Repayment of the loan after a divorce
What about the loan after a divorce?
Loan to buy a home, build a house or inhale the real estate mortgage, usually together with the spouse for years. Despite the fact that it is usually a long-term commitment, at the time the agreement is unlikely to wonder what will happen in 10 or 20 years with the repayment of the loan. A can occur different, unforeseen situations that may affect our liquidity, eg. A divorce.
What will happen to the apartment or house?
Which spouse will be responsible for the repayment of the loan? So when the couple divorces, and the loan is for life, not a stalemate situation. You should take some solutions that are possible by arrangement between the parties. Let us remember that at the time of the divorce between spouses formed separate property. However, even after the dissolution of marriage, both spouses are jointly and severally liable for the obligations which dragged along in the course of the marriage. The priority is then to decide whether both spouses will continue to jointly repay the loan, if one of the parties to take on this responsibility. Spouses can also conclude an agreement by agreement, under which they can determine that one of them, eg. For a more favorable financial position, will assume the obligation to repay the loan. Undoubtedly should jointly identify these issues.
If there is a dispute between the spouses,
This division of marital property can be made before the court. It is important that the court may make a distribution of assets, but does not make the loan division. The court may only indicate that a spouse should pay back the loan. In view of the difficult financial situation of one of them, the court may require the repayment of the loan to the spouse who is in a better financial situation. This is the only binding between spouses, but not to the financial institution (the creditor). In a situation where a spouse released by the Court from the obligation to pay the loan will be asked to pay by bank and settles the debt, may claim from the former spouse’s right of recourse. However, this also requires the court proceedings.
Divorce does not affect the validity of the obligations
incurred by spouses under the loan agreement. Still responsible for the repayment of the loan, they both. The court may decide to whom the property admits, but this has nothing to do with the repayment of a loan to a financial institution which granted the loan. Despite the fact that only one spouse uses the apartment, they have an obligation to repay both. In case of default in payment of loan installments will be paid to the bank to both Borrower. It is also possible to rewrite the entire loan to one of the spouses. For this purpose, to negotiate with the financial institution that granted the loan, the change in the conditions of the loan agreement. You should then apply to the bank to agree to enter one of the spouses, as borrower solely responsible for the repayment obligation. Remember, however, that the decision in this regard, it is to the bank. In the event of a divorce borrowers financial institution is not obliged to change the contents of the loan agreement.
The Bank has no obligation to agree
such a solution, if it considers that the creditworthiness of one of the Borrower is not sufficient to repay the loans as the sole borrower. In order to increase and improve the creditworthiness of a financial institution may propose that the spouse who wants to be the sole borrower, provided additional protection for example. Guarantors or mortgage. Remember that the financial institution is essential that the credit agreement was developed further so that the loan installments are paid a fixed amount every month. If the bank agrees to such a solution, then the other spouse is not responsible for the liability to the bank.
Let us remember!
Alone can not make any decisions without the approval of the financial institution. Previously, it is important and rational agreement between spouses to establish rules on the mortgage.