Divorce and a common apartment loan

[vicktor_1 4]

Dear community,

 

I am getting divorced and the separation year just finished. The ex and I have bought an apartment two years ago together and signed a loan for it together. (funny right )

I moved out in a rented apartment. During the separation year, I was paying only minimal child support and no spouse support, so that I can pay "my half of the loan".

 

Now she claims full child support and spouse support, which makes it financially impossible for me to pay also the 1/2 of the loan for the common apartment. She lives in it for the moment.

 

Of course, I have a lawyer but wanted to ask for a second opinion on how things can develop when I just stop paying the loan (and pay of course the full support).  The ex knows very well the finances and what it means. I try to communicate and discuss but any dialog is declined and I get only letters from her lawyer, last one saying that she will sue me, if I do not pay the loan also. 

 

How does it go with those common loans, when one just cannot pay? 

Thanks!

Viktor

 

[LeonG 13,574]

As far as I know, the bank can go after either one of you and if nobody is paying, the bank will eventually move in and auction off your condo.  If your ex were reasonable, she would see that you cannot pay, would move out and you would sell the condo and pay off the loan.  As she is not being reasonable, you may lose it.

 

What does your lawyer say?  You paying half of the loan for the condo she is living in may also be considered a portion of you supporting her.

[mtbiking 1,331]

The property must be sold and should have been sold already. What you’re doing is not normal under the circumstances or advisable. She either has the money to buy you off (after you getting the property newly valued, of course), or she has to move out to her own place. Sorry, but you’re being screwed and I don’t understand why your lawyer allowed it.

[Space Cowboy 1,461]

@vicktor_1 I don‘t understand your situation.  There is something key here that is missing from what you have described.

 

Jointly-held assets and property are supposed to be divided, given exclusively to one party, or disposed of during the separation process, unless you both sign an agreement that specific assets will continue to be held jointly.  This is one of the things upon which the lawyer(s) should be laser-focused.

 

So, you should have either sold the property and divided the money/paid off the loan, given the apartment to your ex free-and-clear with her as the responsible payer, formalized an agreement that she would own it but you would continue to pay half, or formalized an agreement on how the property would be jointly held going forward.  An agreement on sole ownership with joint payment, or continued joint ownership and joint payment, would include how a mortgage would be paid for, how payment default by one party would be handled, and who would live in it.

 

Are you saying none of this was done?  That would be...highly unusual.

 

What‘s the real story?

 

 

[vicktor_1 4]

37 minutes ago, mtbiking said:

The property must be sold and should have been sold already. What you’re doing is not normal under the circumstances or advisable. She either has the money to buy you off (after you getting the property newly valued, of course), or she has to move out to her own place. Sorry, but you’re being screwed and I don’t understand why your lawyer allowed it.

She is paying a rent to me and 1/2 of the loan. It is all by the law.

 

For me the bigger concern is, if worse comes to worst, the bank cannot really kick them (her and the kids, which are 40% with me) out easily and I am the easier and higher earning target, although, I am at 0 after the rent and the crazy support.

[mtbiking 1,331]

Still unusual and IMO a stupid thing to do as you have capital and obligations tied up to a property you cannot freely dispose of in the future if you need or want to. And you have your exwife as Mieterin.. nothing good will come out of this I’m afraid.  Nevertheless, if the rent she’s paying you is fairly set then it should at least cover the monthly rate of your loan if not give you a small profit, in which case you shouldn’t have problems paying the support. So something still doesn’t match up.

[vicktor_1 4]

Yes, it is fairly set but the way it functions is because she owns 1/2 the apartment, she lives in her 1/2 and pays only 1/2 rent, so helps but not enough at all to pay for my part of the loan.

 

The situation is not meant to be for ever and she will move out at some point. We will either sell the apartment OR to give her credit she will give up her claim on the 1/2 with the condition to transfer the ownership to the children, so that I can take over the loan (possible, if she doesn't claim full support)  But she does claim the full children and spouse support now so that's why I opened the topic just to get opinion on possible outcomes. But I guess, not many options. I can still manage with savings for a few more months but in January is all over.

 

If you want numbers to make it clear, if I pay all (rent, loan, full support) I end up with about 500 euro left for me to live a month, and have the children 40% with me

 

[LeonG 13,574]

35 minutes ago, vicktor_1 said:

She is paying a rent to me and 1/2 of the loan. It is all by the law.

 

For me the bigger concern is, if worse comes to worst, the bank cannot really kick them (her and the kids, which are 40% with me) out easily and I am the easier and higher earning target, although, I am at 0 after the rent and the crazy support.

 

If the bank can't get the money from either of you, regardless of who is the higher earner, they will go after the condo.  If the condo is sold at auction, your wife will have to leave.  I think you have to make this clear to her.

 

My manager at my last job had a similar case.  Ugly divorce and wife insisted on staying in the house.  He pleaded for her to leave the house so he could go in there to make quick repairs and try to sell it.  She refused.  They lost the house and he ended up filing for bankruptcy.  He told me that when you are filing for bankruptcy, you no longer pay alimony.  His ex wife ended up on welfare. 

[lunaCH 969]

1 minute ago, LeonG said:

If the condo is sold at auction, your wife will have to leave.

What happens if they have a rental contract though? Could she then stay and the new owner (via auction) be obliged to take over the contract?

[vicktor_1 4]

56 minutes ago, Space Cowboy said:

@vicktor_1 I don‘t understand your situation.  There is something key here that is missing from what you have described.

 

Jointly-held assets and property are supposed to be divided, given exclusively to one party, or disposed of during the separation process, unless you both sign an agreement that specific assets will continue to be held jointly.  This is one of the things upon which the lawyer(s) should be laser-focused.

 

So, you should have either sold the property and divided the money/paid off the loan, given the apartment to your ex free-and-clear with her as the responsible payer, formalized an agreement that she would own it but you would continue to pay half, or formalized an agreement on how the property would be jointly held going forward.  An agreement on sole ownership with joint payment, or continued joint ownership and joint payment, would include how a mortgage would be paid for, how payment default by one party would be handled, and who would live in it.

 

Are you saying none of this was done?  That would be...highly unusual.

 

What‘s the real story?

 

 

This exactly has been in discussion for the last year and not cleared thus the current situation. 

 

No story, I moved out and she lives there but has not moved out yet. 

 

Why would I want to transfer the apartment to her and she would have sole ownership but I pay 1/2 the loan? 

 

 

 

[fraufruit 35,713]

Do you have to declare the rent she pays as income?

[vicktor_1 4]

3 minutes ago, lunaCH said:

What happens if they have a rental contract though? Could she then stay and the new owner (via auction) be obliged to take over the contract?

We have no rental contract, the "rent" is a standard practice agreed by the lawyers and us. No formal agreement.

[vicktor_1 4]

3 minutes ago, fraufruit said:

Do you have to declare the rent she pays as income?

This is a very good question. I don't know, I will ask the lawyer but considering that there is no contract per se, just formal agreement, I would say no

[vicktor_1 4]

11 minutes ago, LeonG said:

 

If the bank can't get the money from either of you, regardless of who is the higher earner, they will go after the condo.  If the condo is sold at auction, your wife will have to leave.  I think you have to make this clear to her.

 

My manager at my last job had a similar case.  Ugly divorce and wife insisted on staying in the house.  He pleaded for her to leave the house so he could go in there to make quick repairs and try to sell it.  She refused.  They lost the house and he ended up filing for bankruptcy.  He told me that when you are filing for bankruptcy, you no longer pay alimony.  His ex wife ended up on welfare. 

Sounds like the direction, I am heading to 🤣

How can some people ignore pure facts and not judge the situation when all is presented and consequences are clear?

 

I still hold some hope for reaching an agreement. It is just so ugly and painful when there is no communication and only a letter or two per month between the lawyers. 

[LeonG 13,574]

4 hours ago, lunaCH said:

What happens if they have a rental contract though? Could she then stay and the new owner (via auction) be obliged to take over the contract?

 

It may complicate things that she's part owner / part tenant. An owner would normally have to leave right away.  Just the sales notice from the auction is equivalent to a court order to start the eviction process. 

 

As a tenant, the buyer would initially take over the contract but can give her notice due to eigenbedarf and they have a special right of notice (sonderkündigunsrecht) which allows them to give her only 3 months, regardless of how many years she has lived there.  Of course it is possible that the buyer plans on renting it out anyway and she can just continue renting it.

 

4 hours ago, vicktor_1 said:

Why would I want to transfer the apartment to her and she would have sole ownership but I pay 1/2 the loan? 

 

You wouldn't.  If she wants to keep the apartment, she should fully take over the loan plus whatever you both already own in the apartment, she should pay you out half.  If you sold it, that would be the case, the loan would be paid off and leftover money be split.

[vicktor_1 4]

Actually, what I learned from my lawyer today is that as we are both on the bank loan, if I stop paying , the ex can sue me and pretty quickly and directly withdraw the needed amount from my salary from work. Regardless that I owe support and that is not considered. So at the end I can potentially end up with 1200 per month which is the minimum for survival.  Although, i dont know how that can work with the rents in Munich and having my children 40%. 

And of course, the ex so far refuses to sell the apartment...  It will be interesting few months.

[LeonG 13,574]

4 hours ago, vicktor_1 said:

Actually, what I learned from my lawyer today is that as we are both on the bank loan, if I stop paying , the ex can sue me and pretty quickly and directly withdraw the needed amount from my salary from work. Regardless that I owe support and that is not considered. So at the end I can potentially end up with 1200 per month which is the minimum for survival.  Although, i dont know how that can work with the rents in Munich and having my children 40%. 

And of course, the ex so far refuses to sell the apartment...  It will be interesting few months.

 

So bankruptcy is starting to sound better in that case. At least with that, you are only broke for 7 years.  With this, who knows.  You can talk to your work about a possible pfändung of your salary and what will happen.  Some companies charge you a fee if you get it.  You may also be able to negotiate with your employer to help you out by for example paying your rent or car as a part of your salary.  Ask your lawyer if that will work.  You can ask your bank to turn your account into a P-Konto.  That will give you some protection from your ex trying to freeze it or empty it completely.

 

Can your lawyer help you force a sale of the apartment or can you raise the half rent of your ex?

 

[RAMBO 67]

Try contacting the bank to make interest only repayments or at least reduce the tilgung rate if possible.