QuestionMy boyfriend is a co-owner of a car that he and his ex-girlfriend purchased over 2 years ago. Their relationship did not end well and he has already lost a job due to her tricks. Now, she has decided not to pay insurance on the car and the DMV has contacted him; now he is at risk to loose his license because she will not insure the car. She refuses to take over the loan with just her name as owner. What can my boyfriend do to keep from loosing his license without going broke (lawyers/fees,)? Any suggestions?
AnswerHi Lisa,
Doctor Settlement is an expert on personal injury insurance claims, but I will try my best to sort out the choices in this love triangle property/debt dispute. In addition to the insurance, there is a loan with a bank that will not want to take your boyfriend's name off the obligation. Hence, I will address both problems. This appears simple, but as you will see, there are many complications, and all of them require some responsibility on the part of your boyfriend to live up to his obligations.
Your boyfriend and his ex-girlfriend are partners in ownership of an asset that is encumbered by a debt. The only way to get out of that relationship is for one of the partners to buy out the other partner and assume the debt—OR—if they cannot agree—to file a court action to sell the asset and pay off the debt. BTW, even if they COULD agree, if she were to assume the debt, that WOULD NOT relieve your boyfriend of his obligation to the bank.
THAT, Lisa, is the legal answer. Now, is there some practical alternative? It is hard to tell, given the lack of information you have provided. For example, what is the FMV of the car, versus the amount of debt? Who has possession of the car? Who is paying the debt, and is it current? Does the ex-girlfriend have a good credit rating?
Here is why that information is critical. If she has the car, as it appears, and if she has been making the payments on time, and if the debt is a lot lower than the FMV, and if she still is employed with a good credit rating, THEN she is going to be able to put her name alone on a re-write of the loan.
But if any of those above conditions is not true, then the bank is NOT going to let your friend off the hook. Why should they? They can still sue him and get a judgment that will be good to enforce for at least ten years.
So, as for the loan, the choices could be limited to just selling the vehicle and paying off the loan. If she will not agree to that, then going to court is the best thing. He will not actually go to court since once she gets legal advice, she will agree to the sale. An attorney will write her the letter and negotiate the deal and supervise the sale of the asset and make sure the debt is paid. I have no idea what the fee structure is in your area, but you do not need an attorney like me who has a lot of experience since Doctor Settlement's fees were last set at $300 an hour. Look for a beginning attorney whose fees are a lot lower.
As for insurance, I cannot recommend that he transfer the title to her just to get out of the insurance obligation UNLESS there is very low equity in the vehicle. If he were to transfer title when there is a lot of equity in the vehicle, then he would be losing all of that, PLUS, he would still be liable on the loan.
But, assuming for a moment that the equity is low, and he knows that he will remain obligated on the loan, then I would try to transfer the vehicle to her by using the DMV. Usually the recipient has to file the transfer document, and she may not wish to do so. But I would get a hold of a supervisor at the state DMV and work out the transfer, or the relinquishment of any ownership rights through them. Point out that the real owner, the one using the vehicle, is not insuring it. The equities are with your boyfriend.
BUT, if the supervisor will not agree to take the transfer of title, then I would find out the name and contact information for the assistant attorney general that advises the DMV. Dr. Settlement was a prosecuting attorney once, and as such, I dealt with the AG's office on many things. I think you would be pleasantly surprised to learn that the AG will often overrule her department personnel in order to make a fair result. Hence, one way or the other he ought to be able to get out of insuring the vehicle.
I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
