When we are in a relationship, it is quite common to take out a loan to finance certain projects. Indeed, whether it is to buy a car, furniture or finance any other need you may have had with your ex-spouse, credit proved to be the right solution at that time. Today, the situation is no longer the same! Wondering what will happen to your private credit after the divorce? Who of the two spouses inherits the monthly payments to be paid? Is it possible to repay or redeem his credit to the lender? In this new article, find out how to proceed with your private credit after divorce.
When there is no joint and several liability
Determining which of the spouses will pay the rest of the total amount of the loan comes down to questioning the terms of your loan agreement. If there is no clearly indicated joint and several liability (co-borrower), then the borrower is solely responsible for private credit after the divorce!
The borrower is solely responsible for private credit after the divorce
If there is a divorce or separation, only the one who made a private loan is responsible. Which is logical: the spouse has no role to play when signing the contract. After all, there is no name in the loan agreement. So even if you are married, your partner does not automatically have co-borrower status.
Spouse has improved your creditworthiness…
On the other hand, being in a relationship improve your creditworthiness if you want to take out a loan from a credit agency. Indeed, for the case of a consumer credit, the lender will do what is called a credit check. Thus, financial institutions will judge the repayment capacity of the borrower.
It goes without saying that having a working spouse increases your chances of convincing a bank to grant you private credit. As a result, it is quite possible that your private credit application mentions the name of your spouse and that supporting documents concerning him had to be provided when you concluded your loan. However, this does not make him a co-borrower and therefore does not necessarily commit him to repay the private loan after the divorce.
If the spouses are jointly and severally liable
In some cases, the spouses can be co-borrowers of a credit agreement. This, on the only condition that the loan contract clearly stipulates it!
The spouses are co-borrowers
In the event that your two names appear as co-borrowers in the loan contract, you will both be jointly and severally responsible for repaying your private credit after the divorce. Moreover, many couples do not divorce because of the total cost of their joint debts.
A co-borrower can however request, with the agreement of his ex-spouse, that he repays the private loan alone. That said, the lending institution could refuse this request, depending on the financial situation of the future borrower.
And the matrimonial regime in all this?
So far the situation is quite simple! You are in principle a single borrower and therefore only one person to repay the private credit after the divorce. If, on the contrary, you are a co-borrower, then you will be two to repay the loan. However, at this stage the information is not yet complete! Indeed, contrary to what you may read on some blogs, your matrimonial regime will also have an impact on the repayment of your private credit.
Participation in acquisitions and regime of separation of property
In the vast majority of situations, you got married under the regime of participation in acquests. If this is also your case, our previous explanations apply and you can therefore skip this paragraph. Ditto for people married under separation of property regime !
In the matrimonial regime of community of property, private credit after divorce can be shared
Under community property regime, the spouses are jointly and severally liable for all the debts contracted. Whether it is one or the other of the spouses until the day of the divorce. This is called the principle of solidarity between spouses. If this is your case, it is very likely that the judge will decide to defer an equal part of your debt to your spouse. This distribution will most often take the form of a reduction in the marital benefit obtained by one or other of the parties. That is to say that the credit will not be contractually divided by two but that in the end you will have reimbursed this debt in equal part with the calculations made during the liquidation of the matrimonial regime.
Our conclusion on private credit after divorce
Divorce is unfortunately often a painful ordeal for all parties. When financial problems are added to this situation, communication becomes very complicated! In this situation, the sayings "Forewarned is forearmed" or "We're always smarter afterwards", lend themselves particularly well to our following advice.
A few tips to avoid complications…
Indeed, to avoid this type of complication, it is always better to consider the worst before concluding your private credit agreement and also before getting married! If things are clearly defined beforehand, complications are often avoided afterwards.
In the case of the conclusion of a private credit, it is always possible to set up in parallel an acknowledgment of debt between spouses. Similarly, it is also possible to conclude two smaller credits in the names of each spouse. This, instead of one in the name of the same person.
Establishing an acknowledgment of debt can avoid many problems.Lica advises you in a neutral and objective way
Now that you know all the information relating to your private credit after divorce, take the time to contact our specialists to find the best solution. You can always count on Lica which will accompany you in a confidential way in your steps.
Do you have questions before making your request? Our advisers are there to answer your questions 7 days a week directly on WhatsApp. Ask us for more information and we will be happy to answer you!