Ex takes wheels, leaves wife with bills

Dear Dr. Don,
Please help! I have been divorced for more than eight years, and I was stupid enough to allow my ex-husband to put his car and motorcycle in my name. The car doesn’t have a lien on it, but the motorcycle does because he’s still making payments on it. Both are under my insurance.

He refuses to put them in his name because he has bad credit. What am I supposed to do? Sometimes he doesn’t give me the money and I end up making the payments so I don’t get bad credit!

—
Anita Advice

Dear Anita,
You’re right to be concerned about your credit. If the loan’s in your name, it’s your credit report and credit score that will take the hit if payments are late.

I can understand why your ex is trying to game the system. A poor credit score would give him higher loan rates and could also make his auto and motorcycle insurance more expensive — if they were in his name.

The car’s the easier of the two problems to handle. With no lien on the title and the title in your name, you should be able to assign the title to him, essentially gifting him the car. As long as the car is worth less than $12,000, the gift would be under the annual exclusion limit on gifting and you wouldn’t owe a gift tax.

Then, since you don’t own the car anymore, you can drop the auto insurance on it. It becomes his problem.

The motorcycle is more difficult. The lender isn’t going to release you from your obligation until the loan is paid off. Not making the payments could force the lender to repossess it. That will wreck your credit for the next seven years. Your name is on the title, so you have a responsibility to keep insurance in force. Selling the bike is the best answer.

You should have the upper hand in this. You own both the car and the bike. Use the gift of the car to convince your ex to let you sell the bike. It’s hard to move on with your lives when you have these financial ties that have to be managed to keep your credit in good standing.

Thanks to attorney Kirk Friedland for his help in answering this reader’s question.

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