Divorce and Auto Loan Responsibility

The following information about divorce and auto loan responsibility can help you understand what your options are when dividing marital assets and debts.

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?

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 does not matter that the bill has his address on it. You too are responsible for the entire loan amount. You should also reclaim the automobile or at the very least, have him purchase it from you. 

In the latter, you then can pay off the loan in your name and he would then own the vehicle outright. If he does not cooperate, you can either keep paying for his car (which I can only assume you don't want to do) or you can get help from law enforcement in reclaiming the vehicle from him. If you don't need or want the car, you can then sell it on your own or to a dealer. The dealer however, will not pay you as much as you could get by selling it on your own.

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 it my responsibility to cover the payments or any loss he may experience in selling it? The loan and registration were all in his name.

Timothy's Answer: Your ex purchased and registered a vehicle solely in his own name. During the period you were together, he allowed you to use the vehicle and made all the required payments. Today, you are no longer together and therefore should not expect to be able to use the vehicle unless the two of you had otherwise reached some sort of agreement.

As far as who is responsible for the making payments on the vehicle, you are not responsible for making payments on a vehicle he purchased. He is the registered owner of the vehicle and thus is responsible for not only making required payments, but also to insure the vehicle and keep it registered. If he no longer wants the vehicle and decides he wants to sell it, you would not be responsible for any loss he may incur, nor or you entitled to any profit. It is his vehicle and thus he bears all the responsibility automobile ownership brings.

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