Can I stop a vehicle loan from being reported on my credit report if the vehicle was awarded to my wife in our divorce?

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Can I stop a vehicle loan from being reported on my credit report if the vehicle was awarded to my wife in our divorce?

She is responsible for making the payments which she cannot.

Asked on July 8, 2011 under Bankruptcy Law, Alabama

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The divorce degree is only binding on you and your wife. The auto lender was not a party to the action. As far as it is concerned, if you both signed the loan then you are both "jointly and severally" liable for its repayment. This means that if one borrower doesn't pay the other must. Consequently, if your ex doesn't make the payments the vehicle may be repossessed and auctioned off. In the event the sale price is less than what is owed on the loan you will be responsible for paying the amount of the deficiency. However your ex wife, by virtue of your divorce decree, will be liable for reimbursing you for any costs that you incurr as a result.

As for your credit report, since you are still a borrower on the loan, the lender may rightfully report the loan status on your credit report. If that entails negative notations I'm afraid you really can't stop this. However, you can make a consumer statement on each of your reports and explain that your wife was responsible for the payments and defaulted (it's not clear just how much this will help your credit rating). However, late payments are not viewed as negatively as a repossession will be. Perhaps, if your ex agrees, you can get the car from her and make the payments yourself until you can sell the car.


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