How is student loan debt divided in a Utah divorce case? This question was answered recently by the Utah Court of Appeals in a case called Burggraaf v. Burggraaf, 2019 UT App 195. Generally, any debt incurred during a marriage is considered marital debt, which should be divided equally by the parties. However, there is generally thought to be an exception to this rule where student loans are at issue, and the Court of Appeals upheld this exception under the “unique circumstances” of the Burggraaf case.
In Burggraaf, the trial court assigned $260,000 of medical school debt solely to the student spouse, Joseph, based on the facts that: (1) Joseph had abandoned his plans to be a licensed medical doctor (apparently related to the fact that Joseph could not pass the medical board exams to become a licensed doctor); (2) that Joseph individually, and not the family, benefitted from almost all of the student loans (this decision was made based on the credibility of the witnesses and Joseph’s lack of supporting evidence to the contrary); and (3) Joseph is the only person that may ever receive any benefit of his medical degree if he ever chooses to utilize it. Based on these three findings, the trial court found it would be unjust to require the wife to share in the responsibility of the student loans, and this decision was upheld by the Utah Court of Appeals.
Although the court stated that the Burggraaf circumstances were unique, it is a very common practice in Utah that, upon divorce, student loans are assigned to the spouse who incurred the debt, and not treated as a common marital debt to be divided equitably by the spouses for common marital expenses and debts such as consumer debt. However, there can be cases where it is more appropriate to divide student loan debt, especially where it can be shown that the family as a whole benefited from the loan funds, such as where the family used the funds for living expenses, as opposed to using the funds for tuition and books.
If you have a question about how to divide a marital debt or student debt, and would like to speak to an attorney about how our firm can help you with this issue, please call Fontenot Law at 801.312.9330. We provide free consultations with an experienced divorce attorney in Bountiful, Utah.