When spouses decide to initiate divorce proceedings by mutual consent and they have one or more credits in common, it is necessary that they decide the fate of outstanding before entering the court. Credit consolidation can be an option.
Divorce by mutual consent: what is it?
Known for its speed and reduced fees compared to other types of divorce, divorce by mutual consent is mainly conditional on the agreement between the spouses. It is a divorce in which the spouses agree on the breakdown of marriage and its consequences. In other words, the spouses draw up an agreement with their lawyer that clearly defines all the details of life after the divorce. These details include: the use of the woman’s name, the residence of the children, the allocation of housing purchased together, the right of access, alimony, but especially the distribution of the credits contracted together.
The details of the convention must be fair to both parties. Thus the family court judge is responsible for verifying and validating the agreement. Divorce by mutual consent often involves sharing all movable and immovable property. They may decide to sell the property or one spouse decides to buy the other’s share. This is called the buyout of cash and this often involves significant funding.
Credit consolidation and balance financing
According to Article 230 of the Civil Code, spouses must establish an agreement defining all consequences of divorce. Thus, they must regulate the allocation of housing and in particular the payment of a balance. In other words the spouse who is granted full ownership of the property, must buy back the share of his ex-spouse which involves the payment of a balance. He must also take charge of the real estate loan contracted together for the acquisition of the real estate. A compensatory capital amount may also be claimed from the spouse who becomes sole owner for compensation. However, when these financings are accompanied by a need for financial reorganization, a loan consolidation project can be considered.
This banking operation makes it possible to group several credits in progress in one, a new allocated funding can be associated, all in a single low monthly payment and adapted to the finances of the borrower (lengthening of the repayment period and possible increase of the cost total credit). In other words, balance funding can be integrated into a loan consolidation project. An option that can facilitate the proceedings before the judge who homologates and validates the agreement.