When there is a divorce, it is common to think about how to distribute assets. However, what about loans? It is very common in marriages to ask for a loan at a given time to acquire some asset, often with both spouses as owners. As expert divorce attorneys, we are aware of any doubts you may have in this regard. So, below, we explain all the options that exist when there is a loan and a divorce occurs.
Options in case of loans and divorce
- Pay off debt and pay off credit: In order to avoid potential fights, the best option is to pay off debt as quickly as possible. In the case of financing a good, what can be done if there is not enough money at the moment, is to sell that good to be able to pay what is missing from the loan and leave the issue settled.
- Change the owner: in the event that one of the spouses wants to continue enjoying the financed asset, a good option is to change the ownership in the loan contract. In this case, it must be borne in mind that the bank must assess whether the party that has the loan has an adequate financial situation for it.
- Sharing the loan after divorce: If neither of the two possibilities mentioned above are adequate, there is a third solution: sharing the loan. Here the two holders are kept, and each of the spouses must be responsible for paying half in each monthly payment, without giving problems to the other party. It is a simple alternative, but it involves risks, since it may be the case that only one party can enjoy the financed asset, or share its use with the other party in an equitable manner. It can also happen that one of the parties stops making the corresponding payments without prior notice, for example.
A divorce process can be complicated in many ways, especially when it is not mutually agreed. The Johnson and kleven greatly facilitates the procedure, but the issue of loans is something that must be resolved thoughtfully between spouses so that there is nothing out once completed marriage.