Saying “I do” does not mean you are legally bound to your spouse’s student loans. Each of you remains responsible for your own student loans you took out before the marriage. However, tying the knot can affect your payments, student loan-related tax breaks and your ability to pursue other financial goals. Here are some other ways marriage can have an affect on your student loans.
- Your monthly payment could increase. Federal loan borrowers can enroll in one of four income-based repayment plans to lower their monthly payments. However, the Revised Pay As You Earn Plan, determines married borrowers’ payments based on their combined adjusted gross income and student loan debt. This typically means a higher monthly payment.
- You risk losing the student loan interest deduction. The student loan interest deduction tax break allows you to deduct up to $2,500. But if you and your spouse earn more than $160,000, you will lose out on that deduction- even if you file separately.
- Your spouse’s payments could affect your finances. In the event you co-sign your spouse’s private student loan, you are legally responsible for repaying it if he or she cannot. The loan will also appear on both of your credit reports. And if your spouse takes out a student loan during your marriage, then defaults creditors in some states can go after both of your wages and assets- even your tax refund.
- Your spouse may help pay off your student loan. If you and your spouse decide to help each other pay off your student loan debt, consider coming up with a written agreement. This could help avoid future arguments, especially in the case of divorce if one spouse depends on the other financially.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
