Your One Stop Resource for Saving Money.
Am I Liable for Debt My Wife Incurred Before Marriage - The Bills.com Blog
Bills.com Blog > Loans Questions > Am I Liable for Debt My Wife Incurred Before Marriage
Am I Liable for Debt My Wife Incurred Before Marriage
Friday, Jul 24, 2009
Question: My wife got a car with her dad, she is the primary, and he cosigned the loan before we got married. We got married 4 months after the car was financed. My question is, if the car is repossessed will they be able to garnish my wages?
Answer: Resolving Spouse A's liability for debt incurred by Spouse B can be tricky, especially when the debt is acquired before the marriage. Family law varies tremendously from state to state, and even the community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin) vary in their approach to answering the pre-marital debt question.With the understanding that your state's laws may trump the general rule, generally speaking because a spouse did not co-sign the loan, that spouse is not a party to that transaction and as a consequence will not face liability if the signor defaults on the loan. Many creditors do not go to the trouble of suing both spouses, as doing so tends to complicate the legal
process involved in obtaining a judgment.
However, as I mentioned, your state may have different rules, and you need to talk to an attorney who specializes in family law in your state to get a more accurate answer that reflects your state's laws and your particular facts.
Let us talk about the repossession. The primary problem with repossession is that the owner will likely be left owing a deficiency balance on the loan, meaning that your wife may still owe a significant amount of money to the lender even though she no longer has the vehicle.
When a vehicle is repossessed, the lender usually sells the car at auction, and applies
However, as I mentioned, your state may have different rules, and you need to talk to an attorney who specializes in family law in your state to get a more accurate answer that reflects your state's laws and your particular facts.
Let us talk about the repossession. The primary problem with repossession is that the owner will likely be left owing a deficiency balance on the loan, meaning that your wife may still owe a significant amount of money to the lender even though she no longer has the vehicle.
When a vehicle is repossessed, the lender usually sells the car at auction, and applies
the amount it receives at auction to the balance owed on the loan. The borrower is generally responsible for any amount of the loan which is not covered by the auction proceeds. The problem is that lenders usually sell repossessed vehicles for significantly less than the cars are actually worth, which can leave a borrower owing thousands of dollars for a vehicle the borrower no longer even owns.
To learn more about auto loans, I encourage you to visit the Bills.com Auto Loans page.
To learn more about spousal liability of credit card debt, read Is My Spouse Liable for My Credit Card Debt?
I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com
To learn more about auto loans, I encourage you to visit the Bills.com Auto Loans page.
To learn more about spousal liability of credit card debt, read Is My Spouse Liable for My Credit Card Debt?
I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
Submit questions/comments about this post:
Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2009Bills.com LLC. All Rights Reserved.