Every divorce is different, because every family is unique. However, there are certain issues that every divorce has in common. One of these is property division. Minnesota is an “equitable distribution” state, which means that the parties’ marital assets will be equitably distributed. The Minnesota statues provide a list of factors that the court will examine when trying to decide how to divide the parties’ assets. For many divorcing spouses, vehicles will be a major issue in their divorce, as they are typically valuable assets and sometimes have significant debt.
In the simplest of cases, it is easiest for each party to take the vehicle they have traditionally driven during the case. It should be noted, however, that there may be a significant disparity in value in the two vehicles. For example, if one party has a car that is much newer than the other spouse’s car, there could be a significant difference in value there, so the parties need to offset that value differential elsewhere in their asset division.
One common issue arises when there is significant debt associated with one or both vehicles. It is essential that each party considers whether they have the ability to continue paying the monthly note on the vehicle. If either spouse will not have the financial ability to keep up timely payments, it may be advisable to sell that vehicle and purchase a more affordable model.
Another important consideration is whether the spouses are both named on the vehicle loans. The parties may agree that they will each be solely responsible for making the payments, but this will not have any impact on the contractual obligation that was created when the parties signed the loan in the first place. In other words, if your spouse stops making timely payment son a loan that you cosigned for, telling the loan company that the divorce decree provides you will never have to make payments again will not prevent the loan company from suing you for the loan default. Your only recourse would be to bring an action against your former spouse to try to recover the amount you had to pay in the lawsuit with the loan company.
Let us help you think of solutions for your assets and your divorce. Call us at 651-413-9568 for a consultation.