Bills.com Blog > Debthelp Questions > Loans and Divorce Debt
Tuesday, Mar 27, 2007
Question: My husband and I are separated. His car loan was under both our names. I assumed all bills but that one and have paid all consistently (with no more than 1-2 week late once in a while). He did not pay car loan and car was repossessed. Approx. $3000 is unpaid. Am I held responsible for that?
Answer: This is a very good question... and a very complicated situation. The short answer is that you will likely have to seek legal counsel from an attorney in your area regarding loans and divorce. It is highly likely that you will have to pursue thisAlso, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Anthony DeMangos on Monday 26th January 2009 16:33
My ex wife and I divorced ten years ago. She bought me out of my share in our home. My name is still on the mortgage loan which evidently affects my credit and abilty to get any new loans. My ex wife who has remarried reported she has two more years left on the mortgage and has never missed a payment. What would I need to do to remove my name from the mortgage loan? Thank You
2. Posted by Bill on Monday 26th January 2009 16:41
Your ex-wife would have to refinance the loan only in her name, that is the only way you can get your name removed apart from paying the loan off.
3. Posted by andrew pedder on Wednesday 27th May 2009 01:54
I have been married for 11 years in the last few years i took out a loan for a new car which my wife drives. I had to take the loan out in my name because I own the most money and have the better credit history, the money was paid into my account and I paid for the car, i have kept up with the payments and now we have separated. My wife refuses to give back the car, even though I have offered to but one that is not as expensive. the money made off the selling the car would go to paying part of the loan off. who is responsible for the loan?
4. Posted by Bill on Wednesday 27th May 2009 16:44
As you signed for the loan, you alone will be held responsible for the payments on this loan.
5. Posted by rowan on Thursday 3rd September 2009 20:46
are all loans that are under one name just mean that that person is solely responsible for that loan even though it was used for dual purposes
6. Posted by Bill on Tuesday 8th September 2009 11:48
In general in the US, if Spouse A takes out a loan in his or her name, the creditor will attempt to collect from Spouse A. However, in some states, both Spouse A and B may be liable if the creditor sues both to collect the debt. If divorce is an issue, if the debt was for the benefit of the marital estate, then the court may treat the debt a a joint liability. However, if the debt is for a student loan, then it's a separate liability. This is a tricky area of law where the state of residence of the spouses matters. Rowan, your return address is the UK, and I do not know if family law is handled consistently in England, Northern Ireland, Scotland, and Wales. I recommend you consult with a solicitor (if you are in the UK) or an attorney (if you are in the US) experienced in family law.
7. Posted by Jessica on Monday 11th January 2010 22:22
A student loan in my spouses name, co signed by my father. Am I responsible for the debt, especially if my father released me of the obligation, although it was used for dual purposes in some cases?
8. Posted by Bill on Tuesday 12th January 2010 16:15
If I understand your somewhat cryptic question correctly, your father is a signatory on your spouse's student loan. You want to know your liability for your spouse's student loans. If you plan to continue to be married to your spouse, the answer depends on your state of residence. If you reside in a community property state, you are jointly liable for the debt. If not, it is his separate liability. However, if you are planning a divorce and live in a community property state, the student loan debt is his alone. The fact that your father is a signatory is irrelevant to any liability you may or may not have.
9. Posted by Ryan on Friday 19th March 2010 10:39
I have been divorced from my ex for a year now. In the decree, i was to take responsibility for the payments of the car, however, the loan is solely in her name. I'm not in a situation where i can't afford the car and the bank is threatening to reposes the vehicle. What can i do to get rid of this car? the loan is so upside down that the value of the car only comes within $10k of the loan. Thanks
10. Posted by Bill on Friday 19th March 2010 13:29
Your options are few. You do not mention who was given possession of the vehicle. If your ex-spouse has possession, contact her immediately and explain your situation and that you are about to violate your divorce agreement. She may wish to start making the payments, which you will be obligated to repay her when your financial situation improves. If your ex-spouse is not in possession of the vehicle, you should still contact her to alert her to the fact that she is about to be inundated with collection calls. See the Bills.com resource Voluntary repossession to learn more about your only viable option. Because your ex-spouse is the debtor, she will be obligated to pay the deficiency balance. She, in turn, has a cause of action against you to repay her the deficiency balance.