When a former couple has taken credit, the creditors can turn against the two former spouses. How to know who has to pay the debts?
The breakup of a couple generates sentimental and financial problems.
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When we get married, we often think of the phrase “for the better and for the worse”, but we often forget the worst. All is only love at this moment. The problems come later, when it comes to buying the house, the car, and you need to make a loan. Everything would be fine if the couple never separated. What happens when a couple decides to divorce? Can free unions be affected?
When one is a co-borrower, everyone is responsible for credit in solidarity. Apart from co-borrowing, there is no duty of assistance to the other, there are no legal obligations. This is the very principle of free union.
Regardless of the type of couple, creditors can seize undivided assets to share. In the case of an Indivision PACS, where each owner owns 50% of the property by default, the creditor can seize the property in question, sell it, and repay with 50% of the money of the property sale. The rest of the money from the sale goes back to the spouse who was not in debt.
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If we have too many credits to repay, and we are more likely to pay child support, the child should be given priority. This is why the redemption of credit can be a real lifesaver, to use as a last resort. It is still better before arranging with his ex, if possible, to postpone the payment of alimony.
Credit and compensatory allowance
The compensatory allowance is a sum of money, paid to one of the spouses to compensate for the disparity in living standards that will develop between the spouses after the divorce
Article 270 of the Civil Code
The compensatory allowance thus exists to compensate for an excessive difference in the standard of living of one of the spouses as a result of the divorce. The one who earns the most money then pays a sum of money to the ex poorer spouse. This benefit is fixed by the judge, which takes into account the income of the spouses to calculate the amount to be paid, but also the professional qualifications, the marriage years, the health, the inheritance. Normally, the compensatory allowance being calculated according to income, no one should be forced to make a loan to pay for it. But of course, the exceptions are numerous, and sometimes an ex can pay a compensatory allowance rhyming with “confiscatory”, the benefit exceeding more than half of its income. The compensatory allowance is mostly lump sum, even if the situation of the ex-couple is changing diametrically opposite, the former now ruined is still obliged to pay the benefit to his former wife remarried to someone rich.
The compensatory allowance can be paid in two ways: in the form of a capital, or, more rarely, in the form of an annuity. With the capital payment, the ex knows how much he has to pay, and for how long. Generally, the payment is done at one time, but can be spread over a maximum of 8 years if necessary. Other times, the compensatory allowance can be paid in “kind”: the attribution of a property for example. In certain exceptional situations, when the beneficiary can not provide for himself (age, health), this compensatory benefit may be paid in the form of a life annuity, for life.
Therefore, there is normally no need to make a credit, the staggering of the payment of the compensatory allowance being supposed to suffice. But no one is immune to a change of life situation, and feel difficulty paying the benefit. As with child support, the compensatory allowance may be revised: staggered duration of the payment if the benefit is paid in the form of capital or a change in the amount paid if the benefit is in the form of an annuity. This decision is always made by a judge, and only in case of significant change: remarriage of the creditor, loss of the debtor’s employment.
Divorce with an over-indebtedness file
Another situation, unfortunately quite common, occurs when a couple wants to divorce while an over-indebtedness file is in progress. It is most often a real financial impediment, blocking the couple for several years from a sometimes life-saving separation. But legally, nothing actually prevents a couple in personal recovery procedure (article MarKet) to ask for a divorce!
In the theory, it is enough to re-file an over-indebtedness file separately for each of the ex-spouses, after liquidation of the community. The debts will thus be distributed. But beware, nothing obliges the overindebtedness commission to accept these new files, and one can find oneself in a situation even more complicated than before, especially if it is the former who had the majority of the incomes.
Credit Redemption and Divorce
Before arriving at the file of over-indebtedness, it is always better to try to get out of it by its own means. Ideally, we should renegotiate our debts with each of our creditors, asking for an extension of the repayment term. Consumer credit companies and banks may be receptive, preferring to extend the term of the credit (if there is still some margin) rather than risk losing everything in a personal recovery process.
The ultimate solution, to activate as long as there is still time, is the redemption of credit, as we mentioned above. By lengthening the repayment times, we can have smaller monthly payments, which allows to breathe a little while waiting for better days. But it is essential to do so before ending up in debt. The whole thing is to anticipate, including a possible divorce (I advise you to read about it “credit and risk of divorce”). The repurchase of credit can be made to two, by agreeing with the spouse of the part to refund of each one. It is safer to make each one a credit surrender separately, agreeing in advance who reimburses what, and sticking to it. Beware, however, it is more difficult to obtain a credit surrender when you are alone, hence the interest of staying in good terms with his “future ex” spouse and make a buy-two.
- How to spread a debt
- Becoming insolvent to escape creditors
- How to keep the house after a divorce
How not to pay the debts of his ex?
Divorce causes, in addition to moral damage, sometimes dramatic financial consequences. The Act ensures that none of the former spouses is aggrieved, by providing maintenance to the guardian of the children, or a compensatory allowance to the one who loses too much of his standard of living.
Faced with a couple in debt that wants to separate, the solutions are difficult to implement, the best is to succeed in separately getting each a debt overhang.