Sometimes we get phone calls from people (whom we didn’t represent) after their divorce asking us to figure out what happened. It’s common for people to be a bit rattled and confused on their way out of the “family law machine,” especially when they represent themselves.
I was recently asked this question online:
“After a divorce is final, am I still responsible for her debt if I’m a co-signer? I am the co-signer for my ex-wife’s vehicle. I would like to take my name off that account due to the fact that its lowering my credit score by adding more debt. I was told that once a divorce is final all i had to do is call the dealership to get my name off the account, is this true?”
Almost every time there is a question post-judgment the answer is the same. Read the judgment. What does it say? In this case, it is unclear if the judgment is silent on the car issue. If the martial settlement agreement (MSA) said nothing about refinancing the car, then each spouse is jointly liable for the auto loan into the future. Neither would have an obligation to refinance.
This is why you need an attorney. An attorney could have put a clause in the MSA requiring the party keeping the car to refinance it into their name alone. Or the attorney could have required refinancing upon a late payment in the future. Or the attorney could have required sale of the car and paying off the loan upon a late payment in the future. You get the idea. It’s not necessarily that attorneys are geniuses or something, we have just seen these problems before and most people haven’t. Unfortunately for this guy, the family law machine spat out another victim.
Auto loans aren’t the only concern when it comes to cars in a divorce. Who gets which car? If one party acquired a car before marriage, but paid down that loan using community income—is the other spouse entitled to a reimbursement? Yes, most likely. When one spouse gets to keep the more expensive car, does the other spouse get reimbursed for the difference? Yes, most likely. Is there an entitlement to reimbursement when during the divorce proceedings one spouse pays for the car insurance of both parties? Maybe.