Division of property obligations of spouses during divorce

According to the Family Code of Ukraine (Family Code) of Ukraine, the joint property of spouses during the division in the process of divorce must be divided equally (with some exceptions). Theoretically, debts and obligations are subject to distribution in proportion to the property received by the former spouses. In practice, the division of financial obligations, which also provides for difficulties.

If a citizen takes on an obligation, he must pay it off. In marriage, everything is different: the debts of one of the spouses, acquired with the consent of the other, are considered common.
Unilateral refusal to fulfill common obligations is unacceptable.
If the spouses jointly used benefits obtained through a loan or credit, then the acquired obligations will have to be paid off jointly even after a divorce.
The rules of law on the division of joint obligations apply to officially registered marriage. In the event of separation, common-law spouses should agree on the distribution or divide everything through the court in proportion to the invested funds. The latter requires irrefutable evidence.

The division of obligations is not automatic. To start the process, the interested man files a lawsuit or approaches his ex-second half with an offer to sign an agreement.

Family lawyer

Skryabina Darya Sergeevna

Candidate of Law

Hello! In this article I will tell you about the division of property obligations of spouses during divorce, which property obligations of spouses are subject to division during divorce, the responsibility of spouses for property general and personal obligations, the division of debt obligations of spouses during divorce.

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What property obligations of spouses are subject to division during divorce?

When dividing obligations after a divorce, the key question is: “Were the funds received by either spouse used for the benefit of the family?” If the answer is yes, even if other requirements are violated (for example, the other spouse was not notified before receiving a loan first), the court will most likely order a division of obligations.

If one of the spouses took out a loan before marriage but continued to pay it off during their marriage, the obligations are not subject to division. However, the other spouse has the right to claim compensation for part of the money paid during the marriage (unless otherwise provided by the marriage contract).
Property and obligations acquired by him after the spouses stopped living together and jointly managing the budget are considered common and are subject to division in equal proportions. The opposite can be achieved through legal proceedings.
In the event of a divorce, it is obligatory to notify the bank or other financial institution to which one of the spouses has obligations about the changes that have occurred in the family.

Example

The Vyborg District Court of St. Petersburg refused to recognize the debt for rent for a studio apartment that had accumulated for one of the spouses as a common obligation acquired during the marriage. The basis was that the husband had incurred the debt at a time when he and his wife no longer had a common budget, although they were still officially married.

Liability of spouses for property general and personal obligations

Debts, like property, can also be general or personal. Spouses, including former spouses, are liable for obligations that they have jointly assumed, or that one family member has accepted with the consent of the other. But only on condition that the circumstances that led to the emergence of obligations concerned the interests of both spouses.

Debts related to jointly purchased property (real estate) and other agreements, or those arising as a result of harm caused to third parties by spouses or their children, will be considered common.

Obligations related separately to the personality of the husband or wife are not divided:

compensation for damage caused by one of them;
alimony;
debts arising from the desire of one of them to satisfy their own needs;
debts that appeared during marriage.

Personal debts of one of the spouses are reimbursed from his personal property or the part allocated to him during the divorce. Only if it is not enough, common property can be used to pay off the debt.

Similarly to common obligations: they are fulfilled from common property, and if this is not enough, then from the personal property of each of the spouses.

Example

A loan taken by one of the spouses for their own needs, without the consent of the spouse or with the indication of false information, will be considered their personal obligation. Such debt is not subject to distribution. However, in practice, it is very difficult to prove ignorance, since it is necessary to prove that the family does not actually live together, the spouses do not communicate with each other.

Division of credit obligations during division of property of spouses

Most often, when applying for loans, one of the spouses acts as a borrower, the other as a guarantor, or gives written consent for the family to issue funds. During the division of obligations through a judicial body, judges will not agree that the family loan should be paid exclusively by the spouses whose last name is on the loan agreement.

The termination of a marriage is not a reason for the termination of credit obligations. A person has the right to count on the help of the other half not only during the marriage, but also after its termination.
Credit obligations are divided between the former spouses, provided that they jointly own and use the property. If one of the spouses wants to receive the thing taken on credit alone, he or she must also take on the remainder of the debt (except in cases where otherwise is stipulated in a voluntary agreement).
At the same time, obligations for the remainder of the loan principal and interest are divided.

Division of debt obligations of spouses during divorce

The obligation to repay loans is divided between former spouses according to the same rules as the debt on a loan. A loan is money borrowed from an individual or organization, but not a bank.

After a divorce, the husband and wife are obliged to participate in equal payment of the loan if it was used to ensure the well-being of the family (including the treatment of one of its members).
The subject of the obligations under the loan agreement is the payment of its principal and only sometimes interest (if the money is provided by a pawnshop). At the same time, a loan differs from a credit: the latter always pays interest.

If the money is borrowed from friends or relatives, it is better for all parties to agree and make a deal. It should indicate who, in what amount and with what frequency will pay off the debt.

Division of a mortgage in the event of divorce

There are two options for concluding a mortgage loan agreement between spouses. In the first case, both act as co-borrowers; in the second case, one signs the document and the other gives consent. The schemes for dividing obligations may be different; they depend on the goodwill of the bank.

Borrowers can share the mortgage debt. The bank changes the terms of the agreement by concluding an additional agreement. Joint and several liability is imposed in parts on each of the former spouses. Banks do not always agree to this option: they do not want to miss the opportunity to collect the debt from any of the borrowers if the other cannot pay. The financial institution has the right to share the debt, but is not obliged to do so.
The former spouses, by mutual consent, can ask to re-register the agreement to one of them. The second is deprived of the obligation to pay the loan, but also of the right to claim the housing.
Another option is to sell the mortgaged housing with the consent of the mortgagee (the bank) with the division of the funds received. The issue of distributing obligations disappears.
During the process of registering a mortgage, the bank may require that the spouses enter into a prenuptial agreement indicating the payer and recipient of the apartment in case of divorce. This option is not just a way to provide for the development of events, but a very weighty argument in distributing the debt.

Division of property obligations under maternity capital

The obligations under the maternal capital (MC) are intended to protect children’s property rights. They arise if the funds under the certificate were invested in the purchase of real estate. The recipient of the capital or the owner of the housing is obliged to register the living space as the joint property of the family (wife and children).

Divorce does not relieve the recipient of the capital of the obligation to register the housing equally among all the broken family members, including children, i.e. at least four people. An agreement between the spouses may establish a different division procedure. It is important that the rights of the children are infringed.
According to the Law on Maternal Capital (from 2006), the owner of the housing or certificate is obliged to register the apartment/house as joint property no later than six months after the transfer of the MC or the registration of the cadastral passport (an event that will occur later).
In the event of a divorce, both parents must pay the remaining debt on the mortgage or other loan equally (or by agreement). That is, each of the spouses receives a maximum of 1/4 of the apartment, and is obliged to pay half.

Agreement on the division of property obligations in case of divorce

The ideal option for dividing obligations is a voluntary agreement between spouses regulating the division of property and debts. Both husband and wife must agree with every point specified in the document.

The agreement can be made at any stage of the divorce process, even after going to court. The judges must be notified of the signed document.
The agreement does not need to be notarized (although this option is not excluded). At the same time, it is a document that is recognized by law on an equal basis with a court decision.
The division of property and obligations (or one of them) into shares by agreement can be formalized by spouses even while married.

State Customs in the division of property obligations during divorce

The common debts of spouses during the division in court are subject to a fee in the same way as would happen with common property in its physical form. According to the Law of Ukraine on Court Fees, the state fee is calculated proportionally to the amount of the claim.

State duty is mandatory when applying for services provided by government organizations, including courts. It is paid before applying to the judicial authority by the spouse who is the plaintiff.
The minimum amount of state duty is UAH, the maximum is UAH thousand. Intermediate values are determined as a percentage of the amount of the monetary obligation.
There is no state duty for signing an agreement. It is charged only if it is necessary to certify the agreement document with a notary.
If a claim for the distribution of debt (property) is filed as one package with a claim for divorce (non-property), in this case the duty is paid as two separate claims. That is, UAH, as for a non-property claim, plus an amount equal to a percentage of the amount of the debt obligation.

Division of common property obligations in divorce

After a divorce, spouses share only common obligations, but not personal ones.
By default, equal division of debts is provided, unless otherwise provided by the agreement or established by the court.
Divorce does not lead to the termination of obligations for the used maternity capital.
A fee is paid for the trial of the case on the distribution of marital debts.
The best option for dividing obligations is to conclude a voluntary agreement between the former spouses.

What property obligations are subject to division during divorce?

Is it possible to change the terms of a loan agreement after a divorce?

How to take into account debts for utility payments when dividing obligations?

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