Divorce Guide

Divorce Guide


Divorce and Auto Loan Debt


A divorcing couple’s issues of concern are surely not over, even after the divorce is official. An auto loan debt during a divorce is known to be quite bothersome in nature. While handling auto loan debts, you should know of the legalities involved with same. You should be aware of your personal debt and your husband’s debt.

Divorce and Auto Loan Debt-

If the debt was signed by you, regardless of the main reasons for you doing the same, you would be liable to pay the debt. Since it is mentioned on paper, you also hold responsibility of paying debt amount to the company. In the same process you could work towards reclaiming the automobile or get your ex-husband to buy the automobile from you. If you want your spouse to purchase the vehicle, you would both have to work on some sort of negotiation.

In cases of non-cooperation from your husband, you would have to continue the payments towards the automobile or get the required help from a qualified legal attorney. If you don’t want to keep the car, you can sell the car through a dealer or on your own.

Dealing with a joint auto loan debt-

Even after the couple is divorced, there are some financial obligations which have to be met. During divorce it is important to give every single detail which is linked to the debt. All the details should be addressed on a written document.

The most suited action would be to try and sell the automobile. If you sell the vehicle before your divorce is finalised, it would be much better for you and your ex-husband. During the process, you would still be liable to pay the dues. Refrain from ruining your credit at any cost.

The second course of action which can be initiated is by getting either spouse to refinance the car in their own name. If your ex-husband wants the vehicle get him to obtain new financing for the vehicle in his name.

There would be a formal loan procedure which would be required to be followed and understood. One would have to qualify to receive financing.

During the process, do not take your name off the title. Removing your name from the title would only remove ownership and not debt responsibility. If you get your name withdrawn you could land yourself in a dodgy situation. You would not longer be able to split the equity in the vehicle.

Some steps which should be taken are-

  1. Put a limit on how long your ex-husband can have possession of the vehicle prior to it being refinanced or sold.
  2. You must notify the car finance company of your change of address.
  3. Get the car finance company to have all the statements sent to your current address.
  4. Co-operate with the present situation and avoid domestic violence

Always remember, if you have signed an auto loan contract, it would entirely your responsibility to pay for the automobile. You would have to ensure that the payment is completed at your end.


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