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Originally Posted by volsfan4life252
OK my wife and I financed a used vehicle through fifth-third bank and we are both considered co-borrowers. We later divorced and she kept her vehicle and i kept mine. She is refusing to re-finance and take my name off the loan because her payments are gonna go up. Her vehicle is showing up on my credit report and is screwing up my debt to income ratio. What are my legal options? I've been told by some friends that I can basically force her to refinance or force her to sell the vehicle since legally it is as much mine as it is hers? Is this true?
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If this is a cosigned loan, and the divorce decree clearly states it was her responsibility in the divorce, that debt should NOT be included in your DTI, if in fact you're applying for a mortgage. Similarly, if this is a cosigned debt and you can show proof she's made the payments for at least one year, again that debt should not be included. No, you can't legally force her to sell the car; she took over that debt and asset, per the divorce, nor can you force her to refinance the loan to remove you. Most nationally-based lending institutions recognize the difficulty of prior marital debts and have devised the above 2 methods as a way of accomodating a prior divorce.
If in fact you're applying at a mortgage company and the company refuses to acknowledge this possibility, I'd strongly suggest you
run as far as you can and find a qualified company accustomed to this standard procedure. Most of the major car finance companies also practice this policy, but that can be an individual company policy. The next time it happens, bring this up to whoever you're speaking with: ask that if you have proof the car loan was included in the divorce as your 'ex's responsibility, will they still consider this your monthly obligation? Again, if any lender refuses to acknowledge this standard industry practice, find one experienced enough to not bat an eye the minute you mention "prior divorce."
Simply put, any reputable banking institution should NOT be including that debt if in fact, your divorce decree specifically awarded that debt to your ex, or even if you can document the car mentioned in the decree (if that's in fact the case) was secured by the loan in question. Most financial institutions will accept that final recorded decree a legal document absolving you of the responsibility. On the other hand, if no such arrangement was specified and if you can get proof you did NOT make the payments for at least 1 yr, again any reputable financial institution should not include it in your DTI. (I say 'should.' While that's the norm with national companies and practiced by the federal government, it may not be practiced by smaller, more financially vulnerable lending institutions.) You'd need to ask to find out.
Hope this helps. Good luck. One quick question, if I may: what type of loan are you asking about?