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If you’re facing divorce or separation from your spouse, there are a few things to consider before making any decisions about your cars and removing your spouse from your car insurance.
The state where you live and local laws will ultimately determine how property is divided during a divorce proceeding. The kind of car, who drives it most, and who owns it can all factor into this decision.
Divorce isn’t easy and getting ready for what might be coming ahead can help reduce stress and anxiety when the time comes. Keep reading to learn everything you need to know about cars and divorce so that you can prepare if necessary.
How are cars divided in a divorce?
Cars are often split up in divorce cases, depending on a number of factors. If the car was purchased during the marriage, it is considered a marital asset and is subject to equitable distribution, the most fair division of assets possible based on the court’s judgements.
In community property states, all marital assets are divided equally between spouses in a divorce by a judge.
Criteria for Selection
When a couple gets divorced, they have to decide who gets the car. However, in other states, the court may decide who gets the car based on a number of factors, including who needs the car most and who can afford to keep up with the payments and insurance.
In some cases, the car is community property and each spouse gets half. In other cases, the car is marital property and the couple has to decide who gets it based on equitable distribution.
To recap, if the car was purchased during the marriage, it is considered a marital asset. If the couple lives in a community property state, then the car is automatically split evenly between the two spouses. However, if they live in a non-community property state, then they will have to decide who gets the car based on equitable distribution.
Who decides who gets the car in a divorce?
The divorce process can be a very stressful and difficult time for both spouses. One of the biggest decisions that has to be made during a divorce is who gets to keep the car.
In most cases, the car is considered a marital asset and is subject to division during the divorce process.
In a divorce, the question of who gets to keep the car can be a contentious one. If the car is considered a marital asset, then it will be subject to division during the divorce process. However, if one spouse owned the car prior to the marriage, they may be able to keep it if they can prove that it is separate property.
In some cases, spouses may be able to agree on who gets to keep the car. If they are unable to reach an agreement, a judge or mediator may need to decide.
If one spouse wants to keep the car but cannot afford the payments, they may need to refinance in order to keep it.
What happens to joint car loans in divorces?
If you have a joint car loan with your ex-spouse and you get divorced, what happens to the loan? It depends.
If you and your spouse agree that one of you will keep the car and the other will sign over their rights to the vehicle, then you can refinance the loan in your name only.
If your divorce decree awards the vehicle to one spouse or the other, then that spouse can choose to keep the car and assume responsibility for the loan, or they can sell the car and pay off the loan.
If one spouse wants to keep the car but can’t afford the payments, they may be able to refinance the loan in their name only.
When is a vehicle not considered marital property?
In some cases, a vehicle may not be considered marital property. For example, if the vehicle was purchased by one spouse before the marriage, or if it was a gift to one spouse from a third party, then it may not be considered marital property.
If the ownership of the vehicle is in dispute, a court may need to decide.
Influential Factors on Asset Division
Asset division is often a contentious issue in divorces, as each spouse may want to keep certain assets for themselves. There are a few key factors that can influence how assets are divided in a divorce.
- The first is whether the divorcing couple owns any marital property. If they do, this property will need to be divided between the two spouses in the divorce agreement.
- The second factor is whether either spouse has any outstanding debt. If so, the spouse with the debt may be responsible for paying it off after the divorce.
- The third factor is whether either spouse has car insurance or a car payment. If so, this may be taken into account when dividing assets.
Ultimately, the decisions about asset division will be made by the divorcing couple and their lawyers, with the goal of reaching a fair and equitable agreement.
You Can ‘Buy Out’ Your Spouse
If you’re considering buying out your spouse (paying them their fair share of asset value compensation in exchange for the rights to those assets), there are a few things you need to keep in mind.
First, you’ll need to determine who gets to keep the car. If you’re both on the loan, you’ll need to either sell the car or have one of you refinance the loan in their name.
You’ll also need to consider any debts or reimbursements that need to be made. If you have joint debt, you’ll need to figure out who will be responsible for paying it off. If you are asking for freedom in your relationship, you need to consider financial freedom as well. You may also need to reimburse your spouse for any contributions they made to the home during the marriage.
Finally, make sure to protect your credit score. An ex-spouse can ruin your credit if they don’t make car payments or don’t keep up with the vehicle loan in their name. Notify your creditors about your situation if your ex-spouse is tanking your credit score and consider refinancing any loans in your name only.
Author Bio:
Luke Williams writes and researches for the insurance comparison site, Clearsurance.com. His passions include insurance and helping married couples effectively navigate divorce.
