New Wheels: Cars after Divorce
What I’m going to tell you may sound cynical, and you may hate me for it, but before you go out and buy a vehicle in your name for a spouse or co-sign with them its good to be aware of the risks associated with car payments during divorce.
It’s very difficult to refinance a vehicle after a divorce
The Court doesn’t usually Order that automobiles be refinanced, so that means the car note will stay in your name even if the other party is driving it.
What if my ex-spouse has a car in my name?
If the car is awarded to one party but the debt is in another person’s name, the creditor doesn’t care who was awarded the car. They only come after the person liable for the debt.
Will it affect my credit?
Every late payment or missed payment is going to show up on your credit report even if you aren’t responsible for the payment due to the divorce decree and aren’t driving the car.
Doesn’t the divorce decree make them responsible for the vehicle debt?
The standard clause regarding vehicle debt is to the effect “the party will be responsible for the debt and hold the other party harmless”. This means that if you are awarded the car and the debt that goes with it, you are to pay it and the other party won’t have to pay. But again, try telling this to the finance company that finances the car. You will have to go back to Court and ask the Court to find the non-paying party in contempt. It can take months or even more than a year to get to court.
Can I make them pay for the cars after divorce?
If the Court finds the non-paying party owes you for car payments you have to make, you most likely will be awarded a judgement against them for the amount due. You have to then collect on the judgement and sometimes the party won’t make enough or have any assets to collect upon.
Can I take back the cars after divorce if they’re in my name?
It has to be written in the papers because property settlements aren’t modifiable. You are going to be stuck with the arrangement as it is as unfair as it seems.
Buying a new car before divorce can be painful
Ask yourself, are you absolutely sure you want to buy that new car?