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How are LEASED assets looked upon during equalization? Is the asset an asset or a liability becaue of the debt owed? IE - One leases a car for several years. How is this looke upon - asset or debt?
Hubby
Hubby
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hubby,
I would have to say it is a liability. At the end of the lease the vehicle would be turned in.
It would be a similar approach to a apartment lease. The apartment is not owned. -
A liability to whom ... before and/or after the seperation date.
If leased BEFORE said seperation date, liability is shared?
If leased AFTER said seperation date, liability belongs to said spouse?
HubbyComment
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I would have to say whomever signed the lease. If the lease was signed by both, then whomever is using the vehicle. It is definitely a situation that should be worked out between the parties. Ultimately the car will have to be returned. If the car is returned earlier the what the the terms of the lease contract spells out, I would think there would be significant penalties.Comment
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LV,
Whew ... thanks, I was just about to lease a vehicle. Guess I'll wait until AFTER the seperation agreement is done.
Thanks
HubbyComment
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I think of it much like the apt thing, but more as an expense. Like your rent shows up on your net family property statement as an expense in the budget area. Does that make sense?Comment
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In my situation, my ex and I were both on the lease. I didnt want the van due to the high cost per month and neither did he as he had a vehicle to drive and refused to give me that. When brought up to my lawyer she said then just turn it in, she said they do not deal with this type of stuff.
Well when your locked into a lease there is no way out. We still had 2.5 years left on it. I could not afford to keep it as I was getting no support and trying to get on my feet and find a job as I had been a stay at home mom.
He made over $100,000 a year and I felt that he could afford the lease and he said that he would just let it go to repo then. I couldnt let him do that either because then my credit would be affected. Anyways moral of the story is that leases are a night mare in divorce and I got stuck with it to protect my credit.
Good news now.....I just got rid of the nightmare as the lease came due
and could afford my own new car.....Yeah!!!
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Hubby,
From my own experience leased vechicles show up on your Financial Statement as a vechicles expense. Does not show up on Net Family Property Statement as the vehicle is technically owned by the leasing company.Comment
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I think that is what I was referring to Grace, just got all the jargon mixed up
Plus I filled out all the forms at the same time. The budget area. Basically it would show as an expense, like rent. Not really as an asset or a liability at all. You don't own the car or even part of it. You are buying the depreciation and interest.
The only exception I can think of would be if someone was doing some weird accounting- with a large down payment and intending to buy out the vehicle at the end of the lease term.... but then again - with a large down payment your monthly expense would be smaller. So I think I am just confusing things with that scenario lolComment
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