How do you pay off a joint loan when you get divorced?, Divorce can be a very difficult and emotional process. But in addition, everything has to be arranged. For example, suppose that you and your ex-partner have a joint loan together. How do you handle this after your divorce?
Leave the loan the same
If you and your ex-partner separate on good terms, it may also just be that you do not arrange anything official for the joint loan. You then agree among yourself how you want to repay the loan. For example: your partner transfers part of the money owed to you every month, after which you repay the loan.
While this sounds appealing, it’s good to keep in mind that you’re still both liable. Can your ex-partner suddenly no longer cough up the agreed amount? Then you are still responsible for paying off the remaining amount.
Splitting the loan (How do you pay off a joint loan when you get divorced?)
You can also split the joint loan. You then choose a desired distribution. For example: you both pay 50 percent of the amount due. The problem with splitting up a loan is that the lender does not always agree with this.
He does not benefit from it himself. Especially when you consider that partners can sometimes have a considerably uneven income due to the family composition.
Let’s say one of you has a full-time job and the other has a part-time job. Then there is a good chance that the lender will not agree if you share the loan in half. For those with the part-time income, being able to repay is a lot less certain.
It is therefore wise to take everyone’s income into account if you want to split a loan. Then you adjust the distribution accordingly and record these agreements.
Prevent unexpected withdrawals
Do you have revolving credit? In that situation, it is always useful to set out re-withdrawals in consultation with the lender. It is then no longer possible for you or your ex-partner to withdraw extra money with your joint loan. Having to repay your joint loan is probably already inconvenient enough.
Then you prefer to avoid the risk that your ex withdraws money again for which you are partly liable.
Do you still need some extra money? You can of course also just apply for a new loan. This is then only in your name. That hopefully reassures a little more when paying off. Note: as a single person you can usually borrow less than as a couple. So first check how much money you can borrow.
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