In our last post, we were discussing how you could be forced to pay a for a car that your former spouse had been assigned in your divorce.
You may be outraged by this, believing your divorce agreement made them responsible for this vehicle and its debt. Technically, in this situation, you would pay the remaining deficiency balance and then sue your former spouse under the terms of the divorce agreement.
As you may have guessed, the problem with this scenario is that it may cost as much to bring the legal proceeding against them as you could recover. Additionally, if they filed bankruptcy, they may have few assets and little income, and collecting your judgment could be a problem.
This is why it is important as part of a divorce agreement to refinance any vehicle with a significant term remaining on its loan. It is true this can increase the difficulty and complexity of obtaining a settlement, but it is far safer that hoping that they will keep making the payments for another 40 or 50 months.
Property settlements during a divorce may be complex to deal with, but it is important to work through all of the details before the final order is entered by the judge here in Columbia. Issues like car loans, mortgages, insurance, dividing credit card debt all need to be resolved before your divorce is final.
Many aspects of your property settlement cannot be modified after your divorce is final. So you want to make certain you have done it properly the first time.
Divorce places many strains in finances and some wind up in bankruptcy. You do not want to suddenly find you owe thousands of dollars on a vehicle your former spouse has been driving but can no longer afford.
Source: theexaminer.com, “Divorce does not change obligations on a car note,” Richard Alderman, June 13, 2016