Any vehicles that you obtain during your marriage, or that you use marital funds to pay for, can constitute marital property under Georgia law. All marital property, including vehicles, can be equitably divided by the court in a divorce. However, when vehicles are encumbered by vehicle loans, the couple also must deal with payment of the outstanding debt that is secured by the vehicle.
The general rule is that if a spouse decides to keep an asset, such as a vehicle, in a divorce, then he or she also will be responsible for paying any debt that is owed on that asset. Therefore, if your car has an outstanding loan balance, and you want the car in the divorce, then you are likely going to be responsible for the loan payments.
However, in divorces involving more complex property division, it is possible that one spouse might have to pay the loan on the vehicle that is awarded to the other spouse. This situation is usually the result of negotiations between the parties in order to reach a settlement of all issues related to the divorce.
There is one important issue to keep in mind when dividing vehicles and vehicle loans in a divorce. If you and your spouse have a joint loan on a vehicle, and he or she fails to make the payments on the loan as ordered by the court, you could still be held responsible for the outstanding loan balance. This is the case even if your spouse, and not you, has possession of the vehicle. The creditor, or the bank or financing company to whom the loan is owed, is not bound by the terms of your divorce decree. If your name is on the loan, then you are jointly responsible for the loan balance. The only solution to this problem is to ask for possession of the vehicle and make the payments yourself, or to ask the court to order your spouse to refinance the vehicle loan in his or her own name. The refinancing, if it is a possibility, would remove your name, and thus your financial responsibility, from any loan related to the vehicle in question.
An Atlanta divorce lawyer at Shaw Law Firm LLC can help advise you about the difference between marital and non-marital property, as well as how your marital property is likely to be equitably divided, including any vehicles.Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.
Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.