Married couples generally combine their resources to enjoy a higher overall standard of living. They can buy a nicer vehicle and get better credit terms because of their combined household income. Unfortunately, couples who decide to divorce must tackle the challenging process of dividing their marital property.
Louisiana is a community property state which means that each spouse has an interest in most assets acquired during the marriage regardless of who earned more money or whose name is on the ownership paperwork for those assets. What would typically happen with a financed vehicle during a Louisiana divorce?
Spouses have to address the vehicle and the debt
Most people cannot afford to purchase a vehicle outright with the cash they have on hand, so they apply for a loan when they need a vehicle. Even if only one spouse is on the loan or on the title paperwork for the vehicle, Louisiana may treat both the debt and the vehicle as part of the marital estate.
The spouses can potentially agree to allow either spouse to keep the vehicle. The one who retains the vehicle may very well need to refinance the loan to remove the other person’s name from the title and the loan. If a judge has to decide what happens with a financed vehicle, they may look at other aspects of the property division process when making that determination.
There is never any guarantee about the outcome of litigated property proceedings, so those who feel strongly about keeping certain assets when they divorce may want to work toward an uncontested divorce where they set their own terms. Understanding what could happen with the most valuable shared assets from a marriage may help people better plan their approach to divorce.