Can I Still Be Held Responsible for a Vehicle My Wife Won in the Divorce?

By Rob Jennings J.D.

Married couples frequently accumulate assets and debt in both their names, which can complicate matters in the event of a divorce. A jointly titled motor vehicle can be both an asset and a debt if you still owe money on it. If your wife receives a car that’s titled in both your names as part of a property division award or settlement, the loan and the vehicle can still cause you problems.

Married couples frequently accumulate assets and debt in both their names, which can complicate matters in the event of a divorce. A jointly titled motor vehicle can be both an asset and a debt if you still owe money on it. If your wife receives a car that’s titled in both your names as part of a property division award or settlement, the loan and the vehicle can still cause you problems.

Assigning Responsibility

Typically, the spouse that retains the vehicle also assumes responsibility for the loan against it. If you're handling your case by consent order or marital settlement agreement, you'll want to make sure that responsibility for the loan is clearly distributed to your wife. If you've litigated your case through court and the judge awarded the car to your wife, you'll want to make sure the decree specifies that she will be responsible for the loan. In either instance, you should insist that she not only accept responsibility, but also refinance it into her own name. It's not in your best interests to have your name on a car loan for a vehicle you aren't driving.

Divorce is never easy, but we can help. Learn More

If She Doesn't Refinance

If your wife doesn't or can't refinance the loan, you're still responsible to the creditor for the outstanding balance. Since the creditor isn't a party to your case or agreement, it can't be bound by the agreement. As such, ask the judge to order that if your wife doesn't, or is unable to, refinance the car by a certain date that she will then sell it and apply the proceeds to the loan. If you're settling your case by consent order or marital settlement agreement, make sure the same provision appears in your settlement documents.

Indemnification Clause

Whether the car and loan is distributed by agreement or court decree, be sure to include a "hold harmless" provision with regards to the car loan. A "hold harmless" provision is an indemnification clause, requiring your wife to pay you back in the event that she fails to honor her obligation and the creditor comes after you for the money. This will make it easier for you to bring her back into family court to enforce the order. Furthermore, it can provide you with a layer of protection in the event your wife files bankruptcy.

Accident Liability

In addition to having your name on the loan, you need to worry about your name remaining on the title. You could face a lawsuit if your wife has an accident in the car and your name is still on the title. Unless you want to undergo the expense of having to indefinitely maintain your own insurance policy on the vehicle, insist that your wife change the title as part of the terms regarding property division. Failure to address the title issue could end up costing you even more than the loan itself in the event of an accident.

Divorce is never easy, but we can help. Learn More
What Can I Do if I'm Getting Divorced & Co-Signed on My Ex's Truck?

References

Related articles

Will I Lose My Car if My Chapter 13 Is Dismissed?

Vehicles are one type of asset the court can address during Chapter 13 bankruptcy, but a dismissal won’t necessarily affect your ownership of a vehicle that has been paid off. Since the only creditor who can repossess your vehicle is the one who holds the loan on it, none of your other creditors can take your car. However, if your case is dismissed, you may have to sell some of your assets, including your car, to raise the cash to pay your remaining debts.

What Happens When a Judge Awards a Piece of Property in a Divorce Decree?

Even if you and your spouse can't reach a settlement agreement so your divorce must proceed to trial, the division of marital property is always a process of give and take. Courts typically apportion assets so the value of everything you're awarded is roughly 50 percent of the total. You'll end up retaining some things and giving up others – most individual assets aren't literally scissored in half. This isn't the end of the road, however. After the judge issues the decree, you must tidy up the loose ends and see to the actual transfer of property.

Quitclaim Deed & Divorce in Washington State

In Washington, like all states, real property, like a house, can only be transferred in writing. The document that transfers property is called a deed. Quitclaim deeds are the simplest way to transfer property, but they carry risks that other deeds do not. Unlike warranty deeds, where the person giving the property guarantees that she owns the whole property free and clear, quitclaim deeds make no promises that the property transferred is free of liens or encumbrances, like mortgages. By accepting a quitclaim deed, you are assuming a greater risk than you would if the property was transferred by warranty deed.

Get Divorced Online

Related articles

How to Turn a Car Title Over to a Spouse in Divorce

When a couple separates, they must separate their personal lives, their finances and their property. During marriage, ...

Release of Former Spouse From Liability on a Joint Vehicle After Divorce

If the court awards you the family car in the divorce settlement, it may give you the car loan, too. If you and your ...

Is Husband Responsible for Wife's Car Payments After Saying She Is Divorcing?

Whether you must continue making payments on your wife's vehicle after she announces that she's leaving you depends on ...

Does a Divorce Decree Nullify a Car Title?

A divorce decree is a court order signed by a judge when she grants a divorce. Depending on the circumstances, the ...

Browse by category