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How to handle a car loan in a divorce

As part of a divorce settlement, a person may be ordered to pay some or all marital debts. This may mean that a Georgia resident is required to make car loan payments even if his or her name isn't on the account. However, if a person's name is not on the account, there is no need to make payments absent a court order.

It is important for anyone who has a debt in their name to make payments regardless of what a divorce decree may say. While an individual may be held in contempt for failing to make payments as ordered, only the borrower's credit is impacted if payments aren't made. In many cases, an individual doesn't have to worry about paying debts that are incurred before the marriage. However, a judge may still require whoever is in the best financial position to pay that debt to do so.

It may be worthwhile for people to remove their name from the title. It may also be a good idea for them to remove themselves from any insurance policy related to the vehicle. For maximum protection, it may be best to sell the car with the estranged spouses splitting the proceeds.

There may be multiple ways to divide marital property during the divorce process. In some cases, it may be possible for an individual to assume a debt in exchange for reduced spousal support payments. If an individual cannot reach an agreement with a spouse, it may be worthwhile to talk with an attorney about ways to resolve the issue.

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Hecht Family Law
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Alpharetta, GA 30004

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