Joint loan after split - can anything be done?

Rosie1978

I'd really appreciate any advice anyone could give me. I'll try not to out myself with details but essentially....

- Couple take out a loan jointly
- Couple split suddenly a few years later
- Couple continue to pay back loan, despite this
- However one of couple needs to pay off their half so they can get a new car loan and is in position to do so with help from family
- Other half of couple not in position to do so, nor in position to get another loan to pay of their half of original

So is there anything at all that can be done to 'split' the loan? I've tried to think of every possibility and I can't so am asking more out of desperation than anything!

I hope the above makes sense...

stevenhp1987

I'm going to call the one with cash, Person A, and the one without Person B.

No, you cannot "split" a loan up.

The only option is to take out another loan to pay this off, but as you say Person B is not in a position to do so.

The only way Person A could remove themselves from liability would be to pay the whole amount off and hope that Person B is honest enough to pay them back, otherwise, Person B gets off lightly without paying.

Person A would then have to file a notice of disassociation to remove Person B from their credit report. If Person B is struggling, this will help Person A get the car loan they wanted.

But I'm afraid, there is no "easy answer". If Person A truly wants it closed, they would have to pay it all themselves. A loan cannot be split. Right now, if Person B fails to pay, the banks can sue Person A. If you split the loan, then they would have only one person, who from all accounts seems in a worse financial position, so if they defaulted, the bank would find it harder to enforce their position in court.

Rosie1978

I suspected as much. Thank you for taking the time to reply. Such a frustrating situation.

tonyh66

could the loan not be overpaid by the person with the money, this would reduce the size of the payments so the person without money could afford to continue to pay loan.

arbroath_lass

Can't the one with the money just use the money to buy a car?