By: Sarah T. McCain
In every Colorado divorce proceeding, the court will require each party to complete and file a Sworn Financial Statement. This requirement regarding financial disclosures in a divorce comes from C.R.C.P. Rule 16.2. Among the variety of items that you are required to list on that SFS is debt, including both marital and separate debt items. This includes, but is not limited to, credit cards, student loans, outstanding tax obligations, and medical obligations. On this document, it is important to list all of your debt so that the court is able to properly divide all of the marital debt that has been incurred during the marriage. One question that attorneys get in these cases is whether the debt is joint marital debt which should, thus, be divided. It is a common question and one that is derived from a common misconception that if the debt is not in your name, it is not marital. This is not the case in most situations.
There are some debts that do follow this standard for the most part. Specifically, student loans are generally something that go with the party who incurred the loan for the purpose of their education. The student is usually the one that is benefitting from the education and thus, the debt goes with them. Of course, nothing is so black and white. There are circumstances when a student loan can be divided as marital debt. When a student loan obligation is incurred during the marriage, the court does have the authority to divided the student loan obligation between the parties. In doing its analysis, the court may look at things like whether proceeds from the loan were used for marital expenses, such as mortgage or utilities. A court might also consider whether that loan ultimately benefits both parties financially in that the loan may have led to a degree, which led to a better job, which may impact the spousal support or alimony the other party pays or receives. Therefore, though the norm might be to have the person incurring the student loan be responsible for paying it, courts can divide student loan debt and may do so in certain circumstances. Continue reading