In the past, declarations made before the altar were synonymous with the permanence of the relationship. It is now said that joint credit connects people more than marriage vows. Although we remain a joke, it is hard to deny that there is a lot of truth in this statement. What happens to loan agreements at the time of divorce? What do the procedures look like? Credit and divorce? Let’s find out what rights we have in this case.

Credit and divorce

Credit and divorce

When the marriage ends, the sentiments usually end. Both sides must agree on the division of property and the conditions of divorce. It’s good if they get along without interfering with any institution. They agree: you take the car, I take all the equipment from the apartment, take the cat, I take the dog with me (the issue of childcare is a separate matter). Such a settlement is not only the easiest and fastest way to get a divorce, but also a chance to preserve privacy and parting in harmony.

It is worth facilitating at least this stage, because with a joint loan, especially a mortgage, unfortunately it will not go so easily. We will not cut the loan agreement in half, and there is no possibility that due to the breakdown of the marriage, any lender will give us repayment. This is one of the factors that we probably do not think about when applying for a loan, and which, if our life situation changes, will directly affect its repayment capacity. Is the only solution to regulate it by one of the spouses, e.g. the one who earns more?

Loan and divorce – can you split it after divorce?

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We need to know that during a divorce case the court does not deal with dividing the spouses’ debts. Let’s assume that the decision was made that the flat with the mortgage was granted to the wife. Does this mean that she should take on the repayment obligation? Absolutely not. In the light of the law, such a court judgment for a bank is not synonymous with such a requirement.

Art. 519. § 2. Civil Code The assumption of debt may take place: 1) by contract between the creditor and a third party with the consent of the debtor; the debtor’s declaration may be submitted to either party; 2) by an agreement between the debtor and a third party with the consent of the creditor; the creditor’s declaration may be submitted to either party; it is ineffective if the creditor did not know that the transferee is insolvent.

Another situation is the division of property in the form of a notary public, where there is a provision about the obligation to pay the loan by one of the spouses. However, the agreement with the bank still provides for both spouses, and hence, the financial institution has the right to require both husband and wife to pay the liability.   The loan does not have to go to the spouse who became the owner of the property – the debt remains shared. As we mentioned, formalities that would clarify this issue should be done before a notary. He creates a notarial deed and notes that only one of the spouses, due to the division of property, now has the obligation to pay further loan installments. Unfortunately, this solution is imperfect, because if the party does not comply, the bank can still demand repayment from the latter. In this case, no court decisions or notarial deeds will help. The only way is to go to the bank’s headquarters together, where the spouse assuming the commitment will sign the documents (annex to the contract) releasing the wife / husband from financial liability for the loan. In legal terminology, this is called debt assumption.

Cash loan and divorce – alternative repayment solutions

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In the case of cash loans, the matter is a bit simpler, if only because it concerns much lower amounts. The mortgage loan amounts to several hundred thousand zlotys, the ceiling for cash loans starts from several hundred zlotys (maximum values ​​do not exceed several dozen thousand). The shorter repayment period is also significant – it is a maximum of 9 years, while mortgage loans are liabilities for up to 30 years. However, the loan remains a loan and the spouses, despite divorce, are jointly and severally liable for repayment.

Also in this case you can submit an application and apply for taking over the debt and rewriting it for one of the spouses. However, it is also worth considering selling some of the assets (still in common) to completely settle the debt and get rid of the problem. Thanks to this, we will also avoid increasing our debt. Remember that the longer you pay back the loan, the more it will cost us, based on interest and interest. The same will happen when we decide to apply for refinancing a loan or come up with the idea of ​​paying off one (“marriage”) loan to another. These are very makeshift and time-consuming methods that will not contribute to getting rid of the problem quickly and completely. They may even get us into even more financial trouble due to the debt loop.

Loan after divorce – entering another family member

It cannot be ruled out that the bank will not agree to one of the spouses taking over the debt. It happens when he decides that the borrower will not be able to deal with the commitment on his own. Much will depend on the value of debt, repayment period and the amount of earnings of borrowers. A negative decision is not the end of the world. The bank may propose that a new life partner of one of them or a selected family member be included in the agreement instead of husband / wife. The whole embarrassment is that adequate creditworthiness is maintained, giving the bank as such a guarantee that the loan will be repaid on time.

Helpful in this situation will be those family members who are already retired. This is the type of income that lenders particularly like – permanent, and its value can only increase at most. It will simply be a good collateral for the loan. Is this another alternative to dealing with joint credit evidence that it is easy to get rid of such a commitment?

Loan with your spouse – there is no situation without a solution

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Banks are eager to grant loans to couples / marriages, as they gain greater certainty of enforcing their obligations on time. Even if one of your spouses will not be able to cope with subsequent loan installments after the divorce, the other one always remains. Meanwhile, repayment is never pleasant and always requires borrowers to make some sacrifices. After all, the amount of budget available each month is at stake. The situation can be further complicated if the credit agreement does not contain one name and two as marriage. When a divorce occurs, the loan remains an element that cannot be divided in half like other assets. The task is not easy, which does not mean that in this area the spouses cannot agree.

Willingness to cooperate, even in the face of merciless banking procedures, will certainly facilitate getting rid of the last link connecting borrowers with each other. Issues regarding the topic of credit and divorce are complicated and ambiguous, so it’s better to avoid problems and try to reach an agreement with your ex-spouse.