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How is an Auto Loan Divided in a Divorce in Texas?


Are you preparing for a divorce in Texas? A big part of the process will be determining who gets to keep what—and for many divorcing couples in Houston, vehicles are among the most challenging assets. For obvious reasons, an automobile cannot be easily divided. Within this article, our Houston divorce attorney provides an overview of the key things to know about the division of automobile loans in divorce in Texas.

Community Property in Texas: What is Means for Your Vehicles

Texas is a community property state (Texas Family Code §  3.002). The standard applies to all of a couple’s marital property, including vehicles. Here is an overview:

  • A Vehicle is Marital Property: If an automobile is marital property in Texas, it is subject to the community property standard. It is considered jointly owned by both spouses.
  • A Vehicle is Separate Property: If an automobile is separate property in Texas, it is not subject to the community property standard. It will not be divided in the divorce.

 Even if only one spouse’s name is on the title vehicle and/or loan, that car and the corresponding financial obligation may still be deemed marital property in Texas.

n Overview of Some Key Considerations When Splitting Up Vehicles in Texas

 Property division is consistently one of the most challenging aspects of a divorce. There are some unique considerations to keep in mind when splitting up vehicles as part of your divorce, including:

  • How Many Vehicles You Have: When a couple owns two vehicles, dividing them in a divorce is generally easier—especially if those vehicles have a similar value. You need to gather and prepare information regarding all of your automobiles.
  • The Total Value of the Cars: The value of your cars matter. Fair market value is the foundation. Remember, a car’s value is not what you paid for it—it is what it is worth now if it was sold to another party.
  • Any Outstanding Auto Loans: Most vehicles purchased in Texas are financed. Any outstanding car loans need to be considered. Debts can also be divided as “community property” in Texas. In general, a loan will run with the vehicle itself—though specialized financial considerations can be made during the divorce.
  • The Transportation Needs of Each Spouse: In order to work out a viable divorce settlement, it is useful to consider the current and future transportation needs of each spouse. Who needs a car more for their daily life? You should consider things like commuting to work, responsibilities like dropping kids at school, and other travel needs.

 Contact Our Houston, TX Divorce Lawyer Today

At Lindamood & Robinson, P.C., our Houston divorce attorney is standing by, ready to secure your future. Have questions about dividing vehicles or other personal property in a divorce? Our team can help. Contact us today to set up your confidential case review. From our Houston law office, we provide solutions-focused family and divorce representation throughout Southeast Texas.

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