Recently on our legal forum a user asked, “If I breakup with my boyfriend and we have a car loan together what can I do to make sure his name is removed from the loan documents? I know he owns half the car, but I am afraid he will stop making car payments. The car belongs to both of us but I want to keep it. Can you help?”
Break-ups are tough. Not only do you have to deal with the heartache of a failed relationship, but if you have shared assets you may also have to decide who gets the car, house, and other valuables.
Removing your ex-boyfriend’s name from a car loan
Unfortunately, ending a relationship does not mean you can immediately abandon your financial obligations with your ex. If you and your boyfriend purchased a car together you both have a financial responsibility to ensure the car payments are made according to the car loan agreement.
Breach the car loan contract by failing to make payments and the creditors will come after both of you to recover current and past car payments, regardless of the status of your relationship. Unfortunately, as long as the car loan is in both you and your ex-boyfriend’s name, you and your ex will be financially obligated to meet the terms of the loan agreement.
This could especially troublesome; however, if your ex decides he is not only done with the relationship but also doesn’t want to honor the car loan contract. If this occurs, you may be left making car payments on your own, but he would legally own half of the car.
If both of you decide to stop making car payments the car could also be repossessed by the creditor and sold at auction. Unfortunately, depending on how much the car is sold for and your state’s laws, you and your spouse could be responsible for paying money owed on the loan (the deficiency judgment) if the car sells for less than the loan amount.
Not only would you not have the car anymore, but you would have lowered your credit score and your credit report would indicate that your car had been repossessed.
Can I refinance the car in my own name?
So what can you do to get your ex off your car loan? Assuming you currently have a decent credit score, you meet the income requirements, and you want to keep the car and your ex doesn’t, you may be able to refinance the car loan in your name only.
Talk to your ex about this option. You may need to determine the value of the car and what percentage your ex “owns.” Make an offer to compensate him for his share of the car. Then discuss your options with a lender.
If your ex boyfriend refuses to allow you to refinance the car in your own name you also have several options. You can continue to own the car together- not recommended, or you could talk to him about the option of selling the car.
If you do decide to sell the car you will have to talk to your lender about the process to fully pay off the car loan. Keep in mind; you will have to pay the full pay-off amount of the car before the lender will relinquish the title to you. You then would have to transfer the title of the vehicle to the person who bought the car. It’s a bit more complicated then selling a car with a clear title, but it can be done.
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