How are car loans handled in divorce?
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How are car loans handled in divorce?
When going through a divorce, some states may award you funds to pay off the remaining amount of your auto loan. Review your divorce decree to see if it contains a Hold Harmless Clause. This is when the law requires you to hold your former spouse harmless on any remaining joint vehicle debt.
Is spouse responsible for debt after divorce?
The person who borrowed the money is the person responsible for paying the debt. Even if the debt is under one spouse’s name, but the other spouse spent the funds, it doesn’t matter to the creditor. If debt payments continue to be paid following the divorce, then the debt won’t be an issue.
How is debt shared in divorce?
As part of the divorce judgment, the court divides the couple’s debts and assets, while deciding who is responsible for paying specific bills. Each state has its own laws for dividing debts and assets. Some states consider the assets and debts each spouse brought into the marriage.
Who is responsible for marital debt?
If you live in a community property state, you can be held responsible for debt incurred by your spouse even if you were unaware of the debt and did not sign an agreement with a creditor. In other words, in a community property state marital debt is considered joint debt — debt that you are both responsible for.
