Co-borrower guarantee: what to do in case of divorce or separation of the couple?

When a couple takes a consumer credit or a home loan and that the two members of the couple sign the loan contract, they are co-borrowers. The bank may demand payment of the monthly loan payments from each member of the couple. Each member of the couple is the guarantor of the loan. This is the co-borrower guarantee.

The divorce or separation of the couple does not terminate the loan agreement or the co-borrower guarantee.

But the couple can get the cancelation of the co-borrower guarantee in one of the following ways:

• Either in prepaying the loan (for example, by selling the property financed with the loan, which may, however, cause costs). When the loan is repaid in full, the guarantee of the 2 co-borrowers ends.
• Either by asking the bank the separation of one of the co-borrowers. If the bank acceptsHowever, the other co-borrower remains the only one to repay the loan and to be the guarantor.
• Either by asking the bank cancel the guarantee of one of the co-borrowers. To do this, the co-borrower must be replaced by a new guarantor or additional collateral (e.g. mortgage, a bond). This replacement must be proposed to the bank. If the bank accepts, the loan agreement continues with the remaining co-borrower and a new guarantor or additional guarantee.