Hard loans in divorce.

Hard loans are commercial loan arrangements that are treated as formal debts by the courts when dividing assets during divorce or dissolution proceedings.

Factors that indicate a hard loan include the lender is a financial institution rather than a family member or friend, and there is a formal written agreement with clear terms.

Non-payment or arrears of a hard loan will very likely result in the threat of court proceedings, or actual litigation by the lender to recover the debt. Examples of hard loans include mortgages, bank loans, and credit card debts.

When a loan is classified as a “hard” loan in divorce, it is usually treated as a legitimate debt that needs to be repaid.