When marriage is nearing end, partners should also settle their common debts. From the perspective of banks, it does not matter who will repay the loan after the marriage breaks up. The only thing that matters to them is that they are solvent and pay on time.
The break-up of marriage is not a pleasant affair and may become more unpleasant if, in addition to the property of the spouses, they also share debt in the form of a loan or a mortgage. Good Finance looked at a few cases that are commonly dealt with in divorce.
The easiest way is to deal with a case where the credit was taken by the spouse before the wedding. At that time, it does not fall under the non-share ownership of spouses (BSM) and must be repaid by one of the partners.
A more complicated case arises if both spouses are to deal with the repayment of the loan because they were already married during the marriage, so it falls under BSM.
In practice, for example, one of the spouses takes a loan before divorcing the marriage, which he does not inform the other spouse. He then uses the loan for personal use. Should the other partner not wish to repay, it must demonstrate what the funds from the loan have been used for. “In some cases, it is difficult for the other spouse to bear the burden of proof,” adds Veronika Michalíková, Attorney at Law | A | K | MV .
In practice, Good Finance is confronted with the fact that it is not always so easy to reach an agreement that both parties would be happy with. “Most often one spouse may perceive such an act rather than an act of revenge and complicates and unnecessarily stretches such a process,” describes Lýdia Žáčková, the spokeswoman of Poštová Good Finance .
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Unless the spouses agree on the terms of the repayment of the loan, the court usually decides. In the case of divorce, there is an BSM Settlement Institute. It is part of the divorce process, and it is an agreement on how the spouses will have their common assets and the liabilities distributed after the divorce. Based on this agreement, it is possible to transfer a real estate with a mortgage to one of the partners , who will repay the loan.
The Bank is entitled to a loan from any spouse. Usually, he will wait for the outcome of the court and will recover the debt from the debtor or both.
Another problem is the misconception that one of the spouses who earns more has a greater right to an apartment or house. Thus, it claims exclusive ownership of the property without further settlement, arguing that the mortgage payments and the cost of the household went exclusively out of its income. “At the same time, spouses are economically equal even if they work both and their income is different,” adds experts.
Deletion of the debtor
If the spouses agree in court on who will repay the loan, the bank may or may not release one of them from the credit relationship. This is dealt with in addition to the loan agreement signed by both spouses.
The Bank decides to release one of the partners from the loan also according to its creditworthiness, ie the ability to repay the loan . If the new borrower does not meet the conditions required by the bank, the new borrower may decide not to release another borrower from the loan . And they will both have to repay. It is not decisive in terms of credit whether or not the debtors are spouses. Divorced are still co-borrowers.
The situation can be resolved by having someone else access the loan instead of one of the ex-spouses.
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Sale and purchase
Another possibility is that ex-partners sell a common apartment / house and repay the loan early. Or, he buys his share of each other in the form of either a refinancing mortgage or a new mortgage in the same bank.
Settlement before divorce
Good Finance therefore advises to settle loans before divorce. A divorce agreement also avoids a situation where one partner stops paying off the loan and the bank can recover the debt from the other.
For example, if the wife has a decision to settle BSM, where it is clearly stated that the mortgage is to be repaid by the husband, but he does not, the bank should no longer bother her. Debt will be recovered from the ex-husband.
Oral agreements? Rather not
Sometimes the spouses only agree to repay the loan after the break-up only orally. This can end badly. Usually, the bank asks the ex-wife to repay the loan, although she and her husband agreed that he would repay it. Nothing will help her when it is not on paper.
Interestingly, if the ex-wife has to repay the loan, even if she has agreed otherwise with the ex-husband and repays the loan, she has the right to claim a refund for the loan from the ex-husband. But he must have some confirmation of the agreement. “In the event that after the termination of BSM the wife participated in the payment of the common debt of her income, she has the right to compensation for such expenses, ” adds Micka.
The obligation to repay the loan has a woman or a man, even though they are both co-borrowers and guarantors. “The spouses who acquire the property together in BSM and take the mortgage loan as a purchase act as applicant and co-applicant. Both have the same rights and obligations and both are equally responsible for repaying the loan, ” explains experts from Poštová Good Finance.
In the case of a guarantee, the bank will primarily recover the claim from the debtor. If he fails to pay, the guarantor comes. “If the guarantor should change after the termination of the marriage, it will be necessary to conclude an agreement on the guarantor change with the creditor.