Most of your property is vulnerable when you divorce in Illinois. All of your shared property and even income earned during the marriage may be subject to division. You and your spouse will also have to divide most of your debts with one another.
Sometimes, an item that’s part of the “marital pot” can represent both an asset and a debt — like a vehicle on which you still owe money. When a financed vehicle is jointly held, deciding how to handle the issue can get complicated.
If you drive a financed car or truck and you’re about to get divorced, what happens?
You may need to refinance to keep the vehicle
It is common for both spouses to be on the loan for major purchases, including vehicles. Even if you did not include your spouse on the loan paperwork, they do still have an ownership interest in the vehicle because you purchased it during the marriage and using marital income.
In some cases, you may be able to refinance to remove your spouse from the loan if they are on it. Other times, you simply have to reach an agreement with your spouse about how to offset the vehicle’s value with other property. In rare cases where you have only just purchased the vehicle, you might struggle to qualify for financing, especially if you have not worked a full-time job throughout your marriage.
Learning more about equitable distribution rules in Illinois divorces can help you create appropriate property settlement arrangements. While it can take a lot of work to get some of the issues settled, knowing your options can help you move forward more quickly.