Windhoek, Sept.23 –A divorce may determine who keeps a house, but it does not automatically remove either spouse from the home loan, Bank Windhoek’s Divisional Manager: Legal Debt Recovery, Collins Omalu, has warned.
Omalu explained that even when a divorce settlement says one spouse will keep the property and take over the bond, both former spouses can remain legally responsible for the loan until the bank formally changes the agreement.
A divorce settlement is separate from the home loan contract between the borrowers and the bank. If the loan is registered in both names, both parties remain jointly and severally liable for the debt.
This means that if payments fall into arrears, the bank can seek repayment from either or both borrowers, even if one spouse has already moved out of the property.
For one spouse to be released from the loan, the property and bond must go through the required legal and banking processes. The property may need to be transferred to the spouse keeping it, while the existing bond is taken over, refinanced or settled.
The bank will also assess whether the remaining spouse can afford the loan on their own. The former spouse is only released once the relevant transfer and bond changes have been completed and confirmed by the bank.
Omalu said the period between the divorce agreement and completion of these processes can create risks. Missed payments may result in arrears and affect the credit records of both former spouses.
He advised divorcing couples to agree in writing on who will make the monthly payments during the transition and to contact the bank early to understand the requirements for transferring or refinancing the loan.
Couples should also obtain regular updates from their attorney or conveyancer on the property transfer and bond process.
The key point is that a divorce settlement can determine who keeps the property, but it does not by itself change the bank’s loan agreement. Former spouses should therefore not assume they have been released from the debt until the bank formally confirms the change.
