I got a divorce in 2001 and the judge split our bills giving my (now ex-) spouse the car. In 2003 the car was repo'ed. Now in 2009 they are garnishing my wages. What can I do?
Your very brief message leaves many important facts open to deduction, assumption, and guesswork on my part. I also do not know your state of residence. Therefore, you should consult with an attorney in your state who has experience in family law or consumer law to learn your rights and liabilities.
I will deduce from your message that the car your (now ex-) spouse was given in the divorce settlement was financed and you were either the primary borrower or a co-signatory on the loan. It is also not a major leap of logic to conclude that along with being given custody of the vehicle your spouse was required to make the payments on the vehicle, which he or she did not. Apparently he or she did not refinance the vehicle loan, whereby he or she would have removed you as a signatory.
A divorce decree does not trump the contract terms in a loan. The contract was agreed to when the loan was signed by you and your spouse. The divorce did not rewrite the contract. You may ask, "But doesn't the divorce decree trump the loan contract?" No, it does not. Unless a court actually enters into an agreement to change its terms, an existing agreement remains in effect regardless of a subsequent divorce decree. The divorce is a new agreement between the spouses regarding their financial responsibilities, but it is not binding on third parties.
It is unfortunate that your ex-spouse defaulted on the vehicle loan. As a (presumptive) co-signatory, you were responsible for making the payments when your ex-spouse defaulted regardless of your divorce. I would be surprised if you were not notified of the default. I would also be surprised if you were not notified by summons that you and your ex-spouse was sued by the creditor for a breach of contract. I would be equally surprised if you were not contacted by the judgment creditor following the hearing to negotiate a payment plan. If you are surprised by the garnishment order, then you were not adequately notified by the court and plaintiff. If this is so, contact an attorney in your state who is experienced in litigation to discuss your rights and options to vacate the judgment and resulting garnishment.
Your options are few if you were notified of the default and subsequent hearing and took no action. First, contact the creditor and open a negotiation to work out a lump-sum payment to settle the debt. The judgment-creditor is under no obligation to negotiate at this point, but may if you have a lump-sum to offer.
Keep careful records of your costs regarding the garnishment. When the debt is resolved, consult with an attorney about filing a lawsuit against your ex-spouse to recover your costs and damages resulting from him or her failing to perform under the terms of your divorce agreement.
To learn more about the rights of creditors and debtors, see the Bills.com resource Collections Advice.
I hope this information helps you Find. Learn & Save.