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Brandon M.
Brandon M., Counselor at Law
Category: Legal
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Experience:  Attorney experienced in numerous areas of law.
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Divorced spouse, 1st party, is behind 2 payments on their vehicle.

Resolved Question:

Divorced spouse, 1st party, is behind 2 payments on their vehicle. Car loan company cannot locate this vehicle for repossession. This car is financed with 1st party only and their parent, as cosigner, on the loan. The 2nd party is not on the loan for this car.

They, loan company which has both loans, are threatening to repossess the 2nd party's car, which is not in arrears, but has former (1st) party's name on the loan for the 2nd car.

Divorce decree states that 1st party is to pay their car payment and 2nd party is to pay their car payment.

Can the loan company which is the same for both vehicles repossess the 2nd car even if the payments are up to date? If so, will this always be a cloud hanging over the head of the 2nd party? If 2nd party makes payment, what recourse to recover these payments since they are in violation of the divorce decree.

State of Iowa if that makes a difference.

Thank you.
Submitted: 2 years ago.
Category: Legal
Expert:  Brandon M. replied 2 years ago.

Brandon M. :

Hello there.

Customer:

Hey

Brandon M. :

Hi, thank you for your question. I have to ask--why can't the lender locate the first vehicle for repossession?

Customer:

Not sure. I am the father of the daughter (2nd party) and they called her at work today and told her if she didn't make the 2 payments by close of business today, they would repossess her car since they couldn't find his.

Brandon M. :

Typically, the lender holds title to the vehicle until the loan is completely paid off. I realize that this is your daughter's vehicle, but do we know if the lender currently holds title to her vehicle?

Customer:

Yes, the lender, Toyota Financial has both loans. The loan on the husband's vehicle is with his father as cosigner. Daughter is not on the loan or listed on the registration of the vehicle in arrears.

Customer:

He, although, is listed on the loan on her car, but it is not in arrears.

Brandon M. :

What you will usually see is that the loan agreements permit the lender to enforce the loan against any vehicle taken under the name of the borrower. In other words, it is usually built into the contract, and I would not expect anything different if the lender is Toyota Financial. The lender is the innocent party in all of this, they are owed money, and they have access to collateral to enforce, so they are going to do it if possible, and if the name of the borrower is on any vehicle loan, the contract typically permits that to happen. So even though the borrower may share the vehicle or loan with another person, it can still be enforced (which is also incorporated into the loan). In other words, you can repossess a second vehicle to satisfy a debt on a first vehicle, even if the second vehicle is shared. A court's judgment of possession and loan obligations affects the rights of the parties to each other--the innocent third party lender does not have their contract dissolved as a result...

Brandon M. :

because the nuances of every case are different, you should not rely on this information as advice or apply it to a specific situation without a more thorough in-person consultation with counsel. But that said, your daughter is still a victim here and she is not without rights...

Brandon M. :

when you marry, you legally entangle yourself with your spouse and it is not uncommon to remain entangled long after the marriage itself is dissolved, so this is not unexpected and as much as I am sure they wish they could be rid of each other, this is the reality of the situation. Your daughter did not ask for this to happen, but this is what is happening so she has to deal with the circumstances as they are. Even assuming the lender can repossess the vehicle, the delinquent spouse can still be held accountable for their failure. The victim spouse has a few options. First, any willful, knowing violation of a court's order is contempt of court; contempt of court is a crime that is punishable by fine and/or jail. It's one thing if the spouse is simply broke and can't make payments, but when the spouse is hiding their collateral or making it unavailable, it avoidably shifts the burden back to the victim spouse. Generally speaking, an action for contempt of court may be pursued. On the civil side of things, the victim spouse may simultaneously make payment on the debt of both vehicles and sue the delinquent spouse for reimbursement for the amount.

Customer:

So, if she pays the past due payments on his vehicle this time; if he becomes in arrears again, they could take her car unless she makes those payments? What rights does she have to either recoup those payments (made by me)? By not following the decree, is he in contempt of court??

Customer:

If she pays off the car that has both names on that lien, would that absolve her of his obligation to pay his vehicle payment?

Brandon M. :

If the victim spouse fails to pay and the car simply gets repossessed, it will not affect the victim spouse's credit rating simply because the repossession took place--the victim spouse would have to violate her own loan terms for that to happen.

Any willful, knowing violation of an order of the court is contempt of court. In the meantime, the victim spouse generally has a choice--make the payments for the other spouse and seek restitution, or don't make payments and risk repossession of the vehicle. It's not her fault, but it is the situation and she has to make the best choice under the circumstances even if the situation is not ideal.

Customer:

In regards XXXXX XXXXX statement of "the delinquent spouse can still be held accountable for their failure"; she is not delinquent and is not listed on the vehicle that is delinquent in any manner.

Brandon M. :

I was not referring to your daughter as the delinquent spouse. I was referring to the husband who was delinquent on payment of his vehicle.

Customer:

If she pays off her car that has both names on that lien, would that absolve her of his obligation to pay his vehicle payment?

Customer:

Since she is unable to make the back payments and I will be forced to, what recourse do I have? Since I am making the payments, can I make a claim of the vehicle?

Brandon M. :

It depends on our assumptions. We have the delinquent spouse who is not paying the loan on the vehicle in his possession and we have the victim spouse who pays off the vehicle with the loan in the name of both spouses. If we are assuming that title to the vehicle would be transferred into the name of the victim spouse only, the lender could not repossess the victim spouse's vehicle as soon as the delinquent spouse's name was dropped from the loan and the title. If we are assuming that title to the vehicle would be transferred into the name of both the victim spouse and the delinquent spouse, it is possible that the lender could still take possession of the vehicle.

Brandon M. :

May I safely assume that you do not have any legal obligation to make payments on the vehicle? This would be a voluntary payment on your part?

Customer:

Yes, trying to prevent my daughter's vehicle from being repossessed.

Customer:

She is making payment, but I am giving her the money.

Customer:

Since this is less than $1,000, should I just take him to small claims court? Since I am in Texas and he is in Iowa, would I have to do this EVERY time this occurs?

Customer:

Or should the family law court have jurisdiction on the case?

Brandon M. :

I'll say again that because the nuances of every case are different, you should not rely on this information as advice or apply it to a specific situation without a more thorough in-person consultation with counsel. But that said, you have not indicated to me that there is a legal relationship between you and your daughter's ex-husband. You have said that she has a legal relationship with him, and you have a legal relationship with her (by virtue of the payments). You could sue her and she could sue him, but there needs to be a legal relationship to successfully bring suit. You have not said that he owes anything to you, although he does have a legal duty to your daughter.

Brandon M. :

Another option is for the victim spouse to ask the family court to order the delinquent spouse to surrender the vehicle to the lender, and basically go back and ask the court to throw him in jail if he thereafter fails to do so. It's not an instant fix, but it would keep the matter from perpetuating.

Brandon M. :

I have kids of my own and I completely understand just wanted to take care of this yourself, but this is between your daughter and her ex-husband as far as the courts are concerned. I really am sorry.

Customer:

There you go. Thanks. I appreciate your time and help.

Brandon M. :

Certainly. Did you have any other question?

Customer:

Would I need to retain counsel to have family court do this or can it be done in a less expensive manner?

Brandon M. :

Whether an individual can handle their own case without the assistance of legal counsel depends on the individual. The family courts have gone to great lengths to make themselves more accessible to the public. They have partially succeeded--things are nothing like they were 30 years ago, but the process is not at all intuitive. Handling your own case is like preparing your own income tax returns; some people will always need professional assistance, some people are sophisticated enough to handle their own matter, but the majority of people can stumble through their own issues successfully as long as there is nothing unusually complex about their case. If your funds are low, I would recommend that you nonetheless consult with an attorney for an hour or two to help you organize your initial filings so you can at least start off on the right foot.

Brandon M. :

Does that make sense?

Customer:

Yes sir, it does. I will request a date for hearing tomorrow. Thank you so much. I will now sign off and rate your work. Take care. Jim

Brandon M., Counselor at Law
Category: Legal
Satisfied Customers: 12237
Experience: Attorney experienced in numerous areas of law.
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Brandon M.
Brandon M.
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Attorney experienced in numerous areas of law.