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How can I transfer a car loan to my wife during a divorce in Michigan?

The cars are our only assets, and we are planning to divorce. Both of the loans are in my name, but she has agreed to take over the loan for her car. How do I get it to be only in her name?

avatar
Sophie Newman · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Your wife has to refinance the vehicle in her name. First, she’ll need to apply and be approved for a car loan on her own (or with a co-signer’s help).
If she can’t refinance the vehicle in her name in
Michigan
, then lenders will hold you both financially responsible as long as your name is on the loan, regardless of what your divorce decree may say.
Otherwise, you can pay off the debt before the divorce so there’s no loan at all. It’s often easier to split an asset than a debt. If either of you can afford to pay the loan off early, review your loan paperwork to ensure you won’t be charged
prepayment penalties
.
You can also try selling the car, in which case you’ll still have to make up the difference for the loan.
Pro tip: Remember to get separate insurance policies if you haven’t already. If you use the Jerry app, you can pick an insurer, and
Jerry
will take care of the signup paperwork.
View full answer 
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