Who is responsible for the car debt post-divorce?

Divorce attorney Jason BowmanQuestion:

My wife and I are getting divorced. When we refinanced our marital home, we borrowed against the home equity and bought my wife a car. She is keeping the car in the divorce.

Even though the car debt is tied to the home, will she be responsible for the debt since she is keeping the vehicle?

Answer:

First let me preface my answer by stating that I am not licensed to practice law in your state. Cordell & Cordell has men’s divorce lawyers located nationwide, and you should talk to an attorney in your jurisdiction.

In most states, courts usually assign the debt to follow the asset. Of course in this case, the debt for the car is tied to the home, which can be a problem.

The key in cases such as these is the ability to show that payment for the vehicle did come from the equity in the home and you have documentation to prove it. If you are able to show the judge that money was borrowed against the home to purchase a car, then the judge may apportion the debt to reflect her receiving the vehicle.

You should consult an attorney in your jurisdiction to determine the best way to trace this debt and the most effective way to argue this issue to the court based upon your jurisdiction’s rules and statutes.

 

Jason Bowman is an attorney in the Louisville, Kentucky, office of Cordell & Cordell. He is licensed in the states of Kentucky and Texas. He received his Bachelor of Science in Business from the University of Louisville, and received his Juris Doctor from Texas Wesleyan University.

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