During the marriage, we often make joint commitments: we buy a house / flat for a loan, we borrow money from the bank for a car, etc. What, however, happens when we decide to divorce? Divorce itself is sometimes a bitter experience, and many people are also asking themselves – how to solve the issue of loans: cash and mortgages? Who repays the loan after divorce?
Divorce and cash loan
Loans and divorce: this is often another source of stress related to marriage breakdown. Unfortunately, the judicial division of property will not help here because it does not apply to debt. So it turns out that, even though our relationship has long since gone to the past, the specter of regulating jointly drawn loans is still hanging over us. Joint commitment of the spouses, which is a cash loan, means that after divorce we are obliged to pay it back. It is worth remembering this before making a loan decision.
Divorce of spouses and mortgage
Divorce and home loan or home loan: what happens to our commitments? As for the mortgage, the mechanism works the same way, namely: a joint loan taken by a marriage means that its settlement, even after divorce, still rests on the shoulders of both spouses and it does not matter here which party retained the property.
In that case, what can you do with an apartment for a loan after divorce? It all depends on what solution the former spouses choose, so it’s worth trying to reach a consensus. The flat / house can be sold, and the funds obtained in this way can be used to pay off the loan, of course, it should be carefully checked beforehand whether such a solution is acceptable and justified in our situation.
Joint credit and divorce – what next?
Repayment of a loan after divorce is of great importance for our financial future. We already know that for a joint cash loan and a joint mortgage, we are still liable after divorce.
There are several ways to ‘deal’ with a joint cash and mortgage loan. One of them is the so-called takeover (rewriting) of the loan. What is this about? The loan, in consultation with the bank, is “taken over” by a former husband or ex-wife. Of course, then it is necessary to have the required creditworthiness, because the bank must be sure that the acquiring party will be able to settle the debt.
It should also be emphasized that the take-over of a mortgage, cash loan, etc. can only take place in a situation where, apart from the bank, the former spouses also agree. This means that if a former husband wants to take over the loan, he can do so only with the consent of his ex-wife.
To sum up: divorce does not release ex-spouses from the obligation to repay joint cash and mortgage loans. On the contrary, their liability is joint and several (it is possible that the bank will require the payment of a certain amount or the entire liability not only from both spouses, but also only from one of them, while the comprehensive settlement of the loan by any party means that the other party no longer has such an obligation).
It is important to keep this in mind. It is worth using a lawyer’s help and check what option we have when it comes to regulating similar issues. Of course, when deciding on specific solutions, it is good to keep in mind the issue of their profitability.