Loans and Divorce
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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.
Debt statistics
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
Collection and delinquency rates vary by state. For example, in Maine, 17% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 2%.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.
