Divorce Debt Sharing – Debt Consolidation



Getting divorced can be a messy enough affair in itself. Dreams and hopes for the future have fallen to the ground, and assets must now be split up and any debt distributed among themselves.

There are often certain challenges associated with having to divide debts that you may have created together. Who created what debt, who has to repay it – and is it at all possible to divide the debt? We give you the answer here.

Probate law can help but not solve the problem

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In 2012, it became possible for the county court to help divorcing couples with the settlement and division of debt that they have created together. This can be, for example, debt for housing, car or consumption, which is recorded during the marriage.

The court of trustees today offers the opportunity to share the debt between you, so that one party cannot maintain the counterparty in a financial squeeze.

At the same time, the Probate Court can collect data on debt and wealth from the date on which a petition for divorce is filed with the state administration. In this way, the probate court can see if debt has been raised from one party afterwards, which one tries to get the counterparty to pay for.

This will give a real picture of the financial situation and a fair distribution of the debt and assets between the two parties.

However, they are still jointly and severally liable for the debt and no decision will be made by the Probate Court on who has been responsible for the debt as long as both parties have signed the loan agreement.

The bank still has the last word

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Although the Probate Court has made a distribution of the debt, it can only be seen as help on the way to divide your debt and wealth. The bank is still the ones who ultimately have to help approve the distribution.

It will most often be in the bank’s interest to keep both parties on the same loan, as the joint venture is jointly and severally liable. In this way, the bank is more likely to get its money back and can collect the money from one party if the other does not comply with its payment terms.

If both parties pay the agreed monthly repayment over a period of time, the bank is more likely to split the debt, as you can see that both parties are interested in paying and living up to the agreement concluded.

In this way, the bank thus secures to a greater extent its money than if the debt is divided.

Unfortunately, even if you get divorced, it will not change the fact that you are still jointly and severally liable. You will both still have to repay the agreed monthly installment.

Even if you have to agree internally between you that the party is exempt from having to pay part of the debt, the bank will still see it as a joint and several liability and will demand the repayment of the opposite party if one does not pay.

What is joint and several liability?

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Joint liability means that each party to a loan agreement is liable for the full debt if the other party does not pay.

In this way, several persons are fully liable for the same debt obligation, and if one party fails to comply with the loan agreement entered into, the bank or other credit institution may demand the entire monthly repayment of the other party.

If one party ends up paying off the entire debt, he or she can claim half of the party with whom the loan agreement was signed in the first place.

However, in the case of debt incurred between two spouses, you are only liable for the joint debt which both have signed. If your partner has taken out a loan that you have not signed and signed, you will not be liable for the debt.

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