Going through divorce: 2 cars in both our names...

[XploringOptions]

Hi again,

As I get closer and closer to filing, the more I feel I have sorted it all out. There is one question that I still don't quite know the answer to though...

I am going through a divorce (we have been separated - she moved to TX - more than 6 months) and I am filing separately as the divorce isn't final yet. We both have car payments, and both of our names are on both care loans. I obviously don't pay her anything toward her car, nor does she to mine. How likely is it that the trustee will have an issue with her car? Neither of them have any real equity as both are relatively new (mine, if any, is within exemption...as would be hers). Would I have to sign a reaffirmation agreement with the lender on her car? Very confused...

Thanks!

[keepmine]

Just include both cars in your filing.
If there is no equity, it's no issue. Don't reaffirm her car {or yours if your district will let you ridethrough}.

[FreshLikeADaisy]

Agreed with Keepmine; you want to include both vehicles for purposes of disclosure because they are both titled to you, but since there's no equity it's a non-starter. However, the lenders will ultimately decide how your loans are structured going forward. I don't see that being an issue for you -- the worst that would happen is you have to sign a reaff if you can't do a ride-through -- but it could be an issue for the ex. Or maybe not. No way to tell until you file. Good luck!!!

[JRScott]

If your divorce proceedings are underway it might be better to wait for them to finish first before filing bankruptcy, otherwise it can delay your discharge.

[XploringOptions]

If your divorce proceedings are underway it might be better to wait for them to finish first before filing bankruptcy, otherwise it can delay your discharge.

All that I have read is the opposite...that the divorce court will wait until the bankruptcy is done to close it's case. I am curious as to why it would be the other way around? None of the attorneys I consulted with mentioned anything along these lines. If you have info, please let me know where to find it. Thanks!

[FreshLikeADaisy]

XploringOptions, that threw me as well. My understanding is the same as yours: that if there is any legal delay, it's in the divorce and not the bk, because the bk would affect any divorce settlement and not the other way around.

Bk is pretty cut and dried, especially because creditors disregard divorce settlements: if -- for example -- there was disagreement between you and your wife over who gets the cars, if you didn't pay they'd come after her, regardless of the divorce, because the debt is jointly held. If you file bk and quit paying, they would go after her for payment and/or reposess the cars. That's IF you disagree! So far, all I hear from you is that you both intend to keep your cars and independently continue payments on both. If all your assets have similarly been divided and responsibility assumed, I don't see the problem.

Granted, it's not always this easy, but you made no mention of any other complicating issues (like being in a community property state) so I don't see your Ch7 holding up the divorce at all, especially if the property has already been divided and she's gone her way and you've gone yours.

Maybe someone else can correct me or offer further info, but X, I honestly think you have it right. Good luck!!!

[JRScott]

With the property in both your names though, it is sometimes better to wait and let the divorce court establish who owns what as well as who is obligated to pay what.

Also if you are ordered to pay alimony or child support as part of the divorce decree you can use that as expenses in the bankruptcy as that obligation cannot be absolved.

[CindyLou]

With the property in both your names though, it is sometimes better to wait and let the divorce court establish who owns what as well as who is obligated to pay what.

Also if you are ordered to pay alimony or child support as part of the divorce decree you can use that as expenses in the bankruptcy as that obligation cannot be absolved.

The OP will still need to include both cars, because a divorce decree doesn't remove the responsibility for the debt, it just spells out who will pay the debt. Unless the ex refinances that car, then he should include the car on his BK.

[JRScott]

True Cindy, I"m just thinking of it from the perspective of using it on expense sheets, if there is no chance of alimony he might be fine to go ahead and file.

[CindyLou]

I actually wasn't suggesting he file or not file now....I was just saying if he DOES file now it will be better to include both. Divorces just make these BK's so messy!