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QLD Car Loan Debt After Separating from Partner - Legal Options?

Discussion in 'Debt and Bankruptcy Law Forum' started by Millm3r3, 6 January 2015.

  1. Millm3r3

    Millm3r3 Member

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    I am looking for some legal advice in regards to a car I currently have under finance with my ex partner. When we split a year ago we both made the agreement he would take the $35,000 car - as he wanted it, on the grounds that he’d remove my name from the title of the car and the car loan finance contract we made with the finance company. We both got in contact with Volkswagen finance and were told to write and sign separate letters claiming that I was happy to have my name removed and that he was happy to finance the car on his own.

    The second step was for him to fill-out the new contract which they have sent to him twice and he continues to make excuses as to why he hasn't done it. Things have gotten ugly and now he's telling me won't do it and to take him to court. We still have three years on the contract and he is behind on payments every month, although he does pay for it just late and I've had enough of receiving phone calls and letters from the finance company because he's late.

    My question is what are my options? I know that if he defaults on payments they will come after me. I just want to know if I have any right to take him to court and have the car returned to me, or are we sell it and pay off the finance company? Also because he is a New Zealand Citizen, if he decided to move home, can he sell it from under me and leave me with the debt? is it even worth taking to court? I wouldn't know where to start for debt help.
     
  2. Sophea

    Sophea Well-Known Member

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    Hi Millm3r3,

    This is a difficult situation, because as you have pointed out, as long as you remain on the finance contract you are jointly and individually liable for the the debt. With regard to the risk of him selling the car and returning to NZ, the finance contract likely contains a clause that says that the car is by right theirs, even if sold. So they would have the right to take it back from the person that bought it. I'm not 100% sure but that should prevent the finance company coming after you for the money. Any buyer with half a brain though, should do a background check on the vehicle before they buy it to see whether there is any finance registered against it. In addition, running away to NZ doesn't absolve someone of a debt. Debt recovery proceedings can be served on a Defendant in NZ under the Trans Tasman Proceedings Act.

    Your best option is to somehow get him to fill out the paperwork. You could threaten to sell the car to pay out the finance to extricate yourself, however I don't know how that would work out in reality.

    Otherwise I recommend that you see a family lawyer who will be able to advise you on options such as applying to the court for a property settlement order. Seeking legal advice will still ultimately work out cheaper than being lumped with a $35,000 debt but obviously try as best you can to get those papers signed and submitted to Volkswagon first.
     
  3. Millm3r3

    Millm3r3 Member

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    Thankyou for your reply Sophea.

    I have tried and tried for a year now and put up with alot of verbal abuse in the hope that by playing nice he would get it done. I think this is his way of having continuing to hold some sort of control over me and i don't hold much optimism that he will do this the easy way. I've been told that because I handed my set of the keys over that diminishes my right claim the car back which I find hard to believe as the car is still currently part mine.
     

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