💰 Family finances · #65
We have a joint home or car loan. What happens to the debt after divorce?
Divorce does not end the contract with the bank: both borrowers remain liable to the bank until the loan is settled or transferred, even when the court divides the assets between the couple.
Allah commands that debts be paid and recorded (al-Baqarah 2:282), and Act 303 s.122 provides that the court, when dividing jointly acquired property, takes into account debts contracted for joint benefit. Common options: one party takes over the asset and the loan by refinancing in their own name; the asset is sold and the balance divided; or payments continue as the court orders. Meanwhile, make sure the instalments keep being paid so neither party is blacklisted. Include the loan details in the jointly acquired property claim and get advice from a Syariah lawyer. See Jointly acquired property.
Allah commands that debts be paid and recorded (al-Baqarah 2:282), and Act 303 s.122 provides that the court, when dividing jointly acquired property, takes into account debts contracted for joint benefit. Common options: one party takes over the asset and the loan by refinancing in their own name; the asset is sold and the balance divided; or payments continue as the court orders. Meanwhile, make sure the instalments keep being paid so neither party is blacklisted. Include the loan details in the jointly acquired property claim and get advice from a Syariah lawyer. See Jointly acquired property.