HECS & HELP debt in Family Law matters
If you are separating from your partner, you might be wondering “am I responsible for my spouse’s debt?”. This blog post discusses how HECS/HELP debts belonging to you or your partner will be considered.
Will my HECS/HELP Debts be included in Family Law Property Settlement?
The Family Court has decided numerous cases involving the issue of HECS/HELP debts:
- Thomm & Painter [2015]: The court excluded the wife’s HECS debt from the settlement because it did not contribute to her earning capacity during the marriage. She only started working in her field after the separation.
- Zimin & Nickson [2014]: The court decided that the wife should be personally responsible for her HECS debt because she completed her studies post separation. Since the qualification would not benefit both parties, the debt stayed with her.
- Berry & Berry [2010]: The court ruled the wife’s HECS debt was a joint liability because:
- Both parties agreed the wife would pursue tertiary education.
- The wife commenced work in her field right after graduation.
- The wife became the primary income earner for the family after graduation.
- Lane & Owen [2010]: The court found the wife’s HECS debt to be a joint liability because in parity the husband’s HECS debt was fully repaid using joint funds during the marriage.
- Partington & Cade [2008]: Both parties had similar HECS debts, but no repayments were made from joint funds. Since neither party was employed in their professional fields, the court ruled that they each remained responsible for their own debt.
2. Key factors from these cases:
These cases demonstrate that HECS/HELP debts are either decided to be a shared or personal debt depending on:
- Did both parties agree that the studies leading to the debt were a shared decision, or was it more of a personal choice by one partner?
- Were the studies completed during the relationship?
- If one partner finished their studies after separation, they might be the only one benefiting from the qualification—and therefore, the debt could stay with them.
- Did both parties benefit from the qualification? For instance, did one partner use the qualification to earn income that supported the family during the relationship?
- Repayments made during the relationship: Did either party contribute toward repaying the debt, either from their income or from joint funds?
- Did both parties have a HECS/HELP debt? If so, if one party’s debt was repaid using joint funds, the court may treat the other person’s debt in an equivalent way.
Questions about your HECS/HELP debt?
If you have an HECS or a HELP debt and want to know how this will be considered and treated in your financial settlement, one of our family lawyers would be more than happy to have a free 20-minute phone consultation with you. Feel free to head to our contact us page and complete the book a free phone consultation form.
