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 take these things into consideration:
- It’s much harder to refinance a vehicle. 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 driving the car and aren’t responsible for the payment due to the divorce decree.
- 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 judgment against them for the amount due. You have to then collect on the judgment and sometimes the party won’t make enough or have any assets to collect upon.
- What if I want to take the car back once the party doesn’t pay? 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
Are you absolutely sure you want to buy that new car?
Contact our firm at (256) 229-2828 to schedule a consultation or fill out our online form to discuss your case.