How to split a loan in a divorce

Unpleasant emotions during a divorce will add and the need to split the loan. The vast majority of families have at least one loan taken to buy an apartment, car or household appliances. When a marriage is divorced in a judicial proceeding, not only an apartment, a car, household appliances are divided, but also debts in banks.

We divide property for two

The question of the division of property and obligations can be resolved peacefully without legal proceedings. It is enough for the parties to the divorce process to agree correctly who and how much will repay the loans. If the conversation does not work, when divorcing you need to remember the following provisions of the Family Code on the division of property:

• The common property is all that is acquired by each of the spouses during the period of marriage.
• Shares in common property are equal, unless otherwise provided by the marriage contract.
• According to a court decision, the share of one of the spouses may decrease if it is allowed to spend common property exclusively for personal purposes and to the detriment of the interests of the family, or one of the spouses did not work without a good reason. The spouse, with whom minor children are left, the court may increase the share in the total family property.

Credit may stay with you

The Family Code contains such provisions for repayment of married loans.

1. Total debt obligations are distributed in accordance with the shared distribution of property.
2. Collecting general debts can be applied to the common property of the spouses, or to the property of the spouse who received the loan.

By default, if a married person receives a loan, then the funds go to general family purposes and you need to return the debt together. It doesn’t matter who signed the loan agreement and for whom the loan is issued - the spouses bear the same obligation to repay the money to the bank.

In a situation where a loan is issued to one of the family members, and the funds received are spent on family needs, the spouses are jointly and severally liable for the loan. If the loan is taken for personal needs, in court you can prove it and relieve the second spouse of obligations under it. There are also options for the development of events when a divorce reveals a debt to a bank about which one of the spouses does not know anything. Typically, banks request the written consent of a person married to a borrower to apply for a loan, or insert a clause in the loan agreement that the second spouse is informed about the receipt of borrowed funds.

Often when making loans for a large amount, the creditor bank insists on attracting a second spouse as a guarantor or co-borrower. As a rule, a mortgage loan is issued for both spouses, and it will be necessary to repay it together.

If the court has decided on joint and several liability for the loan, it is necessary to conclude an agreement on the timely payment of its part of the mandatory monthly payment. Otherwise, one of the spouses will have to independently repay the monthly payments and only after the actual payment to claim compensation from the second in the appropriate amount. You can apply to the court at any frequency - monthly, once a quarter or a year.

Is the bank ready to share a loan between former spouses

Difficulties arise when reaching agreements between ex-husband and wife, but it is even more difficult to resolve the issue of repaying a loan with a bank. If one of the spouses needs to take on loan obligations by court order or by amicable agreement, the problem may be that when granting a loan, the total income was taken into account and the earnings of one family member are not enough to service the loan.

Not every bank will go to debt restructuring. With a greater likelihood, he will insist on the sale of property purchased with loan funds and early repayment of the loan. If, for example, a loan was taken on the security of real estate, the bank will most likely take the apartment or house. If the issue is not settled in a timely manner.

The loan section in no way depends on the solvency of each of the former spouses, therefore, it is necessary to try to settle the issue of revising the repayment schedule with the bank individually.

Another problem arises: if one of the spouses is a surety, and the second is a borrower, then the borrower can self-avoid solving general financial issues and the obligation to pay off the debt in full will be borne by the surety. In this case, only after repayment of the loan, the guarantor will be able to go to court to compensate the borrower for his own expenses.

Watch the video: Divorce: Dividing Community Property in a Divorce- Griffith Law (December 2024).