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Can she dispose of this vehicle yet?

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Murrini

Junior Member
What is the name of your state (only U.S. law)? California

I am helping a friend with his divorce, it is not friendly and he is having numerous problems with his ex. The latest issue, and I believe she is trying to trick him somehow, is in regards to her vehicle. As far as the divorce proceedings the initial paperwork is filed and child custody issues have been started, but no division of property has taken place or even filed yet. She filed the initial divorce paperwork (illegally but we are having problems challenging that), but hopefully he will be filing the first property division forms tomorrow. So the matter at hand - Her vehicle: It was purchased during the marriage, the loan (<$9000)is in his name, but she took it with her and has been making the payments on it since the seperation. She was the primary driver of it before the seperation. She also currently has the majority of the assets other than his vehicle (loan >$17,000), a freezer and a TV, and is accepting no responsibilty for any of the debt other than payments on her vehicle. Today she gave him a letter telling him she is bringing it to him on Friday of turning it back over to the bank (which I'm sure she will refuse to pay the difference on the upside down loan) but it blue books at only 6,400 so he will be taking a major loss and has no use for it nor can afford to continue payments on it. She has recently acquired a laywer but gave him the letter personally, with no word from the laywer on it. Here is the letter:
Dear Jarrett,
Since my last correspondence via certified mail was not addressed as requested, I remain unable to obtain insurance on the 2001 Jeep Grand Cherokee, I must return the Jeep to you. I have enclosed the keys in the envelope.
I would like to offer you the option of me taking the Jeep to Coast Central Credit Union where you would need to sign it over to them as we have previously discussed, you can pick it up at my Fortuna residence, or I can take the jeep to your residence. If I do not recieve correspondence from you (via phone or mail) by Friday, July 18th, I will take the Jeep to your residence and park it in front of the barn by Friday evening. Thank you in advance for your cooperation in this matter.

Thank You,
(she must have had someone help her write the letter, this is well above her standard literary skills)
She has claimed that she can not get insurance on it because his name is on the loan, but she has had it fine before, and the name on the loan should not matter. She has since purchased a new vehicle (not a cheap one), though she is at a minimum wage job.

Is she allowed to do this? Esp since she took the vehicle at the time of seperation, shouldn't that mean that she took responsibilty for it? We are hoping that she will already get in trouble for having all the assets and not taking responsibility for the debt. He does not want to get tricked into taking the vehicle and selling it and getting introuble for disolving a major asset before division of property, and obviously does not to be tricked into having to take the fall on the vehicle. Can she also get in trouble for the major purchase of the new vehicle as well? (my understanding is no major sales or purchases before judgement?)

His current plan is to call her laywer in the morning since she has made contact with him exparte. Also if she leaves the vehicle as she threatens to, she could be charged with both criminal trespass onto his property (the court has ordered her to stay off of his property) and/or abandoning a vehicle on a public road, and is prepared to photograph and report the event. Is this an appropriate plan? Any better suggestions? He cannot afford a laywer, and we are in a rural area where there is really not any low cost or free aid that he can utilize (at least not that we can find).
Thanks
 


mistoffolees

Senior Member
Basically, she is entitled to purchase a vehicle for her own use - as long as she is doing it with her own money and not marital assets. She doesn't have to continue using the Jeep if she doesn't want to.

The court generally only cares if you are squandering marital assets or selling marital assets without permission.

The safest thing is to do nothing at all and let her create her own debts. She's still going to be entitled to half of marital assets and half of marital debts. If the car is sold for a fair price and the proceeds are placed into a joint marital account, it would probably be OK (especially since she told him to do it), but the other party could always claim that it was sold for below market value to hurt her or something like that, so I'd discuss it with the attorney before doing it.

The broader issue is that she doesn't want the car. In that case, he can't force her to take it. Ultimately, he will have to decide whether to take it as part of the property settlement or have it sold. The fact that it's worth less than the loan value isn't the court's problem.
 

LdiJ

Senior Member
What is the name of your state (only U.S. law)? California

I am helping a friend with his divorce, it is not friendly and he is having numerous problems with his ex. The latest issue, and I believe she is trying to trick him somehow, is in regards to her vehicle. As far as the divorce proceedings the initial paperwork is filed and child custody issues have been started, but no division of property has taken place or even filed yet. She filed the initial divorce paperwork (illegally but we are having problems challenging that), but hopefully he will be filing the first property division forms tomorrow. So the matter at hand - Her vehicle: It was purchased during the marriage, the loan (<$9000)is in his name, but she took it with her and has been making the payments on it since the seperation. She was the primary driver of it before the seperation. She also currently has the majority of the assets other than his vehicle (loan >$17,000), a freezer and a TV, and is accepting no responsibilty for any of the debt other than payments on her vehicle. Today she gave him a letter telling him she is bringing it to him on Friday of turning it back over to the bank (which I'm sure she will refuse to pay the difference on the upside down loan) but it blue books at only 6,400 so he will be taking a major loss and has no use for it nor can afford to continue payments on it. She has recently acquired a laywer but gave him the letter personally, with no word from the laywer on it. Here is the letter:

(she must have had someone help her write the letter, this is well above her standard literary skills)
She has claimed that she can not get insurance on it because his name is on the loan, but she has had it fine before, and the name on the loan should not matter. She has since purchased a new vehicle (not a cheap one), though she is at a minimum wage job.

Is she allowed to do this? Esp since she took the vehicle at the time of seperation, shouldn't that mean that she took responsibilty for it? We are hoping that she will already get in trouble for having all the assets and not taking responsibility for the debt. He does not want to get tricked into taking the vehicle and selling it and getting introuble for disolving a major asset before division of property, and obviously does not to be tricked into having to take the fall on the vehicle. Can she also get in trouble for the major purchase of the new vehicle as well? (my understanding is no major sales or purchases before judgement?)

His current plan is to call her laywer in the morning since she has made contact with him exparte. Also if she leaves the vehicle as she threatens to, she could be charged with both criminal trespass onto his property (the court has ordered her to stay off of his property) and/or abandoning a vehicle on a public road, and is prepared to photograph and report the event. Is this an appropriate plan? Any better suggestions? He cannot afford a laywer, and we are in a rural area where there is really not any low cost or free aid that he can utilize (at least not that we can find).
Thanks
He could have avoided the entire problem by cooperating with insuring the car....and/or keeping the car insured until the final property settlement.
 

Murrini

Junior Member
Thank you for your responses:

mistoffolees: That all makes sense as far as letting her acquire more debts, we are pretty sure she will try and hide a lot of stuff as far as assets and debits, which is why I'm trying to get him to file first, so it is all out in the open. She has been constantly lying to the court through all of this and has already lied to her laywer (has only had her a week) and the court is starting to see through her story, so we are hoping that her credibility will be well shot. As far as the Jeep she wants to dump it back on him now, he can't afford to deal with it until the court hears it, although I understand that if she dumps it she dumps it and because the loan is in his name he is screwed at this immediate point. Can he turn that back around when it comes to the division of the property and assets and show the court she dumped more debt back on him, and still thinks she does not have to take any of the other debit? It is not an asset for sure because it is so upside down. I know directly that it isn't the courts problem that the loan is upside down, but at some point does she get held accountable for her role in the vehicle, it is obviously her vehicle in all but his name on the loan. Should he call her lawyer tomorrow and discuss it with her at all, maybe tell her that he will agree to take the vehicle back IF ex agrees that he can sell it at fair market value/ or remit to bank and let them sell - and ex is responsible for paying the rest of the difference to the bank? Or just sell/or remit to the bank and then bring it up in court? Or.....? Also, is it at her error to give him the letter outside of her laywer since she has obtained her services, esp since he has told her to only contact him through her laywer, that he wants no direct contact with her outside of the exchange of the children (due to other harassment issues).

LdiJ: She has maintained insurance on it herself since the seperation with no problem, and suddenly now that she wants a different car, it is a problem. She should not have any problem getting the insurance (I can walk in and get insurance on it, without his permission I believe, I know my insurance co dosn't ask for proof that I own my vehicle, just insures it because I drive it). The mention of the certified letter, he never got one so there is nothing he could cooperate with, she had not requested any other help with insurance. She mentioned about 2 weeks ago that she was going to sell it because she couldn't get the insurance (never said she needed anything to get it, we assumed it was because she couldn't afford it, not that there was any other problem), but all of a sudden has come up with dumping it back on him and leaving him with the problem.

One more thing, does she need to serve a new income/expense form with Him when her financial status changes, or just with the court? She started a job since her inital report was filed and given to him She has had the job for about 2 months now and he has recieved nothing.
 

mistoffolees

Senior Member
Thank you for your responses:

mistoffolees: That all makes sense as far as letting her acquire more debts, we are pretty sure she will try and hide a lot of stuff as far as assets and debits, which is why I'm trying to get him to file first, so it is all out in the open. She has been constantly lying to the court through all of this and has already lied to her laywer (has only had her a week) and the court is starting to see through her story, so we are hoping that her credibility will be well shot. As far as the Jeep she wants to dump it back on him now, he can't afford to deal with it until the court hears it, although I understand that if she dumps it she dumps it and because the loan is in his name he is screwed at this immediate point. Can he turn that back around when it comes to the division of the property and assets and show the court she dumped more debt back on him, and still thinks she does not have to take any of the other debit? It is not an asset for sure because it is so upside down. I know directly that it isn't the courts problem that the loan is upside down, but at some point does she get held accountable for her role in the vehicle, it is obviously her vehicle in all but his name on the loan. Should he call her lawyer tomorrow and discuss it with her at all, maybe tell her that he will agree to take the vehicle back IF ex agrees that he can sell it at fair market value/ or remit to bank and let them sell - and ex is responsible for paying the rest of the difference to the bank? Or just sell/or remit to the bank and then bring it up in court? Or.....? Also, is it at her error to give him the letter outside of her laywer since she has obtained her services, esp since he has told her to only contact him through her laywer, that he wants no direct contact with her outside of the exchange of the children (due to other harassment issues).
Property settlement will be relatively simple. Each of you gets half of the marital debt and half of the marital assets. If she chooses to go out and add more debt on herself after the papers are filed, that's irrelevant. She still gets half of the debt. If the car is worth $6 K and the loan is $10 K, they each get $3 K in assets and $5 K in debt. The fact that she used to drive the car and doesn't want it any more is irrelevant. You can't expect her to pick up more than her share of the debt.

I would discuss disposal of the car with the attorney. As I said, given the fact that she proposed giving it back to the bank indicates to me that selling it would be OK, but ask the attorney.

She can give him a letter outside of the attorney if she wishes AS LONG AS there is no 'no contact' order in place. IMHO, it's a foolish thing to do to try to save a few bucks, but there's no law against it.


One more thing, does she need to serve a new income/expense form with Him when her financial status changes, or just with the court? She started a job since her inital report was filed and given to him She has had the job for about 2 months now and he has recieved nothing.
She doesn't have to give him anything unless the court orders it. If there has been a change in her financial circumstances, his attorney should notify the court and ask for a new report. (She may be required to notify the court of any change even if he doesn't request it though).
 

LdiJ

Senior Member
I am going to disagree slightly on the car. In a divorce, whoever keeps a specific asset is responsible for the debt on that asset. Therefore I sincerely doubt that a judge would hold her responsible for half of the debt on a car, in his name, in his possession. Nor, would a judge hold him responsible for half of the debt, if she were to keep the car.

If she simply doesn't want the car, then he has a problem. However if she is giving back the car, due to posturing on his part or a real inability to insure it (because he didn't cooperate with that) then he might want to rethink his position before she goes out and buys another car.

Also, if you have never tried to insure a car, that is not in your name, that still has a lien on it, then you better be careful what advice you are giving your friend. It certainly couldn't be done in my state.
 

mistoffolees

Senior Member
I am going to disagree slightly on the car. In a divorce, whoever keeps a specific asset is responsible for the debt on that asset. Therefore I sincerely doubt that a judge would hold her responsible for half of the debt on a car, in his name, in his possession. Nor, would a judge hold him responsible for half of the debt, if she were to keep the car.
While the person who gets the car is going to get the debt on that asset, they're also going to have to compensate the other person for half of the equity.

Let's say the car is worth $20 K and the loan is $10 K. Person A keeps the car. They're going to also keep the loan, but they'll pay the other person half of the equity ($5 K).

The same thing is true if the car is worth less than the loan value. The person who keeps the car also keeps the loan, but the other person has to compensate them for half of the negative equity.

If you do the math, the result is exactly the same as what I stated (they each get half the total debt and half the total assets). It's easier to start by adding everything up and figuring out what the TOTAL result will be and working back from there than trying to resolve each asset in isolation. But the end result is the same.
 

LdiJ

Senior Member
While the person who gets the car is going to get the debt on that asset, they're also going to have to compensate the other person for half of the equity.

Let's say the car is worth $20 K and the loan is $10 K. Person A keeps the car. They're going to also keep the loan, but they'll pay the other person half of the equity ($5 K).

The same thing is true if the car is worth less than the loan value. The person who keeps the car also keeps the loan, but the other person has to compensate them for half of the negative equity.

If you do the math, the result is exactly the same as what I stated (they each get half the total debt and half the total assets). It's easier to start by adding everything up and figuring out what the TOTAL result will be and working back from there than trying to resolve each asset in isolation. But the end result is the same.
I have never, ever in any situation seen it happen where someone was compensated for negative equity.....and negative equity is nearly always the case when there are still payments due on a car loan. (of course there are some exceptions to that)

Now, there may be some cases out there where an agreement was made to take negative equity into consideration, however I have NEVER seen a judge order something like that, when the asset is being kept by one of the parties.
 

mistoffolees

Senior Member
I have never, ever in any situation seen it happen where someone was compensated for negative equity.....and negative equity is nearly always the case when there are still payments due on a car loan. (of course there are some exceptions to that)
It happens all the time with homes.

Besides - if they both say that they don't want the car (which appears to be the case here), the judge is likely to have them sell it and each pay half of the balance. Same mathematical result.
 

LdiJ

Senior Member
It happens all the time with homes.

Besides - if they both say that they don't want the car (which appears to be the case here), the judge is likely to have them sell it and each pay half of the balance. Same mathematical result.
I have never seen it happen with a home either. Yes, if neither party wants an asset and it must be sold, then yes, both are held responsible for any shortfall. However again, I have never seen that happen when one of the parties keeps the asset.
 

Murrini

Junior Member
Thank you everyone for your opinions, I see this is an interesting subject...
LdiJ: As senior member I would like to as you a few direct things on this:

My friend does not have a laywer, there is no way he can afford one (she was not expected to be able to either, we aren't sure how she retained one). Would it be inappropriate for him to contact her laywer regarding the vehicle? She will not give an inch on any of her positions on anything so he would rather deal with her laywer.

Can he refuse her demand on the vehicle situation and tell her (or preferably her lawyer) that SHE needs to sell the vehicle, or be the one to return it to the bank. Would that be likely to have the court hold her responsible for the rest of the debit on the vehicle?

I may very well be wrong on the insurance of the vehicle, (it was not only me who had the conclusion on the insurance issue, his brother is borrowing a vehicle and is having no problems insuring it with no involvement from the owner, but will defer to your greater experience on it). But my direct issue is that it has been fine for her to insure it until now, and she did not ask for any help to get it insured, she mentioned it (again he thought it was because she was not able to afford it) then this letter yesterday. No inbetween. Unfortunately what is past is past, he will learn from his mistake, but we are stuck with where we are now, she has bought the new vehicle already.

It is not reasonable to try to discuss or reason anything with her, her position is everything is her way, or no way. The court is seeing this and so far is not happy with it, but she has not realized it yet so is still pulling it. He does not want the responsibility of the asset dumped on him just because she dosn't want it anymore when it was clearly her vehicle through the marriage and the seperation. Esp since right now all the other debits are on him because she refuses to take any of them. He really dosn't care much about the other assets, other than she get a fair portion of the debit, his main focus is the kids, he is fighting tooth and nail for them.
 

Murrini

Junior Member
Oh, another thing, she has shown on the initial income/expense declaration, that she has been responsible for paying the loan on the jeep, will that help him at all?
 

LdiJ

Senior Member
Thank you everyone for your opinions, I see this is an interesting subject...
LdiJ: As senior member I would like to as you a few direct things on this:

My friend does not have a laywer, there is no way he can afford one (she was not expected to be able to either, we aren't sure how she retained one). Would it be inappropriate for him to contact her laywer regarding the vehicle? She will not give an inch on any of her positions on anything so he would rather deal with her laywer.
He could, but what will that change if he isn't willing to give in on whatever it was that caused her to decide she no longer wanted the vehicle?

Can he refuse her demand on the vehicle situation and tell her (or preferably her lawyer) that SHE needs to sell the vehicle, or be the one to return it to the bank. Would that be likely to have the court hold her responsible for the rest of the debit on the vehicle?
No, he is the owner of record of the vehicle. If it goes back to the bank, your friend WILL be held responsible for the debit on the vehicle, because the bank is not a party to the divorce and is bound only by the loan contract. The judge can order her to pay for it, if the judge thinks its just, but the bottom line is that its an marital asset/debt, and if netiher of them keep the car, the best that can be hoped for is that the judge will order the debt to be paid 50/50.

I may very well be wrong on the insurance of the vehicle, (it was not only me who had the conclusion on the insurance issue, his brother is borrowing a vehicle and is having no problems insuring it with no involvement from the owner, but will defer to your greater experience on it). But my direct issue is that it has been fine for her to insure it until now, and she did not ask for any help to get it insured, she mentioned it (again he thought it was because she was not able to afford it) then this letter yesterday. No inbetween. Unfortunately what is past is past, he will learn from his mistake, but we are stuck with where we are now, she has bought the new vehicle already.
Yep, he's stuck.

It is not reasonable to try to discuss or reason anything with her, her position is everything is her way, or no way. The court is seeing this and so far is not happy with it, but she has not realized it yet so is still pulling it. He does not want the responsibility of the asset dumped on him just because she dosn't want it anymore when it was clearly her vehicle through the marriage and the seperation. Esp since right now all the other debits are on him because she refuses to take any of them. He really dosn't care much about the other assets, other than she get a fair portion of the debit, his main focus is the kids, he is fighting tooth and nail for them.
I hope that in his desire to not pay an attorney, that he isn't being penny wise and pound foolish.
 

LdiJ

Senior Member
Oh, another thing, she has shown on the initial income/expense declaration, that she has been responsible for paying the loan on the jeep, will that help him at all?
No, because it was accurate, she was paying for the Jeep....he can certainly bring up that she returned the Jeep to him and is no longer paying for it.
 

Murrini

Junior Member
Ok, thank you LdiJ! You are very helpful!

He flat out can not afford it (he is a logger and there is NO work around here right now, he has been trying and is working on switching to another source of work, but there just isn't any extra. Everything he has is going to providing for the kids when he has them. He has even turned off his tv in order to make ends meet until he can get something else, and he is working hard on that. He has an exemplaray employment record until this year and the judge is favorable to him on that. He has looked into them and would love to have one but it just isn't something he can do. Same with the vehicle.

So I think what I'm getting is that it dosn't matter what he does with the vehicle this week, he has to take it back basically, leave it up to the courts to try and recoup his interest in it (since his vehicle loan is still over 17,000 she is still responsible for 50% of that debit since it was acquired during the marriage, correct? and all other debits?) Do you think it would be best to let the bank sell it so she can't say he undersold it, vehicles are not selling anywhere near blue book here right now... ? Again thank you for all of your help!!!
 

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