Under what condition may a co-borrower be released from liability after a divorce settlement?

A co-borrower may be released from liability after a divorce settlement when the divorce decree explicitly states that the co-borrower is not responsible for payments. This provision within the decree serves as a legal determination regarding the financial responsibilities of the parties involved. When the court includes language that excludes one party from further liability, it provides a solid basis for the lender to release the co-borrower from the loan obligations.

It's important to note that while conveying rights to the security might shift ownership of an asset, it does not inherently affect the financial liability remaining under the loan agreement. Simply showing repayment of the debt by the remaining party also does not automatically release the co-borrower unless there’s a formal agreement or decree that outlines such a release. The correct interpretation of the divorce decree, therefore, is vital to determining liability post-divorce.