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How is car debt split in divorce in Connecticut?
I'm getting a divorce soon and my future ex and I still have a loan on one of the cars that we shared. How will this be parcelled during the divorce?
Sophie Newman · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Connecticut is an equal distribution state, which means generally that your property, including debt, is split more or less equally during divorce.
Dealing with debt during divorce can be tricky. If you both co-signed the
car loan
, then you are both equally responsible for payments, regardless of who benefitted (though in this case it sounds like you both did). Unless you come to some alternative legal agreement, you can expect to share the debt with your future ex after the divorce. If you can come to some kind of agreement (or even pay off the loan) before the divorce is finalized, it will be much easier to split this asset.
If you or your spouse has the means to pay off the loan, be careful of
prepayment penalties
. Some lenders will charge fees for paying off a loan early. Depending on your financial situation and how much less stress is worth, it might be worth paying off your loan regardless of the fees.While it adds another thing to do during your divorce, it’s a good idea to review your car insurance policy—especially if you have an
insured teen driver
listed on one or both policies. Divorce and paying off a loan are both good reasons to evaluate your policy and ensure you’re getting the best rates.If this feels stressful to you, don’t worry; we’re here to help. The free
Jerry
app compares rates from the top 50 companies and delivers the best deals to your phone in minutes. We’ll also transfer your personal information to your new provider and cancel your old policy for you.”View full answer
- Gregory R.
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