Credit Repurchase After Divorce
A divorce has an emotional as well as a financial impact. You have to share the property and debts contracted during the marriage, then decide the amount of support. How to organize?
The sharing of goods
In the event of an amicable divorce procedure, the separating spouses must draw up, before even appearing before the family judge, an agreement to provide for their future life and in particular the sharing of property purchased in joint possession. If it is decided that one of the two joint owners keeps the main residence, he will have to buy the share of the other. This is called the balancing act. But he will also have to continue to pay the current mortgage, to which will be added the notarized costs of liquidation of the community (2.5% for the public treasury and the fees of the notary).
To determine the amount of the cash payment, it is recommended to have the property appraised by a neutral expert, a real estate agent or a notary. Once the value of the property is known, it will be necessary to subtract from it the amount of the capital remaining due, and divides the sum obtained by two. A new loan is most often the only way to finance the sharing operation. The bank will then propose a repurchase of credit for separation including the mortgage in progress as well as additional capital for the balance and the costs.
The operation will make it possible to adapt the new monthly payments to the income of the divorced borrower, most often by extending the duration of repayment. But the creditor will also take into account the contribution of the borrower, constituted by the difference between the new credit and the value of the property.
Distribution of credits in progress
If the spouses have contracted loans, two options are possible:
– they distribute the credits and repay them alone: they must then stipulate it in the divorce agreement by listing them precisely;
– they continue to reimburse them together according to the creditworthiness of each: in this case, the amount of the participation of one and the other must be noted in the divorce agreement.
Otherwise, it will still be possible to repay them in advance by means of a repurchase of credit from divorced borrowers.