Time to find out the strength of the bond between you and your joint loan partner. Source: freepik
It makes no difference if a partner stops paying or pays less
The simplest solution is to sell off the property and divide the proceeds
Pay your partner and transfer the rights of the property to yourself
Banks are usually indifferent towards your marital status
Do you know what my Uncle Marney used to say? Nothing is more romantic than a couple taking up a joint loan to buy a house. Not even a candlelight dinner at a Michelin-star restaurant can compare to it. That is because the act itself is an unspoken statement that their relationship shall last for more than 25 to 30 years, depending on the tenure of the joint loan.
Uncle Marney said that joint loans can be very fun because the combined income of two individuals or more allows them to raise the threshold of money they can borrow from the bank.
But Uncle Marney also warned that fun things can also be dangerous, just like milking a cow. “When you milk a cow too hard, you draw blood, not milk,” he said. I have no idea what Uncle Marney meant by that, but he wants to tell the tragic story of his Korean friend Bun Kyup Tsy who took a joint loan with his Vietnamese wife Chea Tha Thui.
1. When a partner stops paying
You really need to rethink that divorce if there is a joint loan in the background of your marriage. Source: freepik
Apparently, Bun Kyup Tsy and Chea Tha Thui bought a penthouse in Mont Kiara for RM1.5 million. Back then, they were both talking about having two children together and if the baby was a boy, his name would be Byun See Hun, and if the baby was a girl, her name would be Byun Joo Ah.
But a few years down the road, Chea Tha Thui met a British man by the name of George Stallion, and I think we both know how this story is going to end. To keep things simple, Chea Tha Thui stopped servicing the mortgage after divorcing her husband.
Now here comes a sticky legal situation. Since Bun Kyup Tsy is the only person paying for the loan, does he have sole ownership over the property? The answer is simple.
If the title of the property is under the name of both partners, then both of them have ownership over it, regardless of whether the other pays or not, or pays less. Life sure sucks if you are in the shoes of Bun Kyup Tsy.
Uncle Marney also said, “It is very important to spell out the rights and obligations of each party in the event of a split so there will not be a legal mess. That’s like wearing a napkin before you start eating. You won’t make a mess that way.”
Where a joint loan is considered, no one benefits from your ruined relationship, except the bidders in the auction house. Source: freepik
2. Sell the property and split the proceeds in half
I asked Uncle Marney what happened to Bun Kyup Tsy. He said the silly fella tried to sell the house and split the proceeds between him and his ex-wife. That is certainly the most straightforward solution, but here comes the problem.
His divorce from Chea Tha Thui was not amicable. He told her the Vietnamese Pho Noodles she cooked were actually terrible, and he lied about the taste to make her happy. She did not like it! Hence Chea Tha Thui did not agree to the sale of the house, and Bun Kyup Tsy could not sell it. A little takeaway wisdom from this story is that you should be nice to your joint loan partner. Without their cooperation, this mess will turn to hell.
3. Buy off your partner’s share
Since Bun Kyup Tsy is rich (although he has made many terrible financial decisions in the past), he then decided to take on the full financial burden of the home loan by buying off Chea Tha Thui’s portion. Chea Tha Thui, of course, will need to give up her ownership of the property and this will require not only her approval but also the bank’s.
Bun Kyup Tsy managed to get her to talk to him after he sent an apologetic text saying that the Pho noodles she cooked were actually delicious and that he lied about them being terrible. Finally, an agreement had been made and a fiasco was averted.
4. What about the bank?
Uncle Marney said Bun Kyup Tsy went to the bank to complain about his wife not paying her share. The loan officer in charge was very sympathetic, and he even cried a little into his pink handkerchief with the cute, little Public Bank logo stitched into it.
But the sad truth remains that all parties bound by the joint loan are liable to service the loan. Whether the parties involved are divorced, separated or living happily ever after is irrelevant to the bank. According to Uncle Marney, the bank has the right to pursue both parties either jointly or individually for payment.
5. So much love and heartbreak in a joint loan story
It is undeniable that a joint loan is the greatest test of your relationship, right below the possession of the remote control for your television. Couples know how tough it is to compromise when the man wants to watch football while the wife wants to watch the Chinese drama where the emperor has many concubines that stab each other in the back. Hence if you want to make a real commitment to your significant other, don’t put a diamond ring on her finger. Just say this to her, “Hi dear, let’s take a joint loan together.”