Who Pays the Loan After Divorce?

Divorce is always stressful, and the financial side of the situation often makes it even more difficult. And while shared property is generally divided equally between spouses, credit obligations are much more complicated. I have heard many stories where, after a divorce, a person suddenly discovered debts they had never taken on or faced demands from a bank even though they had long had nothing to do with the borrowed money. Let’s look at how to go through this process in a civilised way without destroying your budget or being left alone with someone else’s debts.

The question of whether loans are divided in a divorce is one of the first to arise when a couple separates. The answer depends on whether the court recognises the debts as joint. According to the Family Code of Ukraine, property acquired during marriage is jointly owned by the spouses. The same applies to joint debts — obligations that arose in the interests of the family.

I always emphasise that simply taking out a loan during the marriage does not automatically make it a joint debt. Courts generally assess whether the funds were used in the interests of the family and whether the other spouse knew about the loan. If the funds were used to purchase a family car, renovate an apartment or pay for the children’s education, this is a classic example of a joint obligation. If, however, the loan was spent on a personal hobby, a trip without the partner or business debts from an enterprise that did not generate income for the family, that is a different situation.

To make it clear which debts you may still be responsible for after a divorce, I would highlight three key characteristics of a joint credit obligation:

1. Consent of both spouses. The simplest case is when both spouses sign the loan agreement as co-borrowers. Separate written consent from the other spouse is not always required. A court may take into account whether the other spouse was actually aware of the loan and whether the funds were used for family needs. If one spouse took out a loan with the other spouse’s consent and the funds were spent in the interests of the family, the debt may also be recognised as joint. For example, a loan was taken out to renovate an apartment or buy a car, and the partner knew about it and supported the decision.
2. Use for family needs. The purpose for which the funds were used is often decisive. If the money was spent on food, medical treatment, children’s education, home renovation, household appliances or other expenses related to running the household together, the loan is generally considered a joint obligation of the spouses.
3. Benefit to the family. Even if only one spouse took out the loan, a court may recognise it as joint if the entire family actually benefited from it. For example, the loan was used to buy furniture, a car, a holiday or other property used by both spouses. In such a case, the fact that only one person signed the agreement does not mean that only that person will be responsible for the debt.

Now for the good news: not all debts have to be divided. I recommend remembering these situations:

1. A loan taken out before marriage. As a general rule, anything you borrowed before officially getting married remains your personal debt. Even if part of the loan was repaid during the marriage, the fact that the agreement was concluded before the wedding is a strong argument that the obligation should not be divided.
2. No consent from the other spouse. If one spouse did not know about the loan and did not consent to it, and the borrowed funds were not used for family needs, the debt should not automatically be considered joint. However, in the event of a dispute, you will need evidence to support your position: bank statements, documents showing income and expenses, correspondence or witness testimony.
3. Personal purposes. A loan taken out to satisfy the personal needs of one spouse is generally not subject to division. For example, if the money was spent on an expensive hobby, gifts to third parties, the borrower’s own business or other purposes that did not benefit the family, the person who took out the loan will be responsible for the debt.

Surety is a separate issue. If one spouse acted as a guarantor for their partner’s loan, the other spouse’s liability does not disappear after the divorce. The bank may demand payment from the guarantor if the main borrower stops making payments, regardless of their marital status.

Here I want to address situations where a loan is taken out by a close relative rather than directly by one of the spouses. A typical question is: “If my son took out a loan, do the parents have to pay it?”

The answer is clear: no, unless the parents are guarantors or co-borrowers. Parents are not financially responsible for the debts of their adult children, just as they are not responsible for the debts of brothers or sisters. However, there are cases where debt collectors put pressure specifically on relatives, hoping they are unaware of their rights. That is why it is important to know your rights: without guarantor or co-borrower status, a relative is not responsible for someone else’s debt.

If you voluntarily want to help your child repay a debt, you can do so through refinancing or partial repayment, but this is your personal decision, not an obligation.

One of the most unpleasant surprises is discovering debts only after a divorce. That is why I recommend checking your partner’s credit history in advance if you have concerns. Here is how you can check whether your husband or wife has loans:

• Ukrainian Bureau of Credit Histories (UBKI). Every citizen has the right to receive their own credit report free of charge once a year on ubki.ua. Unfortunately, you cannot obtain information about your partner without their consent — this is confidential information. However, you can discuss it openly and ask them to show you their report.
• The NBU Credit Register contains information about borrowers’ credit obligations submitted by banks to the National Bank. You can obtain information about yourself by contacting the NBU or through the bank that services you. You can access your information through bank.gov.ua or the Дія app.
• Court registers and the Unified Register of Debtors. If the matter has reached court or enforcement proceedings, you can check your partner through the Unified Register of Debtors, which is available online free of charge.

Let’s clarify the terminology. Debt obligations are legally established duties of one party (the debtor) to pay another party (the creditor) a certain amount of money or transfer property. In our context, these primarily include loan agreements, written acknowledgements of debt and private loans.

Within a marriage, debt obligations can have different forms. Here are the main types you may encounter:

Surety is not a “joint debt of the spouses” but a separate contractual obligation of the guarantor to the bank. It does not end after divorce.

After debts have been divided, there may be a need to restructure loans so that each person pays only their own obligations. In such cases, refinancing may be useful — replacing an old loan with a new one, often on different terms. At the same time, I recommend not rushing into a decision. If you are only considering this option, it is worth first understanding how to choose a favourable refinancing programme and what to look for when comparing offers from different banks.

What makes refinancing a loan risky in this situation:

1. Higher total repayment. A new loan may be arranged for a longer term with an attractive monthly payment, but in the end you may pay more in interest.
2. Loss of favourable terms. If the previous agreement included a reduced interest rate, cashback or other benefits, the new loan may be less favourable.
3. Hidden fees. Always check the total cost of the loan. Some institutions charge fees for issuing the loan, insurance or account servicing, which can eliminate any potential savings.
4. The need for a new collateral valuation. If it is a mortgage or another secured loan, the property may need to be valued again, which means additional costs.

I recommend weighing all the pros and cons with a financial adviser before agreeing to a new agreement.

After a divorce, each partner is responsible for the portion of the credit obligations that was used for family needs. Personal loans taken out without consent or before marriage remain the responsibility of the person who took them out. The key is to collect the necessary documents in advance, check your credit history and avoid rushing into refinancing without calculating the consequences.

Translation into English was created with the help of artificial intelligence.