Credit: who should pay the debts in the event of a divorce?

The life of a couple is a priori a matter of the heart but it is also, whether we like it or not, a matter of money. And the financial question can turn into a nightmare at the time of the breakup. But what does the law say when there are credits to be reimbursed?

Subtle settlement of accounts between spouses

Subtle settlement of accounts between spouses

If the spouses have the vocation to share the possible enrichment (real estate, savings) which may arise from their union, they must also share the debts. Whatever the matrimonial regime, they are solitary, that is to say co-responsible, of these so-called household debts, even if they have been incurred by only one of the spouses. These are ordinary everyday expenses, including food, water bills, electricity, rent, and family housing costs, children’s health costs.

However, if the expenses are manifestly excessive in relation to the couple’s lifestyle, the usefulness or uselessness of the operation, the good or bad faith of the third party contracting party, the solidarity of the spouses does not play, explains the article 220 of the civil code. Ditto for credit purchases and loans, except if they relate to coherent sums taking into account the standard of living of the household and that the expenses thus carried out are necessary for the needs of the everyday.

In other words, if you buy with a consumer credit a stove or a washing machine, your spouse is liable for the repayment of the installments, even without having the quality of the co-borrower. It is logical, these are modest sums necessary for the needs of everyday life. Conversely, if you take out a car loan to finance the high-end car of your dreams, you will not be able to ask your spouse to share the bill for the repayment of the installments. Unless he has the quality of co-borrower or is surety to guarantee your loan.

The result, when a spouse takes a loan alone which is not necessary for the needs of everyday life, he commits only his own property and his income.

Exception to solidarity

Exception to solidarity

Since the Elan law of 2018, solidarity ceases to apply to rents and charges when the spouse, notorious partner or cohabiting partner, leaves the family home due to violence exerted within the couple or on a child. The only condition: inform the lessor by registered letter, with acknowledgment of receipt, accompanied by a copy of the protection order issued by the family judge.

Limits to the protection of an economical spouse

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The rules of article 220 of the civil code aim to protect the virtuous spouse from the behavior of his over-spending spouse. However, this protection is less absolute than it seems. At issue: the legal community.

Married spouses, without having signed a marriage contract before a notary, are subject to the regime of the legal community, which is the case for the great majority of couples. This plan includes all the elements of heritage acquired for valuable consideration after the date of the marriage: car, housing, furnishings, household appliances, wages, savings …

So much for the positive side of the legal community: everything that was acquired during the marriage belongs equally to both spouses and must be split in two at the time of the divorce. Everyone keeps for themselves, on the other hand, the property acquired before the date of marriage as well as that collected during the conjugal life by gift, gift-sharing, inheritance, inheritance …

According to the civil code, the legal community is composed actively and passively. This means that it includes the assets acquired during the marriage (except inheritance and gifts) and the liabilities, i.e. all debts for which the spouses, or only one of them, are indebted.

The result, the household debts, mentioned above, and more generally all of the credits in the process of being reimbursed are included in this common pot. At the time of the divorce, these debts which you may not have always been aware of are therefore charged to the assets of the community.

35,000 dollars credit for self-employed – from 304 dollar rate

Most money houses advertise their products with favorable conditions and a simple application. However, a 35,000 dollar loan for self-employed is not on the billboards.

If you need a loan for self-employed persons of 35,000 USD, you have to provide a large amount of evidence to prove your creditworthiness. Nevertheless, a credit comparison should be made.

How can the examples be interpreted?

How can the examples be interpreted?

Using these few examples, it becomes clear how the interest rate and the term affect the credit rate. If you want a cheap 35000 dollar loan for the self-employed, you should make a loan comparison. The credit comparison from Smava provides all important details about the loan for self-employed 35,000 USD. It is also free and non-binding.

The self-employed must expect a higher interest rate than employees. The interest rate can be lowered with loan collateral. With the 35,000 dollar loan for the self-employed, it is important that free repayments are possible. If the business is going very well and the income is excellent, the loan could be redeemed early. If no special repayments have been agreed, this may result in costs.

As for the term, a long term brings lower credit rates, but the interest rate increases. With a short term, the credit rate increases, but the interest rate drops.

Which loan documents are necessary?

Which loan documents are necessary?

Employees, clerks and civil servants only need salary slips from the past three months to prove their creditworthiness. Sometimes bank statements are also requested. In the case of a 35,000 dollar loan for the self-employed, documents from the past two years must be presented. Entrepreneurs have to provide exact information about earnings based on business evaluations (BWA), profit and loss accounts and often an income tax assessment. The information must be several months ago.

Increase credit opportunities!

Increase credit opportunities!

In order for a loan of 35,000 USD to be granted to the self-employed, banks often require so-called bank collateral. This can be real estate, life insurance or time deposits. Banks like to see it if a 5000 dollar loan for the self-employed is secured with a guarantor or a second borrower (spouse?).

Both people must be solvent. They must also be informed of what happens if there is a loan default. Then these people are liable for the loan. Therefore, the income must be high and secure. Another possibility is that another person takes the 35,000 dollar loan for the self-employed in his name.

If this person has a secure income, good conditions are granted. The loan amount can then be passed on to the self-employed. Of course, everything should be recorded in the contract. The self-employed person’s income must also be high enough that the loan installments can be paid.

Bad credit checker – no money?

Bad credit checker - no money?

Like other borrowers, the self-employed will only receive a self-employed loan of 35,000 USD if the credit checker is clean. The entries are defined by characteristics and soft and hard. If you have a soft characteristic, for example because loan installments have not been paid and the bank has made the loan due, you could still get a 35,000 dollar loan for the self-employed from a suitable provider.

With a hard characteristic, however, there is no longer any credit. An affidavit, seizure or bankruptcy is considered a hard characteristic. A bad credit checker does not have to be the end of all loans. The Internet and the media are full of credit checker-free loans.

However, a secure income is important as a prerequisite for these loans. If loan collateral can be provided, a credit checker-free loan could also work.

Loan for self-employed 35,000 USD – the cost

Loan for self-employed 35,000 USD - the cost

How high the interest rate and the borrowing costs depend on the respective provider. Not only that, the interest rate also depends on the customer’s credit rating. So there are funders who give a 35,000 dollar loan for the self-employed drastically. Others have conditions as for an employee.

Therefore, it should be important to do a loan comparison. The credit comparison from Smava provides all important details about the loan for self-employed 35,000 USD.

Debt in spite of negative Credit bureau

Would you like to reschedule debt and make a fresh start despite a negative Credit bureau? We have summarized information on credit options that make debt restructuring possible despite a negative Credit bureau.

Debt in spite of negative Credit bureau – extent of debt restructuring

Debt in spite of negative Credit bureau - extent of debt restructuring

Debt in spite of negative Credit bureau can be planned on a large scale or only on a small scale. The idea of ‚Äč‚Äčeliminating a small old residual debt often arises when precisely this debt has caused the negative Credit bureau entry. Much can be achieved if the debt can be balanced and noted as done. Three years later, the Credit bureau will finally be clean again.

If the Credit bureau entry is not completed, the choice of loan is clear from the start. It is a loan without Credit bureau, only a foreign bank can grant the loan without Credit bureau. We are looking for the advertising of such a credit bank. However, the advertising of a credit broker who promises to find a Swiss loan without Credit bureau for debt restructuring is found practically without exception. If you would like to save yourself the placement fee, you can submit your loan application directly. As far as is known, there is only one foreign bank that approves legally Credit bureaufree loans to Germans, the choice of provider is easy.

Since 2010, Cream bank from Liechtenstein has been offering a legal loan option for Credit bureau-free loans. Such a loan can be applied for through a reputable credit broker or directly from the provider. As with all credit options with poor credit ratings, securing financing plays an important role. In the case of a Liechtenstein loan, only the labor income is looked at. Guarantors or real assets cannot improve creditworthiness.

Debt with a Credit bureau-free loan

Debt with a Credit bureau-free loan

Debt rescheduling despite a negative Credit bureau with a Liechtenstein loan is only possible for two loan amounts. The loan offer without Credit bureau is limited to USD 3,500 net loan and USD 5,000 net loan amount. Only one loan per applicant is possible. In principle, only employees in dependent employment are qualified for a Credit bureau-free loan. The employment contract must not be limited or terminated and must also have existed for at least one year. Marital status and loan amount play a role in the required income level.

For a credit of 3,500 USD, a single person must prove a net work income of at least 1,130 USD. For a loan of 5,000 USD, it is already 1,600 USD. Both loan amounts are only ever granted in connection with a fixed term of 40 repayment months. Nevertheless, there is the possibility of early loan repayment, but also the credit increase to the original amount. The effective annual interest rates mentioned below always refer to the direct application.

If a debt in the amount of $ 3,500 is to be rescheduled, an effective annual interest rate of 11.62 percent will be charged. The interest rate includes the processing costs and the debit interest. External costs cannot be recorded. Third-party costs can arise through a credit broker, the cash payment, postage costs and the costs for the certification of the transfer of income. Under the same conditions, the annual percentage rate for a loan of 5,000 USD is 11.61 percent.

Debt in spite of Credit bureau – domestic financing

Debt in spite of Credit bureau - domestic financing

A comprehensive debt restructuring, the merging of various liabilities, is usually not possible via a foreign loan. The loan amounts offered are simply too small for this. Rescheduling despite a negative Credit bureau is possible, even with a larger loan volume, via a domestic loan. However, the negative Credit bureau entry must be marked as done. Two financing options are available for debt rescheduling. A bank loan or a private loan would be possible.

If debt restructuring is not possible despite a negative Credit bureau through private donors, then the only option left is to try a loan from a specialist provider. Credit brokers know various credit banks that also allow a loan despite Credit bureau. The extra loan from Agree bank is particularly recommended for debt rescheduling. Again, the credit attempt can be made directly or through an intermediary.

The flexibility of an extra loan for debt restructuring is particularly appealing. Interest rates, however, are very sobering. Debt in spite of negative Credit bureau costs with the extra loan, regardless of the amount and term, 11.95 percent APR. Only a calculator or debt counseling can answer whether a debt restructuring still pays off.

Real estate loan: the clauses to be negotiated for early repayment

When borrowers negotiate their mortgage, they focus primarily on the interest rate, possibly on loan insurance or even the bank guarantee, but rarely on small clauses of the contract. Wrong! Among the clauses to be negotiated: the conditions for early repayment.

Resale, increase in income, inheritance, unexpected large sum of money Many events can encourage to realize an early repayment of the mortgage, total or partial. But these events seem far away when signing the loan offer. However, it is at the time of the credit request that the prepayment conditions, more or less advantageous depending on the contracts, can be negotiated.

A threshold of 10% of the initial amount of the loan

A threshold of 10% of the initial amount of the loan

The Consumer Code sets two major barriers, which banks cannot exceed, for the terms of prepayment. The first: The loan contract may prohibit repayments equal to or less than 10% of the initial amount of the loan, except in the case of its balance.

This threshold is not negligible. If a bank indicates this maximum percentage in the contract, for a mortgage of 200,000 dollars, early repayment is only possible if it is greater than 20,000 dollars. Unless there are less than 20,000 dollars to reimburse. And this amount remains frozen for the duration of the loan!

What you can negotiate

It is up to you to check the minimum amount requested in the future loan offer, asking for details from the banker or broker if you have not yet read the general conditions. If the legal threshold of 10% is indicated, an attempt should be made to lower it.

It is entirely possible to deviate from this 10% limit, provided that this is entered in the contract: you can claim a minimum threshold equivalent to 2 or 3 monthly reimbursements, for example. This threshold can be expressed in amount or in a number of monthly payments.

Indemnities corresponding to 6 months of interest

Indemnities corresponding to 6 months of interest

The other barrier set by the regulations concerns the maximum amount of the early redemption indemnities (IRA). Indeed, if you wish to pay all or part of the capital that you owe to the bank, the latter may require IRAs, provided that they are stipulated in the contract. The Consumer Code sets a double limit. The amount of compensation must not exceed:

  • nor to a semester of interest on the principal repaid at the average rate of the loan;
  • nor 3% of the capital remaining before the reimbursement.

It is, therefore, the lower of these two thresholds that apply. In the current context of floor rates, the limit of 3% of capital has lapsed: the 6 months of interest are today systematically lower. And they thus constitute the legal limit of penalties. For recent real estate loans, the maximum prepayment indemnity, therefore, corresponds to six months of interest on the amount repaid (not to be confused with six monthly payments).

For example, for a loan of 200,000 dollars at 1.20% over 20 years contracted in 2019. The borrowers wish to repay the entirety of their credit after 4 years (in 2023). The remaining capital is then $ 163,743.

The early repayment indemnities amount to a maximum of 982 dollars or 6 months of interest on the amount reimbursed at the annual rate of 1.20% (i.e. 163743 1.20% 6 12). By way of comparison, by applying the alternative limit of the 3% of capital remaining, the compensation would be 4912 dollars: a threshold five times higher, and which therefore not apply.

Example made using our loan calculators

Real estate loans are currently being negotiated with rates at record levels, at the lowest: 0.96% over 15 years, 1.14% over 20 years and 1.37% over 25 years according to the observatory. Housing Credit-CSA. In these conditions, as shown in the simulation above, the IRAs approach the maximum 1000 dollars in many cases: it was double 3 or 4 years ago, triple or even quadruple several years Be back!

On the other hand, these penalties are mechanically higher for borrowers with a worse record. For example, by borrowing 250,000 dollars at 2% over 25 years, the maximum amount of IRAs will be 2,179 dollars after 4 years.

What you can negotiate

Difficult to obtain the complete abolition of IRAs: banks rarely agree to exonerate their borrowers from penalties in the event of repurchase of the credit by the competition. On the other hand, you can try to limit their field of application: no IRA after a certain period (10 years for example), no compensation in the event of total reimbursement following a sale, total absence of penalties except in the event of redemption at low rates, we have fewer requests for exemption from IRA, says Philippe Taboret, deputy general manager of E-Money. But if the borrower seeks to negotiate on this point, the bank may derogate from the thresholds provided by law. The most common exemption is the absence of an IRA in the event of the resale of the property.

To know: for loans concluded since June 1999, the law also provides that no compensation is due in the event of a sale (and therefore total prepayment) following an imponderable. No IRA, therefore, in the event of a sale following professional mobility, a death or a forced cessation of the professional activity of the borrower or the spouse.

 

Take a loan – almost anyone can

Loan companies and banks from all almost possible sides bombard us with information about how a favorable loan offer can be obtained right now and from them. At first glance, advertising slogans are very encouraging and can tempt even those who do not need so much cash injection.

When you take out a loan, you need to be really careful about what and how you plan to sign and commit to. Once inaccurately analyzed loan agreement or misunderstanding the basic concepts can really cost us dearly … Because, unfortunately, despite the fact that loan companies and banks boast that cash is waiting for us immediately to receive it, and so we will have to pay it back – the only question is price. It is worth letting us decide about the conclusion of the loan agreement and be aware of the terminology used for these loans.

Loan agreement – no foreign words dictionary, don’t move

Loan agreement - no foreign words dictionary, don

We will try to bring several situations in which we may feel uncomfortable when applying for a loan. To simplify our understanding of the context, we provide specific examples of what might happen to us when applying for a loan. Well, at the beginning we submit an application and the question is asked whether we do not want to use the grace period? Of which? Well, grace is a deferment of the first installment – in the case of loans it is usually up to three months, and banks usually do not charge any additional fees for using this option.

This option is usually not available in the case of loan companies, because the loans granted there have a much shorter repayment period. So by concluding the contract now and using immediately the funds borrowed from the bank, we will pay the first installment even for a quarter! We are inquisitive so we ask how we should pay the installments and in what amount – we get the answer that the repayment formula is annuitet and in accordance with our expectations, self-repayment will take place on the 28th of each month in the set amount . What does this mean in turn? Explaining these terms is equally simple – annuitet is simply repayment in equal principal and interest installments, which means that apart from the first and last equalizing all other installments we will pay in the same amount, which will simplify the planning of repayment service for us.

Here, too, we have a simpler model for loan companies – all installments are the same for the borrower’s convenience. And self-repayment is nothing more than automatically charging an installment from the available funds from our bank account in order to avoid forgetting to settle the liability or its amount. Another concept we may come across while servicing our commitment is prolongation – how do you understand this term in turn? It is simply the possibility in the world to extend the repayment of our liability, ie spread the payment over a larger number of installments, thanks to which our monthly obligations will be lighter, ie simply smaller installments to be paid to the bank. Generally speaking, this option is rare in the case of loan companies – a new contract is more often used. Less pleasant terminology, the meaning of which is also good, so that we know, is the issue of prompts, ie requests for payment, which the bank can send us if we do not meet our loan repayment obligations.

However, not so complicated!

However, not so complicated!

Using the hints contained in our study, the issue of terminology used by loan companies and banks in the case of loan agreements should not give us much reason to worry. Often, the terms quite simple in meaning have their professional or legal nomenclature, which someone who is not professionally related to finance can understand as complicated and incomprehensible, and in fact they are very simple.

Loan despite negative Credit bureau and education

Are you looking for a loan despite a negative Credit bureau in training? Then we have put together an overview for you of which credit opportunities exist and which loan offers are unsuitable.

Credit despite negative education and training – what’s not possible?

Credit despite negative education and training - what

If trainees are looking for a loan without Credit bureau, the negative Credit bureau entry is often due to a cell phone contract. The bill was finally paid, only the Credit bureau entry remained. Actually the best conditions for getting a loan from a foreign bank. Unfortunately, it’s not quite that simple.

A loan for trainees as a loan without Credit bureau from a foreign bank is definitely impossible. A look at advertising promises a lot. Even advertising with no credit rating or no income is mentioned. The fact is, only a credit bank currently offers the loan without Credit bureau legally in Germany. It requires an unlimited employment relationship and, for single people, a net work income of at least 1,130 USD.

A trainee cannot meet both requirements. The training contract is always limited in time and ends with the successfully passed examination. An ordinary trainee earns less than half of the required income.

Which government credit options are opening up?

Which government credit options are opening up?

When it comes to the question of which loan can be possible despite a negative education and training, the purpose is decisive. If the loan is required as part of the training, an educational loan from the Federal Administrative Office can be applied for. The negative Credit bureau alone is not a reason for rejecting the state educational loan. Only insolvency proceedings (private bankruptcy for debt relief) must not have been initiated.

The educational loan would, for example, be eligible for professional goals, such as beauticians or educators. However, not every profession is equally funded from the outset by the educational loan. For training as a beautician – you can receive funding right from the start. Vocational training as an educator – only from the 13th month.

Credit opportunities despite Credit bureau in training – no purpose limitation

Credit opportunities despite Credit bureau in training - no purpose limitation

Ordinary training salary hardly enables you to actually repay a loan. The existing negative Credit bureau entry is the best proof that the ability to repay is only very limited with the training salary. Nevertheless, trainees still want to find a way to implement wishes in this situation. A typical example is the vacation trip.

The trip could be paid for with the additional vacation allowance. Unfortunately, this money is only paid out after the holiday has been settled. If you still want to go on vacation with this money, you can ask for an advance at the payroll office. As a rule, trainees are granted such a credit despite a negative Credit bureau in their training.

Another loan option is usually the loan from private donors. With the training salary, however, access to the large portals is already questionable in the event of a negative Credit bureau entry. The currently largest provider is best bank. In order to be able to publish a loan request on the portal, however, at least a scoring value of H is required.

With a normal income, this scoring value can be achieved despite having completed a Credit bureau entry. For the loan, despite the negative Credit bureau in training, it is very questionable whether the value will be reached.

How much to borrow with a salary of 2000 dollars?

A borrower can devote up to 660 dollars each month to repay monthly payments as part of a real estate project.

The amount of salary is important in a mortgage loan application because it will determine the feasibility of financing. The bank will be able to calculate the borrower’s debt based on the threshold of 33% of the amount of income.

Borrow with 2000 dollars net of salary

bank

In other words, a borrower receiving a monthly net salary of 2000 dollars can repay up to 660 dollars in monthly payments. This limit is applied as well for a single credit as for several at the same time, the totality of the installments must not exceed this amount.

If a borrower wishes to obtain a mortgage, the bank will, therefore, take into account the existing monthly payments to estimate its capacity to borrow. If the latter has no outstanding credit, he can devote up to a total of 660 dollars to repaying a mortgage.

Obviously, it is not only a question of having a salary of 2,000 dollars net to obtain a mortgage. Certain requirements must also be met, such as the nature of the contract, which must be a permanent contract or an equivalent position such as that of a permanent official.

The bank will also study the statements of accounts to define the expenses of the household and estimate the remainder to live, it is the remaining sum on the account after deduction of all the recurrent expenses. This allows us to give a favorable opinion or not to the request for a mortgage.

Table of gross sums with 2000 dollars of wages

Table of gross sums with 2000 dollars of wages

Here are the gross amounts, without taking into account the fees and interest rates, that a borrower can obtain with a maximum debt of 33% and without outstanding loans:

  • 5 years (60 months): $ 39,600
  • 10 years (120 months): $ 79,200
  • 12 years (144 months): $ 95,040
  • 15 years (180 months): $ 118,800
  • 20 years (240 months): $ 158,400
  • 25 years (300 months): $ 198,000
  • 30 years (360 months): $ 237,600
  • 35 years (420 months): $ 277,200

Simulate the mortgage with an income of 2000 dollars

Simulate the mortgage with an income of 2000 dollars

If the ability to borrow makes it possible to give an indication of the amount that can be obtained taking into account his personal and professional situation, the latter does not take into account the interest requested by the bank or the costs of setting up the home loan.

It is therefore important to simulate a mortgage request by providing all the necessary details about your project and its situation, this allows you to quickly obtain a financing estimate and take account of the conditions of the banks. It will be possible to obtain a proposal with the interest rate (APR), the repayment duration and the final monthly payment.

It is also important to note that most financing proposals do not take into account borrower insurance, optional but essential cover to obtain the release of funds from the bank. All these elements will be estimated in the online simulation, which is mostly free and without any commitment.

Credit, debt … Defeat the traps of collection companies

You may have been approached by an amicable debt collection company following an unpaid telephone, electricity, premium or premium invoice insurance, the arrears of unpaid bank credit, or any other amount that you owe and that you have not paid.

But it is clear that according to several surveys by the Directorate-General for Competition, Consumption and the Suppression of Fraud (DGCCRF) that certain collection companies resort to abusive practices, even aggressive, take undue charges, sometimes use means of pressure and intimidation. What you need to know not to be tricked.

Rules to respect

Rules to respect

A company responsible for amicable collection can act only after having concluded an agreement with the creditor which gives him the power to collect sums on behalf of the latter.

The agreement concluded between the collection company and the creditor must include four mentions: the basis and the amount of the sums due, with the indication of the different elements of the claim; the conditions and conditions of his professional civil liability insurance; the conditions of remuneration payable by the creditor; the conditions for repayment of funds collected on behalf of the creditor.

In the letter which it addresses to the debtor, i.e. the person who owes money, the company responsible for the amicable recovery has the obligation to indicate it, under penalty of To a fine of at least 1,500 dollars, a series of mentions (article R124-4 of the Code of Civil Procedure for Execution) to his name, address or head office and the indication that it carries out an amicable collection activity; the name and address of his client, i.e. the body responsible for collecting the unpaid debt; the basis and amount of the amount claimed, clearly distinguishing the debt itself, and any interest or any other sum claimed in addition; payment methods (check, bank card, money order …). In case of doubt, the collection company must prove that it actually sent you a letter containing all of the mandatory information.

A supervised profession

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Depending on the regulations, natural or legal persons may be responsible for the amicable recovery of debts. They must, before any activity begins, address to the public prosecutor attached to the court of the place of their head office (article R 124-2 of the Code of Civil Procedure ) Justification of the subscription to a professional civil liability insurance contract. They also have the obligation to justify the opening of a bank account used exclusively for the reception of sums collected for creditors.

Collection costs prohibited

Collection costs prohibited

Can the collection company claim a higher amount from you than you owe? In other words, can she make you pay the cost of her intervention? No, the law prohibits it (article L121-21 of the Consumer Code and article L111-8 of the Code of Civil Execution Procedures), unless otherwise decided by a judge.

Besides, the collection company must inform you of this prohibition in principle by reproducing, on the letter it sends you, part of the provisions of article L111-8 of the Code of Civil Procedures of execution. The text to appear on the letter is as follows The costs of recovery undertaken without enforceable title remain the responsibility of the creditor unless they relate to an act the performance of which is prescribed by law in fancier.

Any contrary stipulation is deemed unwritten unless otherwise provided by law. However, the creditor who justifies the necessary character of the steps taken to recover his debt may ask the execution judge to leave all or part of the costs thus exposed to the charge of the bad faith debtor.