Credit after divorce

Divorce is usually not a pleasant thing. Not only that two people go their separate ways afterwards. Separating the household and the many costs associated with a divorce can also be very painful. Many separated people must first take out a loan to pay all the costs of the divorce and to be able to start a reasonably regulated life in a new environment. All of this should also be possible without problems with a good income. Because loans, especially installment loans, are granted up to 20,000 times a day in Germany.

The situation is somewhat different, however, if the spouses took out a loan that was not yet fully repaid to the bank after the divorce. Who pays the loan after the divorce and the related debts? Are there clear rules in this regard or do the spouses have to agree on the credit after the divorce?

A classic case

A classic case

Since loans are completely normal nowadays and are part of our lives, it is not uncommon for spouses to still have one or two loans at the time of the divorce that they had taken out together and which still have to be paid for.

If both spouses have taken out the loan together, both must also take care of paying the debt. In the event of a divorce, the initial and final assets of both spouses are analyzed. This also includes debts being included in this analysis. Only the money that remains then has to be shared. Of course, this also applies to debts. It is irrelevant whether both spouses can do this. Because the sharing of profits and losses in a profit equalization is regulated by law.

What is the practice like?

What is the practice like?

If the loan was created after the divorce by buying a property, it is important to see who takes over the property after the divorce. If a spouse can afford to repay the debt and thus take over the property, he gets the surcharge. If this is not possible for any of the former partners, the property must be sold so that the loan can be serviced.

However, if only one spouse took out the loan, the legal situation is a little different. Then only the spouse who took out the loan is liable for the loan after the divorce. This can be very disadvantageous for the person concerned, as he sometimes has to bear a large debt burden and the other spouse leaves the relationship without major cuts. Therefore, during marriage, it should always be ensured that both partners sign loan commitments together, so that they can also be achieved together and the burden of this is spread over several shoulders.

By the way: If a spouse has committed to assume the debts that both partners have generated during the marriage, this will be taken into account positively in the maintenance payments. This means that the loan does not have to be rolled up again and possibly shared, but can continue to be served as normal. If, for example, the man has decided to pay the joint loan after the divorce, in return he has to pay less maintenance to the woman and possible children. If the woman has taken on the part of the settlement, she receives more maintenance or – insofar as she has to pay maintenance for her husband – has to pay less maintenance to the ex.

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