The division of property upon divorce in most cases is an integral part of the process. However, the question of how to divide money and deposits still creates many problematic situations for ex-spouses. Indeed, despite the huge number of divorces and, accordingly, extensive practice in this category of cases, the division of money is often associated with certain difficulties.
A lawyer can help you figure out how to divide the money. Professional support from a specialist is a guarantee that you will be able to use the most effective way to solve the problem and avoid violation of your interests by the interested party.
Legal basis for dividing money
According to current legislation, the same principle applies to money and deposits as to other property: funds are divided equally. However, one cannot fail to take into account that money is a rather specific subject, and it is not always possible to complete the division in such a way that each party has no claims.
Unlike other property (for example, real estate or cars), it is difficult to determine exactly how much money to divide. Therefore, during a divorce, only those funds are divided, the receipt of which into the general family budget is documented.
As a rule, it is difficult to provide any documentary evidence in relation to cash, and therefore, fair division can most often only be counted on in relation to bank deposits.
When there is no need to compensate for the debts of a husband or wife during a divorce
There are situations when one of the spouses turns out to be neither a dream nor a spirit about the debts of the other half. For example, a husband is a seasoned casino gambler or has accumulated credits to fly to a resort with friends, but he told his wife that he was going on a business trip. Perhaps he drinks his money away or spends it on illegal substances. In this case, the court will not oblige the woman to pay for her husband’s entertainment, but will require evidence.
“In court, you will have to confirm that the spouse not only takes out loans without the consent of his other half, but also secretly uses the money for some of his own needs,” explains Yulia Sugrobova. “And these needs have nothing to do with the family.” You will need to present photographs of your spouse basking at a resort under the southern sun, or testimony from witnesses that he abuses alcohol or takes drugs. Then the court will recognize this debt not as a common debt, but as a personal debt of one of the spouses.”
Fact. One of the main conditions for recognizing a debt as personal is that the second spouse not only does not know about the debt to the bank or creditor, but is also not a guarantor under this loan agreement.
In a similar way, you can demand that the loan taken out to buy a car be assigned to your husband. But only if the car was bought in the name of the husband, only he drove it, and after the divorce he takes the disputed car for himself. Then the wife may insist that she has nothing to do with the car and should not pay the loan for it. And since the spouse uses the car alone, let him pay off the loan obligations to the bank himself.
The situation is much more complicated with debts on loans, which, although they are taken out without the consent of the other half, are for common family purposes. For example, my wife bought a refrigerator. It will be difficult for the husband to prove in court that he has never used this refrigerator, although initially he may have been against the purchase. The spouses will have to pay off such a debt to the bank together.
pixabay.com/Pexels
How does the division happen?
As in the case of other property, money and deposits can be divided during a divorce either on the basis of a settlement agreement or in court. The first option is considered the most preferable (especially when dividing money), since when going to court it is not always possible to provide evidence of how much funds are subject to division and whether they can really be classified as jointly acquired property.
Along with this, the legal proceedings themselves take time, so from any point of view, concluding a settlement agreement has its advantages.
Settlement agreement
So, a settlement agreement is a document that sets out the agreements of the spouses regarding the division of cash and bank deposits. A distinctive feature of such an agreement is that deposits and money are divided voluntarily, and the parties do not have any claims against each other.
There is no legally prescribed form of the document, but the text of the agreement must contain the following information:
- information about the parties;
- information about the conclusion and dissolution of marriage (if the marriage union has already been dissolved);
- the exact amount of funds (cash and deposits);
- a list of bank accounts in which savings are located;
- procedure for dividing deposits and cash;
- additional provisions;
- information about the place and date of signing;
- signatures of the parties.
Important! It is possible to draw up a settlement agreement both before, during and after a divorce. The parties can reach a peaceful agreement even during court proceedings (the main thing is to have time to conclude an agreement before a court decision is made).
The settlement agreement is subject to notarization. It should be taken into account that if one of the parties does not comply with the terms of the document, it is very difficult to achieve its enforcement. As a result, if events develop unfavorably, you will still have to go to court.
Judicial procedure for partition
Going to court in order to divide money and bank deposits may be necessary in a situation where the parties are unable to reach a common solution through negotiations. In general, the division of deposits and cash through the court is common. In order to divide the money, you will need:
- file a claim;
- collect evidence;
- competently present your position during court proceedings;
- obtain a court decision;
- ensure its implementation.
Important! When filing an application with the court, you must also submit a petition requesting information about deposits opened in the name of the spouse in banks. This will avoid a situation where a husband or wife can hide the presence of funds on deposits.
Division of debts by agreement
Family or civil law does not provide for a separate agreement on the division of debt obligations.
But this fact does not prevent the inclusion of provisions on the division of debts in the agreement on the division of property of the spouses. The document is drawn up in writing and is subject to notarization. An agreement regarding the debts of divorcing or ex-spouses can also be concluded as part of a court proceeding. In this case, before making a decision, if there are written agreements between the disputing parties, the court approves the settlement agreement.
All debts are calculated at the time of drawing up the agreement and are confirmed by documents (loan agreements, receipts, loan agreements).
Important! As the Supreme Court of the Russian Federation indicated in the already mentioned ruling No. 18-КГ18-201, it is impossible to change the terms of the original loan agreement without the consent of the lender. This rule follows primarily from paragraph 1 of Art. 450 of the Civil Code, according to which changes to the contract are possible by mutual agreement of the parties.
It follows from this that the parties do not have the right to change the terms of the loans by agreement. In particular, the parties cannot stipulate that they undertake to make monthly payments in equal shares if, according to the agreement, one of them is the payer. But it is possible to register the obligation of one of the parties to compensate a certain share of the periodic payment of the party - the payer of the loan.
Specifics of dividing money in different situations
So, as a general rule, joint money is divided in equal shares, but in some cases the court may deviate from this rule. In addition, sometimes one spouse cannot claim funds at all. Let's look at the most common options that arise when a marriage is dissolved.
The deposit was opened during marriage, but the second spouse does not know about its existence
The opening of a deposit by one of the spouses during marriage (even if the husband or wife does not know about it) is not a reason for excluding these funds from the common property. As a result, if the existence of such an account becomes known during the divorce process, the money in it will be divided equally.
The deposit was opened during marriage, but personal funds are placed on it
As we noted above, as a general rule, contributions are divided in equal shares. However, deviations from this provision are possible if personal funds were placed on the account (a gift, funds from the sale of property purchased before marriage, etc.). The main difficulty lies in collecting evidence: the court excludes such contributions from the common property only if the relevant documents are provided.
The deposit is opened in the name of the child
Money that is in a child's account often becomes a subject of disagreement between ex-spouses. But the legislator has a clear opinion on this issue: deposits for minors are not subject to division.
The account was opened before marriage, but joint funds were deposited into it
In such a situation, the initial contribution is not subject to division, but those funds that were contributed after the marriage will be divided. In this case, the spouse who owns the account is required to pay compensation. If interest was accrued on the deposit, such income is also subject to division.
What about the mortgage?
The hardest part is the mortgage debt. Banks often require spouses to act as co-borrowers under the agreement. This means that they have the same financial responsibility to the lender - the bank that issued the mortgage. In almost all cases, this type of debt is jointly acquired.
Upon divorce, they will be liable for the debt, taking into account the shares received. For example, if each spouse gets 1/2 of the apartment, then they will pay the debt equally. Selling a mortgaged property in such a situation is difficult: you first need to repay the loan.
If there is mortgage debt, then the spouses who have decided to divorce have several options:
- Everyone will continue to make mortgage payments in the amount provided depending on the share received in the apartment.
- Pay off your mortgage debt ahead of schedule by taking out a new loan for each of your ex-spouses (often offered by banks).
- Transfer all shares to one spouse so that he remains the sole owner and pays the mortgage himself.
The deposit is open during marriage, but during separation
As a general rule, the funds will be divided equally. However, it is possible to avoid this, but only if the spouse who owns the account can prove that the money was deposited on it during the period of separation and belongs only to the owner of the deposit.
If the deposit is closed before the divorce
If the relationship worsens, the spouse who owns the account can close it and take away all the funds in it. These actions are against the law, but the process of proof can take a long time. Moreover, if it is possible to collect all the necessary evidence, the spouse who misappropriated the money will be obliged to pay half.
Let's summarize. The division of money and deposits can be done both pre-trial and in court (at the same time, according to current family law, cash and funds on deposits are divided equally). But, of course, regardless of the chosen option, the availability of professional legal support is a prerequisite for the funds to be divided in accordance with the principles of legality and fairness.
Sources:
Family Code of the Russian Federation dated December 29, 1995 No. 223-FZ
Responsibility of spouses
A couple's obligations after a divorce are personal and personal. Each is responsible for the responsibilities that both have assumed, or that one of them has accepted by agreement with the other. Such liability arises only on the condition that these debts were important for both spouses, and the borrowed funds were used for the general needs of the family.
Debts are considered joint if they relate to the purchase of common property (house, apartment) or remain after damage to other people by the former spouse or children.
General debt obligations
The RF IC determines that in the event of a divorce between spouses in 2021, not only joint property, but also debt obligations will be divided. Art. 39 indicates how this distinction occurs: when dividing common property, the court determines the size of the shares that are intended for each of the spouses. The total debt obligation is distributed in accordance with them.
The main problem is the difficulty of determining which debt is considered common. This is because their sources of origin can be completely different. Most debts are a consequence of loan agreements. And their subject-object composition can vary significantly:
- one spouse acts as a borrower and takes funds for his personal needs;
- the borrower is one of the spouses, the loan is issued and spent on general needs;
- the loan is issued to both spouses (or one of them acts as a guarantor);
- the loan is issued to one of the spouses, and the co-borrower is one of the family members, but not the second spouse, etc.
The condition of the loan agreement is joint liability between the borrowers or between the guarantor and the borrower. And such a rule sometimes conflicts with Art. 39 of the RF IC on the distribution of debts according to shares. Therefore, each court decision on such issues is made only after careful study of the opinions of lenders, borrowers and guarantors. If the judge makes a verdict that contradicts the loan agreement in terms of further repayment, the bank can challenge the decision in a higher court.
Let's consider what debt will be common to a husband and wife. The decisive factor in the determination is the purpose for which the loan or credit was issued. If money was taken and spent on the needs of the family, then it is classified as general debt obligations.
If the loan agreement specifies the purpose of purchasing household appliances, furniture, vouchers for a family vacation, etc., then these are joint needs. They should also include paying fees for the education of joint children or purchasing personal property for them.
In 2021, not only a loan agreement, but also sales receipts, vouchers, and the presence of the item itself in family ownership can serve as evidence of the existence of a common debt between spouses.
Debt legislation
The division of debts is as pressing an issue in legal practice as the division of property between ex-spouses.
Every second family has loans.
Marital debts also include other legal relations in the financial sphere, for example, utility bills, installment plans in a store, and other loans.
When dividing debt obligations during divorce proceedings, the law
focuses the attention of the parties on the fact that the spouses are equal in this matter. If there are joint debts, each of them will be ordered to pay some part of them. This is clearly stated in the UK (Article 45). There are also exceptions for each case.
For example, in family life, one of the spouses earned money, and the other spent it exclusively on personal needs or hid his part of the income. If the court recognizes that there were no valid reasons for this, the law will side with the “injured” party (IC Article 39). The defendant will be required to take on all debts and pay them off.
Arbitrage practice
Over the past two years, court decisions on the issue of division of common debts have changed significantly, thanks to clarifications of the RF Supreme Court on the inadmissibility of universal recognition of common liability for loans issued to one spouse.
Now the judge, when considering the case, requires evidence that the funds received from the loan were entirely spent on general family needs.
To divide common debts in 2021, former spouses can resort to the help of a court or reach an amicable agreement among themselves.
Bank loans section
The difficulty of dividing general debts on bank loans is that without the approval of the bank, the procedure is problematic. Those. the judge, of course, can make a decision, but if it does not satisfy the credit institution, then the latter can easily challenge it.
Should the first spouse be responsible for the personal loans of the second?
Not really
As a rule, banks insure themselves by initially including in the contract a clause for dividing the debt in the future in case of divorce. He will have to follow the sides. But if there is none, then the following division methods become possible:
- the debt is transferred to one of the spouses;
- then both spouses continue to pay the debt together;
- the loan agreement is restructured, drawing up two accounts. Next, each spouse pays their portion separately.
When an apartment with a mortgage is not divided equally
This is possible if one party made payments in excess of the amount established by the agreement and these funds were personal. In this case, the court may increase the share in the apartment if the borrower can provide evidence that this money was indeed personal and not jointly acquired.
An apartment purchased with maternal capital will also not be divided equally. Part of the apartment, paid for by maternal capital, will be divided between parents and children. The remaining part is between spouses (possibly already ex-spouses). For example, a family with one child paid 10% of the cost of the apartment with maternity capital. This 10% will be divided among the three, the remaining 90% will be divided between the parents.
