”
Joint loan obligations after separation
\n\n
If spouses or partners separate, a credit liability entered into jointly generally remains unchanged vis-à-vis the financing bank. What matters is the loan agreement: if both contracting parties have signed, they are, as a rule, jointly and severally liable in the external relationship. The bank can therefore typically demand the owed performance in full from either debtor, regardless of who actually used the loan in the internal relationship or who economically benefits from the financed asset.
\n
External relationship with the bank: contractual commitment and enforcement options
\n
Joint and several liability and continuation of liability
\nThe separation as such usually does not lead to a change in the contractual payment obligations. As long as no contractual adjustment is reached with the credit institution, the bank may, within the framework of the agreements, approach both borrowers and demand instalments as well as any arrears.
\n
Significance of internal agreements
\nInternal agreements between the former partners generally cannot limit the bank’s basis for claims. An agreement under which only one person is to pay from now on may be relevant in the relationship between the parties themselves, but as a rule leaves the external relationship vis-à-vis the bank unaffected.
\n
Internal relationship of the (former) partners: equalization and allocation of risk
\n
Divergence between use and liability
\nIn separation situations, it often happens that both appear as borrowers, but economically, in the end, only one person benefits from the financing (for example, through sole use of a financed item). This can lead to tensions in the internal relationship because the legal obligation to be liable vis-à-vis the bank does not necessarily correspond to the allocation of economic benefits.
\n
Relevance of the circumstances of the individual case
\nTo assess how the burdens are to be weighted between the parties in the internal relationship, the specific circumstances are generally decisive. These include, in particular, the contractual starting position, the purpose of taking out the loan, the use of the funds, and the financial and factual situation after separation. As a rule, no general statements can be made on this.
\n
Typical constellations after the end of the relationship
\n
Financing of joint purchases
\nIf a loan was taken out to make purchases for the shared conduct of life, after separation the question may come to the fore as to who uses or realizes the items and how this affects a possible internal equalization relationship.
\n
Loan for assets attributable to only one person
\nParticular attention is often given to the case in which a loan was taken out jointly, but the financed asset is in fact or in law attributable only to one person. In such constellations, interests can diverge: while the bank can still proceed against both, the question between the parties arises as to the attribution of benefits and burdens.
\n
Continued payment by only one person
\nNot infrequently, after separation one person initially services the ongoing instalments in order to avoid breaches of contract. This can give rise to follow-up questions, for example regarding the classification of such payments and possible equalization mechanisms in the relationship of the former partners. Which legal assessment may be considered in the internal relationship typically depends on the overall situation.
\n
Differentiation between an ongoing separation situation and judicial disputes
\n
No anticipation of outcomes
\nInsofar as questions concerning loans and equalization claims in connection with separation or divorce are clarified in court, the specifically established facts are always decisive. General presentations cannot replace an assessment by the competent bodies.
\n
Notes for ongoing proceedings
\nIf individual cases are reported on in public, it should be noted that in proceedings that have not been finally concluded with res judicata effect, the presumption of innocence applies and accounts must be based on comprehensible sources. An evaluative determination to the detriment of individual parties is to be avoided in such constellations.
\n
Classification within the overall structure of assets and financial circumstances
\n\n
After a separation, loan liabilities often cannot be considered in isolation. They are regularly connected with assets, maintenance issues, matters of matrimonial property law, as well as the practical structuring of future financial circumstances. The legal assessment may therefore require consideration on multiple levels, in particular the bank-contractual commitment outwardly and the distribution of economic burdens in the internal relationship.
\n
Transition: need for clarification in the case of joint loans after separation
\n\n
Anyone who, after a separation, wishes to clarify what legal consequences a jointly taken-out loan may have in the external relationship with the bank and in the internal relationship between the parties involved can obtain support tailored to the individual case. MTR Legal Rechtsanwälte offers legal advice in family law for this purpose.
“
