I recently received the following question in an email from a client, it is a question I get asked frequently and though I would share my standard response.
Client: "I was just informed that the car that (my wife) has is being repossessed....most likely, a repo guy showed up at the house. The vehicle is I both our names....will the Divorce settlement remove me from responsibility? Can a provision for this be added?"
The way that it works with assignment of debts in a divorce is this: If you are on the loan then the loan company is in contract with you, meaning, that unless they release you from that contract (i.e. allow your wife to assume the debt) they can come after you. That said, you can agree with your wife that she is responsible for that debt and she can sign paperwork guaranteeing that she will be held liable for the debt, but, that agreement is between you and your wife it does not involve the loan company. So, if she does not pay the debt, then the loan company is going to come after you. They will have the ability to secure payment through any legal method, usually for a car means repossessing the car and if there is still a deficiency then coming after you for the remaining balance. However, if she has agreed to assume liability for the debt then you would have the ability to sue her to compensate you for the amount you lost.
If you need guidance through the division of assets and debts in divorce, please contact Solaris Law Group for a free phone consultation.