When a couple divorces, they often split assets and property. For instance, a husband and wife may jointly own two cars, both of which they have not fully paid off. In the divorce, one car goes to the husband, and the other goes to the wife. All good, right?
Not really. You still have to account for much more than mere possession. For example, spouses may need to refinance each car since only one person is paying on it. In cases where there is no car payment and the spouses have outright ownership, they still need to take care of title issues.
Why it matters
This issue matters for many reasons. For instance, if you are still listed as having to pay the monthly car payment, your credit score could take a hit if your spouse skips the payments.
If your name is on the car's title but your ex-spouse has it and drives it, you could still face legal issues if it is involved in an accident. It also can make for a hassle if your ex-spouse wants to sell it one day but does not legally own it.
The same general principle applies to real estate such as houses. If you and your spouse hammer out a divorce agreement that leaves the house to the spouse but does not detail anything about mortgage payments and the like, then your lender might end up going after you for any missed payments.
Sometimes, spouses are in a rush to get the divorce over with. They figure they will sort out the major issues now and get around to the details later. This is a mistake. It is worth taking the extra few days that may be necessary during the divorce process to sort out property titles and financing. This way, you minimize the chances of making mistakes you will regret later and can move on with your life better.