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Help! I Need to Get My Ex Off My Car Loan

We’ve had many readers write in after a divorce, asking how to go about separating their assets with their ex-spouse. One of the most common questions is how to remove an ex from a car loan and title. Here’s how to do it.

You’ll need to refinance the auto loan into your own name to get your ex-spouse off the loan. In essence, you’ll be buying the car from your ex-spouse.

The spouse who is responsible for the car loan payments should be the one to assume credit liability. It’s a really good idea to go through this process right away, regardless of what the divorce decree states. Divorce decrees (or court orders) do not release either person from his/her obligations under the original contract of the loan.

[Related Article: The First Thing to Do Before Buying a Car]

That means that if you and your ex-spouse have a joint account, like an auto loan, and if your spouse who is supposed to pay does not, the negative history will end up on both of your credit reports, and those late payments will damage both of your credit ratings. In fact, the other person may not know about the unpaid account until a collection agency calls.

Removing your ex from the title is similar, except that for this step you’ll need to go through the Department of Motor Vehicles (DMV). You both will need to sign a change of title/vehicle ownership form and return it for processing. Check online or call your state’s DMV for details and forms.

In some states you may be able to file a transfer of title between family members (especially if the divorce has not been finalized yet) and in this way avoid another smog certification and paying taxes on the vehicle based on the purchase price. (If you live in the state of California, for example, read more about changing vehicle ownership vs. transferring title.)

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