Getting a personal loan while going through a divorce

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Aodhán

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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 Bill is submitted but her side has been delaying issues for well over a year now.)

I applied for a personal loan with my local credit union, whose loans I have always paid off early. However, it says that because I have a joint mortgage that in order to give me a personal loan it needs to see evidence of my ex's income.
Naturally, I'm flabbergasted at this, not least because if I need funds to fight her legally in court the CU is essentially saying I need her consent to get a personal loan *entirely in my own name* ( where I will be fully responsible for all repayments) to defend my interests against her in an Irish court.

Does anybody have any solution to this?
 
Ultimately the CU are the ones lending the money so provided they are not being discriminatory, they can ask for what they want.

Why do you need money for legal fees at this point? Is your Solicitor looking for a retainer?

Nothing much you can do about the time factor - it almost always seems to take near enough to 2 years.
 
Aodhán said:
I applied for a personal loan with my local credit union, whose loans I have always paid off early. However, it says that because I have a joint mortgage that in order to give me a personal loan it needs to see evidence of my ex's income.
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This is not the norm, but some credit unions still have very weird rules. They shouldn't need your ex's proof of income since she won't be party to the loan. The joint mortgage thing is a nonsense - they will see from the CCR that the loan is jointly held. They may decide to allocate 100% of the repayment, rather than 50%, to you for underwriting purposes given the circumstances, but they definitely should not be asking for anything from her. Did you have to provide her income documents for previous loans?

Edit: There's also data protection considerations. The CU has no legal basis to get your wife's income documentation from you directly, so she would have to consent to the CU processing her data to underwrite your loan.
 
It’s always funny when people post stuff with absolute conviction when they haven’t a notion really.

It’s normal for Credit Unions to look for information regarding a spouse’s income. The last time I took out a loan, they did, for example. A solution might be to borrow from a bank, which typically doesn’t.

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? i.e. that he’s in the process of a messy divorce which is likely to impact on his ability to repay his debts.
 
Gordon Gekko said:
It’s always funny when people post stuff with absolute conviction when they haven’t a notion really.

It’s normal for Credit Unions to look for information regarding a spouse’s income. The last time I took out a loan, they did, for example. A solution might be to borrow from a bank, which typically doesn’t.
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It was normal for credit unions to only lend 3x savings. It was normal for them to require you to be a member of X weeks before applying for a loan. It was normal for them to lend to you based on who you're family are. Thankfully most of them have moved on, and most no longer look for spousal income when assessing an individual's repayment capacity for a variety of very good reasons. Some still do but it's not the norm.

It's a very strange practice. I can understand how it might be beneficial to get a borderline case over the line but as a general underwriting requirement it makes very little sense. And, as I already mentioned, the practice of collecting, processing and retaining 3rd party data in this scenario raises all sorts of data protection questions.
 
Aodhán said:
Does anybody have any solution to this?
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Just following on from @Gordon Gekko 's point, you can tell them that you and your wife have separated and they should drop the spousal income requirement. However, based on their approach this will likely impact your repayment capacity if you have been providing spousal income for your loans with them to-date.
 
"on the other hand appears to be attempting to borrow money under false pretences. Unless he’s disclosed the full background to the lender? i.e. that he’s in the process of a messy divorce which is likely to impact on his ability to repay his debts."

Eh, no I'm not. The application form asked for marital status and married was, unfortunately, the only legal status I could choose because I am neither separated not divorced in law yet. It had no space to add anything else. What's your problem?
 
Apparently you cannot get a loan from another credit union if it's outside the area in which you live so the local credit union has monopoly status in this area, it seems. Kilcloon Credit Union, for instance, is offering car loans at 4.85% APR and loads of other comparatively cheaper loans but because I live in a different area they will not accept me as a member (https://www.kilcu.ie/).
 
DannyBoyD said:
Ultimately the CU are the ones lending the money so provided they are not being discriminatory, they can ask for what they want.

Why do you need money for legal fees at this point? Is your Solicitor looking for a retainer?

Nothing much you can do about the time factor - it almost always seems to take near enough to 2 years.
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I'd imagine it's discrminatory under the 'civil status' clauses of the Equal Status Acts to say to somebody they're not eligible to apply for a personal loan unless they get the consent of their ex (https://www.ihrec.ie/your-rights/services/civil-status/).

Further, it's irrelevant why I might have to pay legal fees. As it happens, I've already done so out of my own savings. It is important, however, that if my savings run out in a year's time or so that I will not have my ability to borrow to fight my ex decided by a lender saying I need her consent to get a loan to fight her. That's a crazy condition on a loan I will have more than enough capacity to repay in my own right (and a family home with substantial equity).
 
DannyBoyD said:
It's live or work generally.

Most CUs have similar conditions.
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So, maybe it needs to be made illegal to have those conditions because the idea of having credit unions which effectively have a monopoly status in a locality due to a ban on residents joining another credit union has no place in an economy which claims to emphasise competition.
 
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Aodhán said:
"on the other hand appears to be attempting to borrow money under false pretences. Unless he’s disclosed the full background to the lender? i.e. that he’s in the process of a messy divorce which is likely to impact on his ability to repay his debts."

Eh, no I'm not. The application form asked for marital status and married was, unfortunately, the only legal status I could choose because I am neither separated not divorced in law yet. It had no space to add anything else. What's your problem?
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It’s similar to ticking ‘employed’ when you’ve already been made redundant and are exiting your job.

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…
 
24601 said:
This is not the norm, but some credit unions still have very weird rules. They shouldn't need your ex's proof of income since she won't be party to the loan. The joint mortgage thing is a nonsense - they will see from the CCR that the loan is jointly held. They may decide to allocate 100% of the repayment, rather than 50%, to you for underwriting purposes given the circumstances, but they definitely should not be asking for anything from her. Did you have to provide her income documents for previous loans?

Edit: There's also data protection considerations. The CU has no legal basis to get your wife's income documentation from you directly, so she would have to consent to the CU processing her data to underwrite your loan.
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Thanks for that. I had not known they could see from the CCR that it was a joint mortgage. They never, curiously, asked about the equity in the house (which is substantial). Yes, when I got a (more substantial) loan some years ago they asked for my ex's income and I provided it. This time, my own income is substantially more and my loan request substantially less and, most of all, I reject the idea of essentially seeking the permission of my ex, who hates me, before I can borrow money I will be fully responsible for repaying and have a proven capacity to repay. And because the local Credit Union has a monopoly status, it's not like I can just choose another credit union (bank interest rates are higher).
 
Aodhán said:
Apparently you cannot get a loan from another credit union if it's outside the area in which you live so the local credit union has monopoly status in this area, it seems. Kilcloon Credit Union, for instance, is offering car loans at 4.85% APR and loads of other comparatively cheaper loans but because I live in a different area they will not accept me as a member (https://www.kilcu.ie/).
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The CU common bond rules (guidelines?) are becoming more and more loose and there is often a way to (legitimately) deal with a CU other than your immediately proximate one.
 
Gordon Gekko said:
It’s similar to ticking ‘employed’ when you’ve already been made redundant and are exiting your job.

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…
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You keep saying this but I fail to see where the original poster admitted to anything underhand in their application.
 
Gordon Gekko said:
It’s similar to ticking ‘employed’ when you’ve already been made redundant and are exiting your job.

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…
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What are you talking about? There's no obligation to disclose the particulars of your martial difficulties when applying for a loan. They asked him his marital status, and his martial status is "married". He also hasn't said anything to suggest he's trying to "hoodwink" them. A loan application isn't a cross-examination or declaration of all material facts, you answer the questions the lender asks you, no more, no less.
 
ClubMan said:
You keep saying this but I fail to see where the original poster admitted to anything underhand in their application.
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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.
 
Aodhán said:
So, maybe it needs to be made illegal to have those conditions removed because the idea of having credit unions which effectively have a monopoly status in a locality due to a ban on residents joining another credit union has no place in an economy which claims to emphasise competition.
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The whole legal basis of credit unions is that they operate with a common bond. Most of them would collapse if that was taken away since there'd be very little sense in having 200+ of them serving the same market. It seems unfair though when the one you can join has silly rules or less favourable rates than a nearby one you can't join.

Aodhán said:
Thanks for that. I had not known they could see from the CCR that it was a joint mortgage. They never, curiously, asked about the equity in the house (which is substantial). Yes, when I got a (more substantial) loan some years ago they asked for my ex's income and I provided it. This time, my own income is substantially more and my loan request substantially less and, most of all, I reject the idea of essentially seeking the permission of my ex, who hates me, before I can borrow money I will be fully responsible for repaying and have a proven capacity to repay. And because the local Credit Union has a monopoly status, it's not like I can just choose another credit union (bank interest rates are higher).
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The equity in the house is of no relevance, you can't service the loan with it. You do not need your wife's permission, it's just that they don't appear willing to underwrite the loan without sight of her income (as far as they're concerned you're still together, and they have had sight of this for previous loans). They shouldn't be doing this but you have to deal with what's in front of you so I would try argue your case with them. The fact that you are informally separated should be enough for them to drop the requirement but just be aware that this might impact affordability as their approach is presumably using household income.
 
24601 said:
The whole legal basis of credit unions is that they operate with a common bond. Most of them would collapse if that was taken away since there'd be very little sense in having 200+ of them serving the same market. It seems unfair though when the one you can join has silly rules or less favourable rates than a nearby one you can't join.



The equity in the house is of no relevance, you can't service the loan with it. You do not need your wife's permission, it's just that they don't appear willing to underwrite the loan without sight of her income (as far as they're concerned you're still together, and they have had sight of this for previous loans). They shouldn't be doing this but you have to deal with what's in front of you so I would try argue your case with them. The fact that you are informally separated should be enough for them to drop the requirement but just be aware that this might impact affordability as their approach is presumably using household income.
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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.
 
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