Polacheck v. Polacheck

Court of Appeals of Ohio, Ninth Appellate District, Summit County · 2013 · Family Law

Family LawDivorceMarital DebtStudent-Loan DebtProperty Divisionmarital debtstudent loansequitable division

Facts

During the marriage, Wife attended nursing school and incurred about $40,000 in student-loan debt. The parties agreed that the loans were marital debt, but disputed whether they should be allocated equally or solely to Wife, and also disputed whether some loan proceeds had been used for family expenses. The trial court rejected Wife's testimony that some proceeds were used for vacations and family expenses and assigned the entire student-loan debt to Wife without an offset. At the time of divorce, Wife had begun working as a nurse earning about $58,000 annually, while Husband earned a six-figure salary plus bonuses.

Issue

When dividing marital student-loan debt in a divorce, may a trial court allocate the debt solely to the spouse who earned the degree based primarily on the view that only that spouse benefits from the degree? Or must the court consider the parties' relative economic circumstances and other relevant equitable factors in making the allocation?

Rule

Marital student-loan debt must be allocated equitably based on all relevant circumstances. In doing so, the trial court must consider the parties' relative economic circumstances and ability to repay the debt, along with any other factor the court expressly finds relevant and equitable; it may not rely solely on the premise that the degree-earning spouse is the sole beneficiary of the education, and nonfinancial marital fault generally is not a proper consideration absent financial misconduct or covert financial activity.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a divorce in Columbus, Olivia Mercer and Daniel Mercer stipulate that $52,000 in student loans taken out during the marriage for Olivia's dental-hygiene program are marital debt. The judge assigns the entire debt to Olivia, explaining only that she alone will use the license after divorce and therefore she alone should repay the loans.

If Olivia appeals, what is the strongest argument that the allocation should be reversed?

Explanation. The majority held that marital student-loan debt must be allocated equitably based on all relevant circumstances. A court may not place dispositive weight on the idea that only the educated spouse benefits from the degree. It must consider relative economic circumstances and repayment ability, along with any other expressly relevant and equitable factors. (Derived from Polacheck v. Polacheck (n.d.).)