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Who is responsible for the loan taken out while living together and being in a relationship?

Pille and Karl lived together for 10 years. Karl had inherited a large apartment from his grandmother in Kadriorg, which became the couple's first home. Before the birth of the first child, the couple decided to renovate the apartment so that everything would be comfortable and ready for the baby. As the bank was not willing to give out a loan to Karl by himself, Pille and Karl decided to take out a loan together. The apartment was renovated and soon the long-awaited baby was born. Karl was repaying the loan to the bank in monthly installments.

Two years later, Pille and Karl's relationship ended. Pille moved out of the family's home. A visiting schedule was agreed upon to grant access to the child. Pille thought that all matters had been solved concerning their now ended relationship. The surprise was great when one day Pille received a letter from Karl in which he asked Pille to reimburse half of the loan payments already made to the bank. In addition, Karl demanded that Pille pays half of the future monthly installments directly to the bank. Pille was convinced that since the loan taken together was only used to renovate Karl's apartment, she would not have to repay the loan to the bank and it would remain Karl's responsibility. No written agreements were reached during the relationship.

According to the loan agreement, Pille and Karl were co-borrowers. From the legal standpoint of the lender, the former partners were joint and several debtors (solidary obligors). This means that regardless of the purpose for which the loan was used, they were jointly and severally liable to the bank for repaying the loan. When applying for a loan together, it is worth remembering that it may involve an obligation to actually repay the loan together. As the law requires the joint and several debtors to fulfill the obligation in equal parts, Karl was entitled to claim compensation from Pille for half of the amount of the loan repaid to the bank.

In order to avoid the described situation, it is reasonable for the partners to think about and agree on who is responsible for fulfilling the obligations and to what extent. For example, Karl and Pille could have agreed in writing that, since the loan was taken for Karl's apartment, only Karl would be liable to repay the loan. The need for such agreements is often overlooked at a time when partners are living happily together and relationships are good. However, unpleasant surprises may come when the relationship ends. In the event of a breakup, oral agreements between the parties are often forgotten. When relations between the (ex-)partners get tough, it is difficult to reach any agreements.

The article was originally published on February 10, 2021 in https://perejakodu.delfi.ee/artikkel/92513647/kes-vastutab-kooselu-ajal-voetud-laenu-eest-vandeadvokaat-selgitab

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