Finally, the big day has arrived: you are going to marry the love of your life and a wonderful honeymoon in the Maldives awaits you after the ceremony. But don’t dodge difficult conversations before you take the plunge: what about the debts incurred by your spouse? Who will take care of them? And in the event of divorce, how does disassociation work and is it possible in my case? We sheds some light on this thorny issue of personal finances.
What is decoupling?
By definition, uncoupling means breaking the bonds of solidarity between people. Applied to the banking sector, the term “deconsolidation” is associated with the separation of debts, which is the term used in UK law, as long as the terms to be.
Decoupling depends on the type of debt
In reality, it all depends on your matrimonial regime and the date on which the loans in question were taken out. Your rights and obligations and those of your spouses in connection with a loan depend entirely on these two elements.
There are two types of debt: joint debt and private debt. Most people are married under the default legal regime, which is the legal regime of community. The latter separates the patrimony into three parts: the patrimony of one spouse, the patrimony of the other spouse, and finally, the common patrimony. Note here that this separation also applies to persons declared as de jure or de facto cohabitants.
Here both spouses are responsible for expenses and debts incurred during the marriage or during the cohabitation, the debt is therefore said to be joint. The debt is the responsibility of both parties, whether it is a credit contracted jointly or not. Thus, not only debts contracted by both spouses together, but also credits that are contracted by one or the other separately but in the interest of the family and the household are included in the common patrimony. In such cases, the creditor may turn against any of the spouses for repayment, and no dissociation strictly speaking is possible.
Parallel to this are the so-called personal debts, which belong to only one of the spouses. They can take the following forms:
- Debts built up before the marriage
- Debts arising from an inheritance or a gift to one of the spouses
- Debts contracted by one of the spouses for their own needs
- Debts resulting from a criminal conviction
These debts can in principle only be linked to the person who created them and therefore do not form part of the common assets. In the event of divorce, there is no dissociation since the holder of the debt is the spouse who contracted it. For any other type of debt generated for the purpose of providing for the needs of the household, it is the responsibility of both parties to repay them, since under the legal regime of community, separation of debts does not apply.
What are the exceptions?
When you have given up the legal matrimonial regime for a marriage contract, cases may differ and a disassociation or separation of debts may be possible. If you are married under the regime of separation of property, each spouse remains the owner of his or her own debts and property. Creditors can only exercise recourse against the spouse to whom they are contractually bound. Only if a credit has been signed by both spouses are they jointly and severally liable. A small flat: under this matrimonial regime, financial institutions will tend to require the spouse to provide a guarantee in order to grant the credit, which is then linked to the debt in the same manner as the person responsible for the debt in question.
On the other hand, under the legal regime of community, if one of the spouses would have guaranteed a loan without the explicit authorization of his or her spouse, the debt remains his or her responsibility and de facto decoupling applies.
For more information, do not hesitate to consult our article “The consequences of a divorce on your current loans”, which will tell you more about the different forms of marriage contracts and the associated rules.
It is therefore clear that when you are planning to get married, it is essential to have an open discussion with your spouse about the debts. This will allow you to think together about a solution that suits both of you. If you (together) want to take out a loan, don’t hesitate to compare financial institutions to find the financial product that suits you best.