Your Auto Loan after a Divorce

Get Car Financing
Even with poor credit.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - December 20, 2018

When you’re dealing with divorce, you and your former spouse are still responsible for any shared loans and joint debt, such as a car loan. A lender isn’t going to be concerned about the divorce – they want to make sure you and your ex-spouse pay on time. Deciding who gets what during a divorce can get tricky, and there are ways you can protect your credit if you need to split up a shared auto loan.

Getting an Auto Loan After Divorce

If your name is on the car loan, you’re considered a co-borrower. You’re equally responsible for making sure it gets paid on time. In a divorce, a judge determines who gets the vehicle and who must make the payments. Even so, both parties remain legally responsible for the loan payments, because the divorce decree was made outside the loan contract. This can be tough to deal with if your ex-spouse decides to stop paying for your car without letting you know, and you receive an out-of-the-blue notice that you’re behind on your loan.

At that point, you need to take action to prevent your credit from taking a nosedive. The lender is going to go after you and your ex to make sure they get paid. If neither of you do, both your credit scores drop, and the vehicle gets repossessed.

How to Protect Your Credit

The best way to avoid sharing a car loan with an ex-spouse is to remove your name from the loan. You aren’t going to be able to simply remove your name because an auto loan is a contract. So, what do you do? You refinance the existing car loan. Auto refinancing is a great way to add or remove someone from a car loan, and possibly get a better interest rate. But refinancing isn’t going to work if you aren’t able to qualify for an auto loan.

CarsDirect Can Help if You’re Interested in Refinancing »

You have to meet the lender’s income and credit requirements in order to refinance without the help of your ex. If you fear you can’t qualify on your own, you may be able to add a cosigner to improve the odds of an approval.

Getting a Car after Divorce

Going through divorce is never easy, and it can get complicated if you have to divide or give up certain assets, like a vehicle. The key is to communicate with your ex and your lender. As long as everyone’s on the same page, you shouldn’t have an issue with defaulting and damaging your credit.

If you had to give up your car and are suffering from damaged credit due to divorce, or are simply dealing with poor credit and need a vehicle, let CarsDirect help. We work with a nationwide network of dealerships that specialize in helping bad credit car buyers get the financing they need. All you need to do to get matched with one in your local area is fill out our auto loan request form.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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