Divorced people together and usually jointly and severally liable for debts incurred jointly during the marriage. In the case of a mortgage, they can negotiate with the bank the transfer of the repayment obligation to one person. If it has a high capacity for this, the financial institution is unlikely to object. If this is not the case, he probably won’t agree. However, there can always be an agreement between those in debt, in which one of them undertakes to pay all installments. But the creditor will expect payment regardless of their arrangements, so the loan agreement will still formally exist. In case of problems, the ex-spouse has the right to a recourse claim against the one who did not pay the installment but was obliged to do so. Experts advise that in such a situation the division of property be carried out before a notary public. It takes much less time than often long and protracted court proceedings, which do not divide liabilities.
The bank decides
The joint property before divorce includes what the existing spouses have, that is money, valuable items, vehicles or real estate. But it also includes obligations, i.e. mortgage loans repaid for many years. To secure them, mortgages are established and the spouses are jointly and severally liable for the liability to the bank.
– In such a situation, they cannot by agreement change this state of affairs without the consent of the creditor. Therefore, to think about it at all, they should first go to the bank to examine the creditworthiness of each of the spouses separately. Only then can you assess whether any of them can take over the loan.
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The division of property can take place before a court or notary. In the first case, it is divided according to its condition on the day on which the statutory marital jointness ceases. In turn, the notary accepts the parties’ declarations, giving them more freedom in the way of separation. Both methods relate mainly to assets and do not affect debts.
Distributes assets, not liabilities or debts.
– Mortgages and the real estate burdened with them pose many problems in divorce. The first and the most serious is that the court only distributes assets, not liabilities or debts. Therefore, the method of repayment of the loan will continue to be regulated by the agreement concluded by the parties with the bank .
The creditor decides who will ultimately pay the installments. He may, however, take into account the fact that, for example, one of the divorced persons is not creditworthy, but someone in the family decides to apply for a loan or other repayment assistance. If there are no such options, they are jointly and severally liable for debt settlement. One attorney indicates that there may be an agreement in which one person undertakes to pay back the loan. The bank expects payment regardless of the arrangements between the indebted, so their liability formally still exists. However, in the event of problems, the former spouse has the right to a recourse claim against the one who did not pay his part of the installment.