Some humorous saying is that a loan connects people more than marriage. Indeed, we can solve a civil contract sooner or later, and we are often bound by credit for many years. Fortunately, we can also unsubscribe from such a commitment. When the marriage is dissolved, the property community stops at the same time. The goods owned by the spouses are subject to an equal division. Unfortunately, this rule does not apply to debts. Even after a formally confirmed separation, the spouses are jointly and severally liable, for example, for a mortgage contracted during the marriage. And what does this solidarity mean in practice?
Divorce, but not with the bank
In the eyes of the bank, our new civil situation does not change anything. The obligation to pay the loan continues to be imposed on both persons who were once forming a marriage and the bank has the right to demand repayment from each of them . On the side of indebted people, however, remains the question of how to share this responsibility. For the bank it really does not matter which party repays the loan installment. It is only important that the money is credited to your account within a certain period. If this does not happen, the bank has the right to claim repayment either from both former spouses or only from the chosen one – each of them is responsible for repayment in equal measure. So if, for example, the parties have agreed that only one of them will repay the loan, the bank will not interfere. If, however, despite the declaration, the selected party will avoid repayment, the bank may also demand repayment to the other debtor . What is important, the bank may take a certain part of the personal assets of the chosen spouse, for example a part of his remuneration, towards the debt.
How to pay off the loan after the divorce?
To avoid the hassles and unnecessary financial clashes with your former spouse, it is worth discussing the loan issues right after the decision to break up. In this situation we have several ways to choose:
- sale of real estate,
- rental of real estate,
- taking over the property only by one of the parties,
- joint repayment of obligations
Let’s take a closer look at each of the available solutions.
Sale of real estate
One of the best ways to get rid of a common debt. Deciding on this step, however, it is worth checking whether the early repayment of the loan is profitable for us (the bank may pay an additional commission for early repayment). Besides, let’s make sure that the sale price is enough to cover the entire liability. If not, we will have to pay the remaining part together.
Rental of real estate
If the sale is temporarily out of the question, the property can also be rented. In this way, we will get funds to repay the monthly loan installment and we will not have to spend money out of our own pocket for this purpose . The tenant should also be well verified, because as a result of the dispute, the right is more often on his side.
Taking over the property only by one of the parties
A loan-laden property may be retained by one of the parties. By the same token, she takes on the shoulders the repayment of the whole commitment, at the same time freeing her former partner from this obligation. However, such arrangements require confirmation in the form of an appropriate legal act. The division of assets after a divorce can be made on the basis of a civil law contract, and in extreme cases by virtue of a court judgment. In a civil law agreement or a judicial decision, it is in turn possible to indicate which of the spouses is obliged to pay the loan installments . Thus, the other party is theoretically exempt from paying the loan. Theoretically, because the fact of making such arrangements does not change the bank’s position. For the bank, the spouses are still jointly and severally liable for the loan. Fortunately, having such a contract allows the borrower to repay the borrower more effectively to recover his money. If the situation arises, where the bank will ask for repayment to the debtor, who has not been obliged to do so in the contract, because the obligation may expire, he may require his former partner to reimburse the costs incurred on the basis of a regressive claim . In extreme cases, this return can be recovered by appealing to the court. However, in order to avoid the aforementioned problems, taking over the obligation by one of the parties may be made on the basis of an agreement with the bank and the selected borrower. In this case, the other party only has to agree to this type of action. However, for the bank to agree to such a solution, the person taking over the liability must have adequate creditworthiness.
Joint repayment of liabilities
The loan contracted during the marriage can also be repaid in the same way as before. However, former partners have to agree whether they make up a monthly installment or, for example, pay installments for a change.
Good will is the basis of success
Problems with loan repayment after divorce usually result from difficulties in agreement between former spouses. The faster we reach a compromise, the easier it will be to get rid of the commitment or find a solution to the problem that satisfies both sides. Of course, the good will of the bank also plays an important role in this topic. However, if the former spouses get along with each other, the joint loan will no longer be as binding as it might seem. Divorce and credit. What’s next with repayment? 4.6 (92.31%) 13 votes