After divorce or separation, both spouses remain jointly liable for debts incurred during the marriage, including mortgages. To sever ties with the shared loan, repurchasing the credit to cover the outstanding balance is a practical solution. Here's how it works in practice.
During marriage, spouses are jointly responsible for household debts related to child education—such as school fees, leisure, and extracurricular activities—as well as housing costs like utilities, rent, insurance, and condo fees. This extends to daily expenses, taxes, consumer loans, and mortgages. Spousal solidarity allows one partner to incur such debts without the other's consent, binding both to repayment regardless.
Creditors can pursue either spouse for reimbursement, even if only one agreed to the debt. This applies under community property regimes. In separation of property regimes, creditors can only target the borrowing spouse's assets and income.
Mortgage solidarity persists post-separation, with banks able to demand payment from both parties until the loan is cleared. To resolve this, separate the loan by one spouse buying out the other's share, known as "repurchase of balance." This lets one retain the property while compensating the ex-spouse for their equity, called the balance.
Calculate the balance via simulation. For a $250,000 home with €70,000 outstanding, the cash payment is €90,000: ($250,000 / 2) – (€70,000 / 2). The buyer needs €160,000 total: €90,000 cash + €70,000 to settle the loan.
Fund the balance payment with personal savings or a bank loan. Often, a credit repurchase (loan consolidation) covers the balance plus other debts, lowering monthly payments and debt ratio for better affordability.
Banks scrutinize eligibility: debt ratio under 33%, clean financial/banking history (no incidents), stable employment, and reliable income are essential. Not everyone qualifies.
