Getting a personal loan while going through a divorce

[24601]

You’re just making stuff up!

Data protection, which you mentioned earlier, is of no relevance here.

A lender, when lending to a married person, can ask about household income. A credit union can even ask the other spouse to guarantee the loan.

The proof of income for the wife is her personal data. The CU is looking to obtain her data from her husband. Please tell me the legal basis, under GDPR, for the collection of her data by the credit union? She can, of course, consent to the use of her data for this purpose, but there's no basis for collecting proof of spousal income by default for all loans. The Central Bank has even advised credit unions against doing this.

A guarantee is totally different. The spouse, in that case, enters into a legally binding arrangement promising to take on the debt should the borrower renege on the debt.

A CU can ask what they like, I suppose, and some do still do this but they really shouldn't be asking for income details about a 3rd party who is not party to the credit agreement. It makes no sense. They also won't have sight of the spouse's debt position since they are not allowed to do a CCR check on them (why, you ask? Oh yes, data protection! There's no legal basis to run a credit check on someone who is not party to the loan application).

 

[ClubMan]

The poster is trying to obtain a loan under false pretences.

How exactly do you get that from this?

I applied for a personal loan with my local credit union

You were much more circumspect earlier:

However, the overarching concern is that the OP is, on the one hand, ‘flabbergasted’ by the Credit Union’s behaviour, yet on the other hand appears to be attempting to borrow money under false pretences. Unless he’s disclosed the full background to the lender?

And yet you accuse others of making stuff up...

Getting a personal loan while going through a divorce

I have a secure job, have paid all previous loans and have never had credit repayment issues whatsoever. However, I have a joint mortgage, which is currently being overpaid by the max 10% per month as there is excess income, with somebody who is still my wife in Irish law. (My Family Law Civil...

www.askaboutmoney.com

 

[Aodhán]

The irony of someone trying to take out a loan in an underhand manner and having the temerity to moan about the lender’s queries which will expose the attempt to hoodwink them…

Again, where on earth did I "attempt to hoodwink" anybody? I ticked 'married' as my legal status because that is precisely what it is, despite my legal actions to end it. It should be obvious that it would have been significantly easier to put 'single' down, but that would not have been the legal reality. What is your problem?

 

[Aodhán]

The poster is trying to obtain a loan under false pretences. The breakdown of the marriage is hugely material in the context of assessing the loan application and ticking ‘married’ and saying nothing in this case is analagous to ticking ‘employed’ in circumstances where someone has been given the chop and is working a notice period.

Thankfully for the good of the other credit union members, this ruse has been caught by the lender’s processes and procedures.

No, it's not. It was a one-line question with no option to comment, only a simple Are you: single; married; divorced; separated? And then they moved on to the next question. The only accurate box to tick was 'married'. Most people will be familar with the sort of application question. You've invented a paranoid fantasy scenario for whatever reasons of your own.

 

[DannyBoyD]

To obtain a divorce, you must be separated for two of the last four years.

As either you or your former spouse has started proceedings, it would be reasonable to believe you have or soon will meet that condition.

So the correct answer to the question on your current marital status is 'separated'.

 

[24601]

To obtain a divorce, you must be separated for two of the last four years.

As either you or your former spouse has started proceedings, it would be reasonable to believe you have or soon will meet that condition.

So the correct answer to the question on your current marital status is 'separated'.

Hmmm, this isn't right either, the requirement is that you have to be living apart, not "separated" (and it's for 2 of the previous 3 years). Separation is its own distinct legal arrangement (I'm guessing most people don't bother with it any more and jump straight to divorce). The OP can be best described as "married" but living apart. He is not separated in the legal sense of the word.

 

[Aodhán]

To obtain a divorce, you must be separated for two of the last four years.

As either you or your former spouse has started proceedings, it would be reasonable to believe you have or soon will meet that condition.

So the correct answer to the question on your current marital status is 'separated'.

No, as 24601 notes it's not. 'Separated' is a legal definition, along with 'divorce' and 'marriage'. My only legal status is 'married'. If I were to get a 'Judicial Separation' I would be 'separated'. As I do not have that, it does not apply.

 

[Aodhán]

So, the CU person said today they did their credit checks and I am liable for the entire mortgage under their credit check, even though it is jointly held and I have a history of my paying precisely half of it from the start of the mortgage. This reality, it seems, is irrelevant so when they put liability for the entirety of the joint mortgage on me, my net disposable income in their reality shrinks substantially.

Do all other credit unions assess jointly held mortgages like this? Is there any lender which I could go to which will look at the reality?

 

[DannyBoyD]

Hmmm, this isn't right either, the requirement is that you have to be living apart, not "separated" (and it's for 2 of the previous 3 years). Separation is its own distinct legal arrangement (I'm guessing most people don't bother with it any more and jump straight to divorce). The OP can be best described as "married" but living apart. He is not separated in the legal sense of the word.

Couples can share the same address & be living separate lives and meet the 2 year requirement.

A judicial separation or separation agreement is not required to be in place to describe oneself as separated.

The OP cannot meet the generally understood meaning of being married, if they are currently in divorce proceedings.

 

[NoRegretsCoyote]

There is a bit of the XY Problem going in here.

@Aodhán - you need funds for your legal fight.

Try and think about all the ways of achieving this (banks, CUs, friends, aggressive saving, family, liquidating other assets, etc).

I suspect that having a CU assess you on your own merits is not the only solution here.

 

[dubdub123]

The CU are probably requesting proof of spousal income because you indicated that you are married on the application.
You are clearly separated from your spouse while awaiting legal process so that would have been a more accurate answer.
While I was awaiting separation/divorce proccedings i had no issue obtaining a loan from CU, even with joint mortgage (i was covering those payments)

 

[Aodhán]

The CU are probably requesting proof of spousal income because you indicated that you are married on the application.
You are clearly separated from your spouse while awaiting legal process so that would have been a more accurate answer.
While I was awaiting separation/divorce proccedings i had no issue obtaining a loan from CU, even with joint mortgage (i was covering those payments)

And therein is the difference: you were always covering the entirety of the joint mortgage payment. I am not, nor have I ever been, so that €1500 or so which my ex pays for her share of the mortgage has never been something I have had to pay, just as she has not had to pay my €1500 or so share of the same mortgage.

What the assessor for the CU did yesterday was essentially reduce my net monthly disposable income by that €1500 or so which my ex pays for her share - even though in reality that money is in my account so I can easily cover the payments of the loan for which I applied. In this sense, your marital status didn't matter as you had always paid the full mortgage out of your own money. If I were to change my marital status to 'separated' - and legally I am still married - they would still see the same joint liability for the entire joint mortgage on the credit check under my name. And that's the key issue.

 

[RedOnion]

I am liable for the entire mortgage under their credit check, even though it is jointly held and I have a history of my paying precisely half of it from the start of the mortgage. This reality, it seems, is irrelevant

They're correct. You're both currently jointly and severally liable for the entire mortgage.

 

[Aodhán]

I suspect that having a CU assess you on your own merits is not the only solution here.

That's precisely it: I will need funds. I had expected to get any outstanding funds from a loan as in reality I have the disposable income but in theory it seems from the CU I do not have the funds by virtue of their attributing payment of the entire joint mortgage to me. They essentially reduced my monthly disposable income by €1500 by assessing me like that, and that's a shock to the way I had envisaged funding it.

As for the quoted part, what alternatives do I have? Thanks.

 

[dubdub123]

And therein is the difference: you were always covering the entirety of the joint mortgage payment. I am not, nor have I ever been, so that €1500 or so which my ex pays for her share of the mortgage has never been something I have had to pay, just as she has not had to pay my €1500 or so share of the same mortgage.

What the assessor for the CU did yesterday was essentially reduce my net monthly disposable income by that €1500 or so which my ex pays for her share - even though in reality that money is in my account so I can easily cover the payments of the loan for which I applied. In this sense, your marital status didn't matter as you had always paid the full mortgage out of your own money. If I were to change my marital status to 'separated' - and legally I am still married - they would still see the same joint liability for the entire joint mortgage on the credit check under my name. And that's the key issue.

Your initial post was a very misleading in how it was worded. The CU were looking across your and spouses household income as you indicated to them that you are married. This would be very normal if you cannot show repayment capacity on just one income. That is why they requested her income details.

The actual situation is that they need to look at your ability to repay while you have a mortgage that you are wholly liable for (in the eyes of the mortgage lender).

Are you over paying by 10% kn mortgage, if so is this necessary?
Can you avail of lower rate for mortgage eg has it moved to lower LTV,bracket
Can you and spouse agree to go interest only, so your outgoings decrease - im not sure if this may impact credit rating.
Try other lenders but be upfront about the situation regarding being separated. Lenders have varying criteria.
And regarding my situation, i doubt it would have made a difference to CU if i was paying half , none or all mortgsge as they eould have assessed it all. The fact you are paying half mortgage may allow you some bandwidth to save as It could take a long time to get to court.