Divorce Law Family Law

Divorce and Title Loans: Who Gets the Car? (US Law)

Dog in carThe divorce process can be an intricate situation that leads to many unforeseen problems, both emotionally and financially. If you were having financial problems before you filed for divorce, there’s a possibility that you may have acquired some considerable debts. Sometimes, people in this situation obtain a car title loan to come up with the money they need to help cover the cost of divorce. If you have recently filed for divorce, there may be some question as to who gets the car when this type of loan is involved. Here are a few things to consider about this scenario.

Paying Back the Title Loan

In a divorce situation, you have to be careful how you handle the debt. If no one pays the title loan back, the lender is going to keep the car. Whoever originally signed for the loan is responsible for the money that was borrowed. According to TitleMasters, you will have 30 days to pay off your loan, and in some cases you may also qualify for a 30-day extension.

If the money does not get paid back within the term of the loan, then the lender has the right to take the car and sell it. The lender will keep any money that is generated from the sale of the car. This means that if you are in the middle of a divorce settlement, you need to make sure your title pawn agreement is paid back before the car gets repossessed and sold.

Settlement and Court Ruling

During the process of filing for a divorce, you and your spouse may try to settle things outside of court. In this situation, both parties may hire lawyers to represent them during negotiations. Both spouses and their lawyers will meet to discuss the terms of the divorce. In these negotiation sessions, you work together to determine what happens to the car, as well as how any other marital property is distributed.

If nothing can be decided in negotiations outside of court, then the divorce court will have to get involved. When this happens, both you and your spouse will present information before a judge. The judge will listen to the information and divide the assets in a way that he or she deems equitable for both parties. The judge may decide to give you the car, or give it to your spouse, regardless of who signed the original loan agreement.

Typically, in a court case, you can make requests as to what type of property you would like to receive from the marital estate, but the decision is ultimately up to the judge. If you want to make sure that you get the car, it is usually better to settle outside of court, where you have more control over the outcome, rather than having a judge decide what’s best for you and your spouse.

Marital Property

When determining who takes possession of a car after a divorce has been filed, you also have to look at whether the vehicle was considered to be marital property or not. For example, if you, as an individual, owned the car prior to getting married, then it would not necessarily be considered marital property, if the car were still in your name. If one of your parents or a relative left you an inheritance without giving any to your spouse, then that is not always considered marital property either. In a situation of this nature, you may be entitled to keep the car without having to compensate your spouse for his or her half. If the vehicle is determined to be marital property, you may have to pay your spouse something for their share of the car.

The divorce process addresses many issues concerning property, finances and emotions. If you have a vehicle title loan while filing for divorce, make sure both you and your spouse understand the terms. The more prepared you are for negotiations, the better the outcome for all involved.

Karla M. Somers is a freelance writer, interpersonal relationship expert, and former family mediator for the state of New York. She is a contributing writer for Atlanta based lenders, TitleMasters.