Debt Review When Married in Community of Property

Debt Review When Married in Community of Property

So you or your partner has over-indebted themselves so badly that it’s time for debt review, what now? Well, being married in community of property significantly impacts your and your partner’s financial life. You’ll both have to apply for debt review together, as when you married you shared assets, income, and all debt. The debt counsellor will assess your joint financial situation, assessing debts, income, and assets.

Your partner’s income will be taken into account to help make debt repayments, as this is what will expedite the repayment process most. In addition, the repayment plan negotiated by the debt counsellor will be legally binding on both of you. Neither of you will be able to take out finance or any sort of credit, or it will be deemed reckless lending.

This blog post discusses the financial implications of debt in community of property and exceptions that may apply to debt review in community of property.

Community of Property and Debt Review

First, let’s have a quick look at what community of property actually means.

What Is Community of Property?

In our country, community of property is the default antenuptial contract entered into when two people get married. Its contents state that any debt accrued before and during marriage, be it credit card, personal loan, mortgage or other, is shared. Even if your spouse is not at all in debt, they must still apply.

When Does My Partner Not Need to Apply?

If you and your partner signed an antenuptial contract– a contract discussing the distribution and rights to assets and debt before the marriage– your partner does not have to apply to debt review.

Are There Any Advantages to Undergoing Debt Review in Community of Property?

Yes! Debt counselling can be massively beneficial for couples struggling with debt. Some debt counselling advantages include:

Two is better than one! If you two have accrued debt together, you can use your combined
income to speed up debt repayments and create a more manageable payment plan.

Are There Disadvantages to Debt Review in Community of Property?

Of course, every rearrangement of finances has unique drawbacks. Here are some of community of property’s:

  • A lasting impact on your partner’s credit score
  • The length of the debt counselling process (3-5 years)

Debt counselling isn’t all sunshine and roses, but it can positively affect your finances down the road. Patience is key.

Applying for Debt Counselling in Community of Property

The application for debt review is the same as normal if you are married in community of property. You’ll receive a Form 16, but instead of listing only your name when populating the form, you’ll list your partner’s name and all the debt, assets, income, etc. as well.

Then, both of you will commit to paying off your debt, make the repayments, and graduate as a debt-free couple. Hooray!

Community of Property under debt review.

If you would like to rearrange your finances to get lower monthly debt repayments and legal protection, contact DebtCo Group. We would love to be of service.

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