Can my wife sell our new car if her name on the title but my father is the one whose name is on the loan?

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Can my wife sell our new car if her name on the title but my father is the one whose name is on the loan?

My father took a loan out of the bank a couple months ago for $12,00. This was for my wife and I to get a new car. When we got the car, my wife went to the DMV and the title is in her name. She has recently cheated on me and we have separated and we still owe the bank $11,000 over the next 3 years. She has threatened to take the car and sell it and get a new one and leave my dad with this loan. The lender has sent letters to me and my father asking for the title since it’s theirs until the loan is paid off. What legal problems can she face if she tries to do that?

Asked on August 9, 2011 Georgia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Your wife can sell the car you have written about since she is on legal title to it. However, the loan whish is secured by the car made by your father is most likely registered with a commercial code filing with your state's secretary of state's office.

The significance of this filing is that if the car is sold at a dealership, the dealership will check to see if there is a loan securing the car and pay off the lender. The car dealership most likely would not buy the car for any amount less than the loan's balance since the loan needs to be paid off in full for the transaction to occur.

The above scenario only applies to a reputable car dealership.

Your wife could sell the car to some guy off the street for $5,000. However, the unpaid loan in this scenario secured by the car would still remain where the lender could repossess the car if its monthly payments are not kept current.

Good luck.


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