Should you and your partner share? Then it might be a good idea to read a little about what happens to personal finances in the event of a separation or divorce, so that you give yourself the best possible conditions for the next phase of life. Sometimes life takes unexpected turns. You fall in love, move in together – and a few years later you may decide to separate. In connection with this, some changes take place in your personal finances.
If you live together, you will have to make a property division. This means that you divide the property that has been purchased for joint use. If you are married, assets that you owned before marriage are also covered. We will come to how you solve joint loans a little later. If you are cohabiting, we recommend that you read up on the cohabitation act to get a full understanding of what applies in your case. In connection with separation or divorce, you should write a property division agreement. Otherwise, there is a risk that one of you will demand division of property afterwards.
Alternatives for loans in case of separation
If you and your partner have taken joint loans, for example for a car, you need to agree on how best to handle it after the separation. The alternatives can be boiled down to the following three: many people want to cut ties with their ex-partner, but the best option is to continue standing jointly on the loan until you sell the car. If you split the loan, you will have to apply for a separate loan. A new credit check is then carried out. The risk is high that you will not get a better interest rate, and in some cases only one of you will get your application through.
One of you takes over the entire loan. The bank will do a new credit check on the person who wants to take over the loan. So it cannot be said that this is a possible solution for all couples. Sell ??the car immediately and pay off the loan. This, like option 1, is a way to avoid starting the annuity process over, which happens if the loan is divided. This means that the distribution of interest and amortization is recalculated, without changing the term. The result is a different monthly cost with the same amortization rate. The same rules also apply to other property that you have taken out a loan to pay for, for example a home or a boat.
What happens after the separation?
A separation or divorce naturally means changes in your personal finances even after the property division is complete. We recommend that you look over your expenses, to get an idea of ??what needs to be adjusted in the budget going forward. If you have many private loans, you can consolidate these with collector bank to get better terms and lower monthly costs. This can make a big difference for you who are newly separated.