loan debt is to create prenuptial agreements. These types of agreements may specify that if a person helps to pay off his or her spouse’s student loan debt, he or she would receive this money back in the event of a divorce down the road. Even if no prenuptial agreement is in place at the time of a couple’s divorce, the two parties can simply negotiate the splitting of their debts during divorce mediation, thus avoiding further court intrusion. An attorney in California can provide a spouse with the guidance needed to protect his or her best interests financially during a divorce proceeding involving large amounts of student loan debt.