Loans: What Happens When Divorcing?
A jointly borrowed loan during marriage can have various effects on partners during and after the divorce. Divorces are really not a nice thing, but they happen more and more often: The statistics say that a third of marriages are divorced. The divorce usually becomes a dispute between the parties regarding a loan that was taken out during the marriage. How is this loan dealt with?
What are the options with the loan?
One can differentiate here fundamentally: If only one partner took out the loan on his own without the other having to deal with it in any way (for example as a guarantor or borrower), the repayment also remains with the person who took out the loan . If it is the case that both have taken out the loan, there are actually two options. The first would be to choose to repay the loan in advance so that there are no more claims from the borrower. However, it can happen that a prepayment penalty still has to be paid if the loan is repaid earlier. Or else, you decide that the loan continues to run normally and that both partners also pay their respective monthly installments.
It is important to know that the other partner does not have to pay for a loan that has not been signed by him or for which he is a guarantor. It is only possible to ask the partner about his loan obligations if he is also named in the contract.
The loan and maintenance
In the event of a divorce, maintenance is usually a major issue in which each of the parties insists on their right. Here, the loan can again be decisive when it comes to maintenance obligations. The expenses that a partner has to pay for the loan are also counted accordingly as expenses. In principle, this means that the loan expenditure reduces the partner’s income and can therefore pay less maintenance to the partner.
Specialist lawyers are usually well versed in such topics. If there is really a divorce, a lawyer will be needed anyway – this should also be the first point of contact for further information. There are various clauses in maintenance law that state exactly what happens with different things in divorce and maintenance claims and what you have to consider so that you can assert your right.
If you took out a joint loan during the marriage or if the partners are in a surety bond, you should definitely contact the bank again and possibly make an appointment here. There may be ways to redeem the guarantee or loan in some form and get even better terms.