How To Split a Mortgage in a Divorce?
Divorce is always associated with various difficulties and bureaucratic procedures. One of them is the division of property. Some divorcing spouses believe that only property is subject to division.
But the law says that jointly acquired debts are also included in the total estate, which must be divided. At the same time, there are simpler processes (for example, the section of the credit on the payment card in divorce) and more complex, which, in particular, include the section of the mortgage loan in divorce.
The General principles section of the mortgage loan
The division of mortgages between former spouses remains a pressing issue. This is due to both the long-term nature of such a loan (which is why borrowers often have to pay it almost all their lives), and the presence of expensive collateral, which is acquired on credit real estate. The basic rules of the mortgage section are as follows:
If the loan was issued during the marriage, it is subject to division.
The size of the share of each spouse is determined by the situation. Provided that the rest of the property is also divided equally, the loan is divided between the divorcees in half. If the principles of division of property other, it was mostly the loan is split in proportion to the share of each spouse.
The term during which the loan can be divided is three years from the date of termination of the marriage relationship.
Not only spouses but also a financial institution that has issued a mortgage agreement can initiate the division of the loan. For example, if, within three years of the divorce, the former spouse who took out the mortgage during the marriage is unable to pay the loan, the Bank may apply to the court with the requirement to divide the marital property and debts. Then the court may order the second spouse to pay the loan even after a certain time after the divorce.
Second spouse’s rights in respect of mortgage and real estate
Determination of the share of the second spouse in the division of real estate purchased on credit and mortgage loan should take into account the analysis of the situation. It is necessary to take into account both the conditions for the acquisition of housing and debt repayment and the existing agreements between the spouses. The main points that are defined by the law in terms of the rights of the second spouse are:
Initially, the second spouse has the same rights to the property acquired on credit as the first. In this case, the credit debt is divided between the two equally.
If the second spouse in writing expressed to Bank the protest concerning registration of the credit, the mortgage and mortgage real estate on it judicially it is possible to recognize a personal debt and property of the borrower. In this case, the second spouse does not claim the property and does not participate in the repayment of the loan.
If the initial payment of the loan and/or most of the debt was paid by one spouse from his / her personal savings (gift, inheritance, money from the sale of personal property, etc.), the court may still recognize such a loan as personal. At the same time, the property acquired with these funds will also be classified as the personal property of this spouse.
In the event of a dispute over the division of debt and property purchased on credit, the spouse whose rights are violated may apply to the court with appropriate evidence.
Options for solving the mortgage issue
There are different ways to divide the mortgage and the real estate purchased with the Bank’s funds. In General, the options for dividing real estate are similar to the methods of dividing the credit in a divorce.