Divorce or separation and mortgages in Poland

09.11.2023

Divorce or separation and mortgages in Poland

As soon as a divorce or separation decree becomes final, a division of property is established between them. It is important to note that divorce or separation in principle has no effect on the credit held by the ex-spouses and its repayment. The spouses are jointly and severally liable for repayment of the credit, which means that the bank can demand repayment from either or both spouses, at its discretion.

At this point, the question arises as to whether the Polish court will divide the mortgage. In property division proceedings, the court only divides assets that are jointly owned by the spouses. Consequently, a mortgage contracted jointly by the spouses remains outside the interest of the court, which not only does not in principle take it into account when calculating the value of the property to be divided, but also cannot decide which of the spouses will be obliged to repay the mortgage.

The Polish Supreme Court has stated that in a case concerning the division of the spouses’ joint property, which includes real estate subject to a mortgage securing a bank loan granted to the spouses, the court – when attributing this real estate to one of them – determines its value by disregarding the value of the mortgage charge, unless there are substantial reasons for taking it into account.

An important reason for taking the credit into account is the situation where the credit is “rewritten” in favor of one of the spouses with the bank’s agreement, in which case it will be taken into account in determining the value of the property, i.e. its value will be reduced by the same amount.

What happens when one of the spouses repays a joint obligation – a mortgage? If nothing else arises from the content of the relationship, the spouse (who is jointly and severally indebted to the other spouse) who has rendered the service, i.e. who has repaid the credit in part or in full, may claim repayment from the other spouse in equal shares, i.e. recourse.

Polish jurisprudence has established that the reciprocal claims of the spouses for payment of these debts must be recognized as part of the procedure for division of joint property. As part of the joint property division procedure, the Polish court also rules on the reciprocal claims of the spouses concerning possession of the respective assets constituting the joint property, benefits received and other income, expenses incurred for these assets and debts paid during the period between the cessation of the legal community and the division of the joint property.

So what’s the best way to solve a mortgage problem after a divorce in Poland? There are several ways for ex-spouses to solve their mortgage problem, and it all depends on the situation they find themselves in.

One of the simplest solutions is to “transfer” the credit, with the agreement of the bank and both spouses, to one of the spouses who has been allocated an apartment at the same time as them. It’s important to remember, however, that the bank won’t always agree to such an operation, since everything depends on the financial situation of the spouse concerned and his or her ability to convince the bank that he or she will be able to repay the loan on his or her own.

If it turns out that neither spouse has sufficient capacity to “take over” the loan alone, the loan contract can also be assigned to another person. This means that another person, such as a relative or partner, takes the place of the previous borrower, provided they meet the bank’s requirements.

Consequently, the situation of the parties and their financial capabilities play an important role. If the spouses are unable to reach agreement in a property division procedure, it may even be necessary to sell the property.