Debt rescheduling – What are the requirements?


Many married couples who have taken out joint loans and are now planning to separate and then divorce are wondering what legal consequences this will have for them. As different as the individual types of credit and personal circumstances may be, it is important to note that the person who signed the loan agreement can also be held liable for them. If both spouses signed it, this would mean that they are jointly responsible for paying the installments.

Debt rescheduling – the requirements

If a loan agreement only bears the signature of a spouse, rescheduling in the event of separation is very easy. Neither the spouse’s consent nor any other person would need to be obtained for this. If the borrower has found a suitable offer with which he would like to replace one or more old loans from the time of his marriage, he would have to make a corresponding application and provide the bank with the necessary papers and evidence of its creditworthiness.

If the spouse willing to credit achieves a regular income and has a positive credit bureau information, there is usually nothing to prevent a debt rescheduling in the event of separation. It becomes a little more difficult if the spouse in question has not previously worked. In that case, however, he may not have been solely responsible for the loan agreement in marriage.

Unemployed, Hartz IV recipients, low earners or housewives are generally only creditworthy if the spouse signs the loan agreement or if they can find a solvent guarantor. If both spouses have signed the loan agreement, debt rescheduling is much more complicated. A clear legal regulation would have to be made as to who will take over the loan installments and to what extent.

Debt rescheduling – the conditions

Debt rescheduling - the conditions

Once the responsibilities have been clarified, a decision for or against rescheduling could be made. Similar to any other debt restructuring, the borrower should take his time and compare the offers from several banks. Only in this way will he find an optimal solution for the redemption of a loan, the combination of several loans or the settlement of the overdraft facility in the checking account. In the event of debt rescheduling or early repayment of a loan, the bank could charge prepayment penalties. However, more and more banks are foregoing this today.

If the debt rescheduling is approved, the outstanding loan amount of the old loan is immediately settled. From this point in time, the customer would have to service the new loan agreement and pay the monthly installments in the agreed amount and until the loan is fully repaid. The term is specified in the loan agreement.

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