A franking lawsuit after divorce - will it work?

The answer to the question posed in the title is clear - it will work, although half-jokingly and half-seriously, it is nowadays said that a mortgage binds more than a marriage.

Indeed, even after the marriage and the financial bond that goes with it have ended, the joint mortgage remains part of the divorced couple's new reality. The decision to fight for the annulment of an unfair contract for a foreign currency-indexed loan can be theirs alone as well as together.

Separately, but nevertheless together

It should be borne in mind that when taking out a mortgage loan during marriage, as a rule, both spouses become debtors to the bank. The bank can recover the amount of the loan from each of them individually or jointly. The situation is analogous for divorced couples. Each of them may decide to sue the bank for the cancellation of a credit agreement granted in foreign currency, or they may do so jointly. It all depends on their relationship after the end of the marriage. Indeed, the ideal scenario is to put aside the differences and disputes that contributed to the break-up of the marriage and sue the bank together. Then, in the event of a win, any sums ordered from the bank in favour of the borrowers would accrue to them jointly and be divided equally. At the same time, they are both relieved of the obligation to repay the remainder of the loan.

‘The power of evil against one’

Unfortunately, most divorces do not end with the maintenance of at least a correct relationship between the former spouses. Compromise and a joint court battle against the bank is sometimes even impossible. This does not mean, however, that a divorced borrower cannot, without the involvement (or even knowledge) of the co-borrower, sue the court for the payment of overpaid capital and interest instalments. In view of the separation of property that has arisen as a result of the divorce, he may request an order for payment of a designated amount, corresponding to his or her share (half) of the above amount. At the same time, in the event of a victory in the grounds of payment judgment, the court may prematurely declare the agreement invalid, without ruling on this in the operative part.

Invalidity difficult to obtain alone

The situation is different in relation to a claim for the invalidity of the entire loan agreement. Unlike an action for payment of the amount of overpaid instalments, in the opinion of the Court of Appeal in Warsaw, the court hearing such a case must find that the participation of the other former spouse is necessary in the case and summon him or her to participate. At the same time, there is a different theory in the jurisprudence of the Supreme Court, according to which only one borrower can sue the bank for the annulment of the loan agreement. Consequently, this divergence also translates into a different approach of the individual District Courts, which, according to their own discretion, may opt for one or the other position.

Unfinished business

Undertaking a post-divorce battle against a bank that has granted a fraudulent valorised loan can be complicated. However, given the risks faced by a borrower taking it on alone, it is most beneficial to get along with the issue with the ex-spouse and sue the bank together. By leaving this issue unresolved, borrowers may irretrievably lose the opportunity to free themselves from the burden of an illegally granted loan.