An all too common problem faced by many separating couples in Spain today is: how to deal with a property should the relationship ends? It is a cruel twist of fate that the emotional turmoil that many suffer at this time is exacerbated by the fact that the resale value of the property is not sufficient to fully repay the mortgage. So, simply opting to sell the property and splitting the proceeds is often not an option.
Divorce with mortgage: what then is the legal position of a couple who find themselves in this position and what options do they have?
Firstly it should be understood that when a couple sign a mortgage agreement each person becomes individually and severally liable for the repayment of the mortgage. The term ‘individually and severally liable’ means that both partners are liable for the entire mortgage. To illustrate the point, in an extreme case, should either die (and in the absence of mortgage protection insurance), the other becomes liable for repayment of the entire mortgage. One-half of the liability to repay the mortgage does not end with the demise of the other mortgagee. While this may seem unfair it is considered a necessity by the banks before lending to a couple.