How to divide a loan in a divorce
Unpleasant emotions during a divorce will add the need to divide the loan. An overwhelming number of families have at least one loan taken to buy an apartment, a car, or household appliances. When a marriage is dissolved, not only the apartment, the car, the household appliances, but also the debts in the banks are divided in court.
We divide the property for two
It is possible to resolve the issue of the division of property and obligations in a peaceful manner without litigation. The parties to the divorce proceedings are fairly correct to agree on who and in what volume will begin to repay the loans. If the conversation does not work, in case of divorce, the following provisions of the Family Code on the division of property should be remembered:
- The common property is everything that was acquired by each spouse during the period of marriage.
- Shares in the common property are equal unless otherwise provided for by the marriage contract.
- By decision of the court, the share of one spouse may be reduced if common property is allowed to be used solely 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.To the spouse with whom minor children remain, the court can increase a share in the general family property.
Credit can stay with you
The Family Code contains such provisions on the repayment of loans issued in marriage.
- Total debt obligations are distributed in accordance with the shared distribution of property.
- Collecting of general debts can be turned on common property of spouses, or on property of that spouse who has received the credit.
By default, if a married person receives a loan, the funds go to general family purposes and the debt must be repaid together. It does not matter who signed the loan agreement and for whom the loan was made - the spouses have obligations to return the money to the bank equally.
In a situation where the 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 a loan is taken for personal needs, it is possible to prove this in court and relieve the second spouse from its obligations. There are also scenarios where a divorce reveals a debt to the bank, about which one of the spouses does not know anything.Usually, banks request the written consent of the person married to the borrower to apply for a loan, or insert into the loan agreement a clause stating that the second spouse is informed about receiving the borrowed funds.
Often, when applying for a large amount of loans, the creditor bank insists on attracting a second spouse as a guarantor or co-borrower. As a rule, a mortgage loan is issued on both spouses, and it will have to return it together.
If the court has decided on joint liability for the loan, an agreement should be concluded on the timely payment of its part of the mandatory monthly payment. Otherwise, one of the spouses will have to repay the monthly payments independently 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, quarterly or annually.
Is the bank ready to divide the loan between the former spouses?
Difficulties arise in reaching agreements between the former husband and wife, but it is even more difficult to settle the issue of repayment of the loan with the bank.If, by court decision or by amicable agreement, one of the spouses needs to take on loan obligations, the problem may be that when issuing 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 towards debt restructuring. He is more likely to insist on the sale of the property purchased with a loan and the early repayment of the loan. If, for example, a loan was taken on the security of real estate, the bank will most likely take an apartment or house. If the issue is not settled in a timely manner.
The loan section does not depend in any way 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 on an individual basis.
Another problem arises: if one of the spouses is a guarantor, and the second is a borrower, then the borrower can withdraw from solving common financial issues and the obligation to repay the debt in full will fall on the guarantor. In this case, only after the loan is repaid, the guarantor will be able to go to court to compensate for his own costs by the borrower.
In conclusion, I want to wish you good health and a real and long love. Let such problems pass you by.
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