what happens to car loan during divorce

by Ena Parker Published 3 years ago Updated 2 years ago

What happens to car loan during divorce?

Refinance the Loan. Let's say you want to keep the car for yourself—or your spouse wants it.
Sell the Vehicle.
Make Adjustments for the Car.
Pay Off the Loan.
Get the Courts Involved.

Full Answer

What happens to your car when you divorce your spouse?

May 30, 2014 · Options for Handling a Car Loan During a Divorce. Refinance the Loan. Let’s say you want to keep the car for yourself—or your spouse wants it. The prudent thing to do is to have the loan refinanced. Sell the Vehicle. Make Adjustments for the Car. Pay Off the Loan. Get the Courts Involved.

Who is responsible for a car loan after a divorce?

Jan 12, 2020 · What happens to car loan during divorce? Refinance the Loan. Let's say you want to keep the car for yourself—or your spouse wants it. Sell the Vehicle. Make Adjustments for the Car. Pay Off the Loan. Get the Courts Involved.

Can I refinance my Ex’s car loan during a divorce?

Timothy's Answer: When a loan or credit account is established in your name, even as a co-signer, you will be held responsible for the repayment of the debt, regardless of the reasons you did so. The same applies for the auto loan you assumed. It …

Can I get my ex-husband's car loan if we separate?

Feb 12, 2020 · Generally, whatever vehicle you usually drive will end up remaining your property within the divorce. This gets a little more complicated if there is a loan on that vehicle that is in your ex-spouse’s name. In those cases, the person keeping the car may have to obtain a loan to pay off the prior balance and put it in their own name.

How are car loans split in a divorce?

As long as both of your names remain on the account, the creditor can go after both of you for payment. So, if your spouse agrees to pay off the auto loan since they're driving the car and he or she skips payments, the bank can go after you for payment if you're still on the auto loan.Apr 6, 2020

Is a car loan an asset in divorce?

Figuring out how to divide your vehicles in a divorce is a little trickier than splitting cash accounts or household goods. When the goal is an equitable distribution, it's crucial you have an accurate value. A financed vehicle can be considered an asset but only if its value is greater than the amount you owe on it.

How do I get my name off of a car loan after divorce?

To remove your name from a car loan, there are really only three paths to take – refinance, sell the car, or pay off the loan. Even if you're divorced from your co-borrower and don't drive the car anymore, you could still be held responsible for the loan unless you officially remove your name from the title.

Who keeps cars in a divorce?

California is a community property state, meaning that all community property and debts that are acquired during marriage, including real estate and vehicles, are considered to be the joint property of both spouses and are distributed equally.Mar 21, 2017

Is spouse responsible for car loan?

If your name is on a car loan as a co-borrower or cosigner, you can expect the lender to hold you responsible for continuing payments. Liability for the loan falls to you. That means the lender can take steps to recover the money if you fail to make payments on time.Jan 11, 2022

Can my husband take out a loan without me?

A lender cannot place a lien without getting the property owner's consent. This means that your spouse must sign the mortgage contract as a property owner if you take out a loan against a property that you jointly own.

How do I get my ex wife off my car loan?

Refinancing is the only way to remove a co-borrower from an auto loan. However, if you want to get your name off the car loan, your ex needs to qualify for refinancing and prove they can afford the payment on their own.

Am I responsible for my husband's debt if we are separated?

The general rule in California is that a spouse ceases to be responsible for any debts incurred by the other spouse once they have separated.Jun 18, 2018

Can I refinance my husband's car in my name?

Most banks will allow you to initiate a loan transfer by having the recipient of the transfer refinance the vehicle and sign their name to the new loan. Another option would be to sell it to him for the amount of the outstanding loan, and then he can take out a loan in his name for that amount.Sep 16, 2017

Can my ex take my car if it's in my name?

Brette's Answer: If the car is in his name, he is the legal owner. While the divorce is pending, you can ask for a temporary order giving you possession of the car, since anything bought during marriage is a marital asset. You need to find a way to work out an agreement with him.

Are cars included in divorce settlements?

The way that a car is dealt with in a divorce settlement will depend upon what other marital assets are held by the parties. If cars are retained by one party then this will impact the overall distribution of the matrimonial assets.Mar 17, 2016

Should I buy a car before or after divorce?

If you actually weren't separated, your major purchase will end up getting split down the middle during the divorce. Unless you don't mind sharing your new car with your ex, it's best to put off making any large purchases before your divorce is final and consult with a Sacramento family law attorney.

How do I make him responsible for paying the auto loan?

Nancy's Question: His car loan is in my name (I had to cosign), as it shows up on my credit report, even though the bill is addressed to him? How do I get this debt out of my name, or make him responsible for paying for it?

Am I responsible for the car loan if it's in his name?

Alexandra's Question: My soon to be ex purchased a car for me during our two years together. He made the payments since I was not earning much money. I recently purchased a car for myself, and am trying to get him to take responsibility for the old car.

Is a 50/50 split fair?

Equitable distribution means “fair” – usually, fair is considered a 50 /50 split, but there may be reasons that a 50/50 split would not be fair. In those cases, the Court can order an unequal division. For the most part, the court considers vehicles as marital property. Therefore, the family cars would be subject to division in the divorce.

What is marital property?

Marital property encompasses all assets secured during a marriage. If a couple purchases a family car after they marry and later decide to get a divorce, the vehicle, as well as any outstanding loan owed on it, may be subject to equitable distribution. Most families today have more than one car.

What is equitable distribution in Massachusetts?

Can a spouse repay a car loan after divorce?

First, be aware that your lenders might not acknowledge everything you agree to during the divorce process. 1 One spouse may be responsible for repaying certain loans after divorce (even joint debt, such as a car loan applied for by both partners).

How to get a mortgage after divorce?

There are two ways to keep your credit safe after divorce. 1 Discuss these strategies with your attorney before taking any action: 1 Get your name off the loan (by refinancing or having your name removed). 2 Arrange to pay the lender in full.

Is divorce a long process?

Divorce can be a long and challenging process. You need to make decisions about everything from mundane details to highly-charged topics. That includes debt that you took on jointly with your spouse. Don’t just assume that your divorce decree will split loans up the way you expect.

How to keep credit after divorce?

1 Discuss these strategies with your attorney before taking any action: Get your name off the loan (by refinancing or having your name removed). Arrange to pay the lender in full.

Who is Justin Pritchard?

Justin Pritchard, CFP, is a fee-only advisor and an expert on banking. He covers banking basics, checking, saving, loans, and mortgages. He has an MBA from the University of Colorado, and has worked for credit unions and large financial firms, in addition to writing about personal finance for nearly two decades.

Can you separate yourself from your ex?

It’s best to separate yourself from shared loans that your ex is supposed to repay. Even if you trust the other person completely, they could die or become disabled temporarily, placing the debt back on your shoulders (although life and disability insurance that you own could solve that problem).

What to do when you are divorced?

The most important thing to do during a divorce is to manage your debts proactively and never just assume they’re being paid off. You need to keep an eye on loans as long as your name is attached to them, recognizing that loans may be around for many years after your divorce.

What happens if a woman doesn't qualify for a car loan?

Talk to them about what you can do. If she doesn't qualify, you may be stuck with your name on the loan. You could sell it to pay the loan off.

Can a creditor release a party?

Generally, a creditor will not release one of the parties because they have no incentive to do so. You will be released if the loan is refinanced or the car is sold and the note paid. I suggest you hire a lawyer to discuss the specific facts of your case.

What to do if you don't have an attorney for divorce?

Explain the situation to your divorce attorney and have this dealt with in the judgment, if you do not have an attorney then call my office, or another attorney, and engage one.

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