I Co-Signed For My Spouse's Student Loans And Now We Are Thinking About Divorce. Under Florida Law, Do I Have To Pay Their Loans?
Some types of student loans require a co-signer. The co-signer is frequently the student’s parent, spouse, or another member of the family. When a person co-signs on a loan, the individual is telling the bank that he or she agrees to assume liability to make payments on the loan if the borrower fails to do so. Having a co-signer who has good credit can often give a borrower more options.
Unfortunately, if you are a co-signer on your spouse’s student loans and you are now contemplating divorce, the lender will not automatically remove you because you are now getting divorced. The lender still wants a guarantee of payment on the loan and is unlikely to release you.
The best option is often for your spouse to refinance the loans in his or her name. Your spouse’s credit score may have improved a lot since the time the loan was originally acquired, and he or she may be able to secure the loan without a co-signer. If that is not an option, the divorce settlement should make it clear that it is your spouse’s obligation to pay the student loan. If your spouse fails to do so, this can harm your credit score after your divorce. You should consider signing up for a credit monitoring service which will inform you when your credit score changes. Then, if your spouse is not making payments, you can evaluate your options. You may choose to make the payments yourself and then seek reimbursement, depending on the circumstances.