What about borrowing money and a divorce? Because you probably ended up on this page through a search engine, we suspect that you are getting divorced or have already divorced. So you are not in a good situation. We would also like to wish you this strength, but also to list the much-needed information for you, so that you can still separate in a somewhat relaxed way. Because divorce is 1 thing, but it should not become a fight divorce! Do you have a loan and are you getting divorced? Then you are curious about the consequences for you and your partner.
Both signed the loan agreement?
Have you both signed a loan agreement? Then you are also jointly liable for this. Together you are jointly and severally liable for the entire loan. What does this mean for you in concrete terms? Joint and several liability in this case means that you must always meet the payment obligations. Does this not happen? Then you and your ex-partner will be held liable. It does not matter if you are divorced while the loan is still running. If someone does not fulfill his obligation, it does not mean that only he has a problem. Both contractors bear the full responsibility.
Non-compliance with payment obligations
In the event of non-compliance with the payment obligations of one contractor, the lender will recover the loan from the other contractor. Conclusion: Did you put a joint signature under the loan contract at the time and did you therefore both enter into an agreement? Then both of you must also ensure that the loan is repaid. If you or your ex-partner renounce, you both have a problem.
Always make sure you have a divorce agreement
Ensure that a divorce agreement is drawn up after a divorce. A divorce agreement will contain important agreements that you have made between yourself. Arrangements regarding a loan are also laid down herein. In a divorce agreement it will be recorded, among other things, what the agreements are with regard to the distribution of the repayment vis-à-vis the loan. However, this covenant does not release you in any way from liability for debts that have arisen. It is just an agreement that is made between 2 parties, a lender does not have to take this into account. In fact, the covenant is in no way included in the assessment of the distribution of debts.
Make good agreements
In addition to drafting a covenant, it is best to make good agreements with your ex-partner regarding the repayment of outstanding debts. For example, it is generally more convenient if only 1 of the partners repays the monthly debts, with the other partner transferring the money to the account of his ex. This keeps the whole uncluttered and therefore no misunderstandings can arise. If your partner cannot pay once, you will immediately notice this and you may be able to advance the missing amount in advance to get it back at a later time.
The former partner is released from the joint and several liability
In the best case scenario, one of the partners takes over the loan or credit. In that case, the former partner will be released from the so-called ‘joint and several liability’. Note: You must first submit this to the bank or lender and this is only possible if both partners agree. Every lender or bank will ultimately agree if it appears that one of the former partners can bear the risk independently.
Have a calculation made
Have a calculation made by your accountant or by the bank / lender. Is it ultimately justified to take over the loan as a partner only? Then it is wise to try to transfer the loan to a cheaper provider that charges less interest. Moreover, the lender or bank does not have to agree to the dismissal of one of the partners from the joint and several liability.
What about a loan taken out before the wedding?
In principle, credits and loans (including mortgages, credit cards and installment purchase) that were contracted by you or your partner before marriage (ie before you got married) are always linked to both partners. So did your ex-partner take out a loan for getting married? Then you are also responsible for that loan. However, there are exceptions, for example when other marital conditions have been agreed.
If you are married under marital conditions, it is possible that you do not have to contribute to the repayment of certain debts. But loans that were taken out jointly during your marriage fall outside the prenuptial agreement. If you are married in a community of property, it does not matter whether debts were incurred before or during the marriage, you are liable for half the entire package. In case of doubt, it is best to present the situation to the lawyer you use to arrange the divorce. If you do not use a lawyer, you can always go to a legal store that you will find in almost all major cities.
Divide the loan after a divorce
Why make it difficult when it can also be easy? So why not just divide / split the loan after a divorce so that both of you pay for the repayment fairly? Splitting your loan after a divorce is usually possible at banks and lenders. In that case 2 new loans are requested for both partners. Together, you repay 1 old loan with the new loans.
Splitting up is not always possible
Remember that splitting up a loan is not always possible, unfortunately. This is assessed by the bank or lender. Because if you want to split a loan into 2 new loans, then each loan application will of course be assessed separately. You and your (now) former partner will both have to have sufficient income. People also look at your fixed costs. In short: The bank / lender will assess whether you are creditworthy.
Where can I find a cheap lawyer
For a ‘simple’ divorce, even where children have to be taken into account and even if there are major financial interests at stake, you can go for it with a cheap lawyer. For an amount of around € 330 (excluding court fees and per person) your divorce can already be arranged completely. The stated amount is for a divorce including covenant and parenting plan. All this is handled entirely online. Should an arrangement be made for the children, then of course a parenting plan will have to be drawn up, which is also mandatory. With the above-mentioned settlement you don’t have to go to court yourself either, the lawyer will do this for you. A divorce must always be submitted to a judge. With this online solution you no longer have to go to court yourself. With this all-in package, the costs of the divorce do not increase.
For people who do not have sufficient capacity to be able to pay for a divorce, there is the possibility of having this done for free. However, the conditions for eligibility for this have been tightened considerably in recent years. If you have a gross income that does not exceed € 26,000 per year, you are entitled to an allowance whereby you only have to pay part of the amount. If the annual gross income of both partners does not exceed € 18,400, you can qualify for a free divorce.
How long does a divorce last
Do you agree on everything? So about arrangements with the children, finances, debts, etc. Then you can opt for the online solution where you can take 4 to 5 weeks into account. You do not have to go to court yourself, but you do have to come and prove your identity at the law firm, so that the lawyer knows who he is dealing with and the divorce is requested by both parties. If the above does not apply and problems must first be solved, if one of the partners does not want to sign the documents, you can safely count on a lead time of around 9 months to a year. This shows again how important it is to stay in conversation with your ex-partner.