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Loans and Divorce

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Bills.com Team
UpdatedMar 29, 2023
After our divorce, my ex didn't pay our car loan. Am I responsible?

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 the car loan and car was repossessed. Approx. $3000 is unpaid. Am I held responsible for that?

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 likely that you will have to pursue this account through a legal process, to force your husband to pay the debt. If you were a joint-borrower on the original account, the creditor will most likely pursue you and your husband to collect on the debt.

Creditors will not accept a divorce settlement as legally binding upon them, and they will pursue the co-signatories if the primary borrower defaults.

To read a longer, more detailed discussion of these issues, see the Bills.com resource Divorce Debt.

Struggling with debt?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2022 was $16.91 trillion. Housing debt totaled $12.26 trillion and non-housing debt was $4.65 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Kansas, 26% have any kind of debt in collections and the median debt in collections is $1652. Medical debt is common and 17% have that in collections. The median medical debt in collections is $849.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.

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