A separation, a divorce is a complicated phase to manage, both emotionally and financially, so it is necessary to proceed with a regularization for credits in progress.
Credits and divorce: the steps
Credits subscribed during a union such as a marriage are subscribed to both names, even if one of the borrowers is not the origin of this request. Of course, we are talking about real estate loans, consumer loans that have made it possible to own a house, to equip it but also to buy a car. At the time of the divorce, these credits must continue to be reimbursed by the former spouses, it is possible to take steps to ensure the separation is effective.
As part of the mortgage, we will talk about a redemption of balance, that is to say that one of the two spouses can buy the share of the other and therefore recover the property. For the rest, that is to say consumer loans, it is necessary to proceed with an early repayment, see a pool of credits to reduce the deadlines.
Purchase of balance for the mortgage
In the context of a redemption of balance, that is to say the redemption of the share of the other for one of the spouses, it must then wait until the final divorce to make this change. The value of the balance will be defined according to half of the capital remaining due and half of the value of the property. That is to say that for a house worth 200,000 USD and whose credit is refunded half, it will take for the spouse who bought to pay 50,000 USD (half of the capital remaining to be reimbursed) and 100 000 USD (half the value of the good). Thus, he will have to repay a total of 200,000 USD to the bank to be fully owned.
In this specific context, the grouping of credits can make it possible to resume current loans and to include the amount of the redemption of balance in the operation, making it possible to reduce the amount of the monthly payments and to obtain adapted repayment conditions. Namely that the operation entails costs such as a passage to the notary to change the deed of ownership.
Credit and divorce: the steps
In the case of a separation, it is advisable to turn to your bank advisor for details on how to change credits, and also when a joint account exists. It is also advisable to carry out a cash redemption simulation online, an operation to recover the property if the repayment capacity allows.
In case of absence of possibility of redemption, it is then necessary to consider the resale of the real estate to allow the former spouses to repay their debts and to be able to settle their credits definitively, this then makes it possible to start again on new bases and to remake its life each on his own. Early redemption fees (or IRAs) are applied, the amount of these different costs must be verified in the credit agreements.