My son and his wife have been separated since June 2009. They had only been married for a year and a half when they separated. They are preparing their own separation agreement and have settled all property issues except one. They have a vehicle that they have agreed will go to my son. They both are on the loan papers and both names are on the registration. My son was laid off his job before they separated and collects unemployment benefits. He lives with us until he can find a job. His wife wants her name taken off the loan papers so she cannot be held responsible for the loan. My son has no problem with this but the bank will not re-finance the loan because of his unemployment status and due to the recession are not allowing any co-signers. He has agreed to include in the separation language that states he will be responsible for the loan and remove her from any responsibility for the loan. 1. How do they resolve this matter to the extent that the wife has no further responsibility for the vehicle and/or loan. If they put it in the separation agreement is that enough? How does my son get the vehicle registration in his name only? They really want to conduct this process amicably but this one issue has them stumped.
Any advice would be greatly appreciated.
If your son cannot refinance the loan, they can agree that the car will be sold and the loan satisfied, or they can include language which requires that he indemnify her and hold her harmless from any and all liabilities related to the loan.
When the loan is paid off your son’s ex wife will need to sign the car title over to him once the lienholder releases the same upon payoff. He will then need to register the title in his own name with the DMV.