And I won’t leave you until your loan is paid back. In most cases this should be the content of the marriage oath. Why? Since 2007, Polish courts have resolved over 60,000 marriages every year, which means that every third marriage breaks up. What about obligations? Does a cash loan after divorce go away like love?
Banks do not interfere in the emotional life of borrowers. The principle they follow is simple: people who have signed a loan agreement must pay it back in solidarity and divorce or separation does not change that. In theory, however, it is easy to say how to deal with debt in practice after receiving a court judgment? Divorce and cash loan – check what to do in this situation.
Who pays for a cash loan after divorce?
The repayment of the cash loan after divorce in the bank’s assessment is the same as before the marriage was dissolved. Until there is no delay in repayment, the creditor does not look into whether the spouses are paying the debt together, or whether only one of the parties is doing it.
The problem starts when the funds for paying the installment are not received on time. Then the creditor has the right to demand repayment from one or both debtors. It is worth finding out what the divorce looks like from the financial side to avoid unnecessary costs.
By definition, responsibility for the spouse’s debts should be jointly and severally borne by both borrowers. However, as it is in life, after a divorce it is difficult to communicate, especially when one of the parties is to blame for the breakup of the marriage.
In this case, it is safest to discuss this issue before parting, go to the bank and submit an application that will free one borrower from payment and transfer the repayment obligation to the other party.
However, it should be remembered that this solution only half the problem. If, despite the declaration made, the other party avoids paying the installments, then the bank can still call for repayment to the other party, and if it resists, start debt collection.
In such a situation, however, the person may assert his rights before a court and call on his former spouse to reimburse all amounts paid to the bank by way of recourse claim.
How do you split a cash loan after a divorce?
The division of a cash loan after divorce is much easier than the division of a mortgage. This results, for example, from a smaller amount of debt or a shorter repayment period.
How do you split a cash loan after a divorce?
When dividing property, it is best to immediately determine which of the spouses uses the borrowed money and transfer the repayment to that person. However, if the funds were allocated, for example, to renovate a shared apartment, then you can try to “assign” a loan to the person who stays in the apartment and will use it. However, both parties should go to the bank and report the transfer of the loan to one borrower.
It should be remembered, however, that in such a situation, the bank may refuse to rewrite the debt on one side. He is losing some collateral which he had when the contract was signed by two borrowers. It may turn out that after checking the creditworthiness of one spouse, it will be impossible to transfer the loan to one of the parties.
Rewriting a loan after divorce – necessary documents
The assumption of debt by one of the spouses is regulated by the provisions of the Civil Code. Pursuant to Articles 519-525, the assumption of debt follows the conclusion of an appropriate agreement between the bank and one of the spouses, with the consent of the other party.
The contract must be approved by the bank (a prerequisite), which will check the financial capacity of the person taking over the debt. To this end, it should provide the following documents:
- ID card,
- statement of earnings,
- confirmation of your financial charges (e.g. maintenance).
In such a situation, the bank often offers additional security in the form of guarantees or joining another person’s loan agreement (e.g. a new life partner).
Mortgage repayment after divorce
Spouses who entered into a mortgage contract during the marriage are obliged to jointly pay the debt irrespective of whether only one of the parties or both will remain on the loan after parting in the flat. In this situation, it is best to do the same as for a cash loan and sign the debt take-over request with the bank.
Unfortunately, most often in the case of a mortgage, the problem cannot be solved so easily, at least because of the creditworthiness of one of the parties – the monthly loan installment is suddenly the cost of only one side. To avoid such trouble, ex-spouses may think about selling or renting the property.
Sale of real estate is one of the most frequently chosen ways to pay off a mortgage after divorce. When choosing this solution, however, you should make sure that the amount we receive after selling the house is enough for us to repay the mortgage completely. If the amount is lower, both sides will have to jointly pay the missing part.
Renting a property will be a good option if the couple have shared children and want them to have some security for the future. Thanks to the fact that they decide on this option, they will gain funds to pay off the monthly loan installment. As a result, each party will be able to think about buying or renting a new apartment.
Does joint credit pay off at all?
In most cases, taking a loan by two people significantly increases credibility with the bank, and thus improves our creditworthiness. Thanks to this, we can not only afford a larger loan amount, but also receive more favorable conditions, and the lender will not require additional security from us, e.g. in the form of insurance.
However, it should be remembered that we cannot predict our future and no matter how our fate will roll – the debt, together or separately, will have to be repaid. After all, it is not without reason that credit is said to connect people more than marriage.