Divorce by mutual consent and repurchase of credit: which procedure?
Divorce results in loss of income, property sharing and additional expenses. What happens to the credits subscribed in case of divorce by mutual consent?
Spouses who decide to initiate a divorce procedure by mutual consent when they have one or more credits in common must decide the fate of outstanding before entering the court. The credit redemption can be a solution to rebalance its budget.
What is mutual consent divorce?
In France, there are four main divorce proceedings: divorce by mutual consent, divorce by acceptance of the principle of marriage breakdown, divorce following the definitive alteration of the marital bond and divorce for misconduct.
In the case of a divorce by mutual consent, the spouses agree on a draft agreement that regulates the consequences of the divorce. A passage in front of the judge is necessary to validate it definitively. Once the agreement has been signed by both spouses, the bank can make them an adapted proposal subject to final validation. The judge may, however, refuse to homologate the agreement. In this case, the spouses must submit a new project within a maximum of 6 months.
What happens to credits after a divorce?
The credits subscribed by the couple can be paid in anticipation, divided between the spouses or reimbursed according to the terms and conditions in the divorce agreement. In the case of a common property credit, the spouse who wishes to keep the property has the opportunity to buy back the share of his spouse after estimating the property and calculate the balance. As a reminder, the balance is the amount paid by one spouse to another to recover full ownership of the property acquired jointly. Generally, the rebate is calculated based on the value of housing on the market. This estimate must be made by a notary who will endorse the agreement of the spouses by the drafting of a bill of sale or a liquidation statement. However, the balance is not mandatory since it results from an agreement between the spouses.
Credit Redemption and Divorce by Mutual Consent
Credit redemption can be an alternative if the spouse can not pay the balance and the amount of monthly payments. This operation consists in grouping several credits into one, with a single rate and a lower single monthly payment thanks to an extension of the repayment period. The repurchase of credit can also provide additional financing.
It is quite possible to get information from a broker or an agency specialized in the repurchase of credit during the procedure of divorce. However, the subscription can only be finalized when the divorce by mutual consent will be pronounced, that is to say once the agreement has been deposited with the notary. In fact, when requesting credit redemption, banking institutions claim the signed divorce agreement.