Back to: Code of Banking Practice

 

We recognise the difficulties for anyone, especially our customers, when they are involved in family law proceedings. Where those proceedings involve matrimonial property or financial obligations, those proceedings may involve us as your bank.

For example, where you have joint debts (such as credit cards, personal loans and home loans), and a jointly owned matrimonial home, the court may order us to release one of you from a joint debt. When the court makes such an order it will take into account our views on each spouse's individual capacity to repay the debt, and may seek further information on this from us.

If we receive such an order we will where appropriate, 're-originate' the debt. This means that if for example you have a home loan account in both of your names, that loan account may be closed, at which point the spouse who will be solely responsible for the debt will need to apply for a new replacement loan in his or her name only.

Alternatively in some circumstances the existing joint loan account may be able to be transferred into one of your names.

In circumstances where a court does not make such an order on the bank, and you want to transfer a joint debt into only one of your names, you will need our consent. Even if you both agree that only one of you will be responsible to repay the debt, we still have the right to require either or both of you to repay it (except of course where we have agreed to the change to who is liable to repay the debt or, a court has ordered us relieve one of you of your obligation to repay the debt).

Guidelines for parties involved in family law proceedings
These guidelines aim to assist you with:

• Understanding what will happen if a court makes an order concerning a joint debt;
• Applications for transfers of mortgage and consents to transfer of title; and
• Understanding how we enforce debts affected by a family law property settlement

The guidelines will assist you (our customers), your legal advisers and your representatives who may be involved with family law property proceedings. That may include agreements for division of property owned by you as a married couple, the division of your joint property that is subject to a mortgage to us, or of any other debts or liabilities you may jointly or individually owe to us.

In the guidelines, when we refer to a liability to us, we are referring to the liability to us of a borrower and/or of a guarantor.

Guidelines for parties where the court has made an order on the bank.

Guidelines for parties where no court order has been made on the bank and the parties wish to transfer a debt into one name.