Joint Accounts after separation

[scoobydoo]

I anticipate that we will have 2 joint financial obligations after the separation. One is a car loan we are both responsible for and the other is my son's RESP.

The ex is going to get the car and I propose we will both make payments equal to 1/2 the monthly payment until its paid off. Maybe I should just increase the support payment, sign the car over to her and be done with that?

I am paying the full amount of the RESP now but would like to split it 50/50.

Can I legally build into the support agreement that if she does not keep up her payments that I can reduce the following months spousal payment to an equal amount so that I can make the payment?

[Mess]

I think it would probably be legal (there is an unequivical statement for you!) but doesn't it unnecessarily complicate your agreement and your life? I would sign the car over to her, and she can pay for it with the support you pay.

If you do it the other way, you'd have to keep track of all the paperwork if she misses a car payment and you have to reduce the spousal. Otherwise she could just come back and say you didn't pay spousal and deny it had anything to do with the car.

Worse for you if she ever signs with the FRO, you would never keep an agreement like that straight with them, legal or not.

Also if she misses a payment and this is a joint loan, this goes to your credit record as well. I think it is just a tangle. The point of divorcing is to untangle yourself. Simplify your life with one cheque (or prescheduled bank transfer) each month and you never have to speak to her again. Even if you are on good terms now, keeping it simple and straightforward is more likely to keep things on good terms.

As far as the RESP goes, if she doesn't pay her half, what are you going to do? Take her to court? There's no way to impose that without it costing you more money. The money you put into the RESP should go towards your third that you would have to pay for the child's post secondary and if she pays anything into it, she can apply that to her eventual share.

[scoobydoo]

It doesn't matter if we both pay 1/2 or she pays the full amount. We are both responsible for the loan. The only thing is she will be judgment proof once we separate (as her only income will be from me) so she could just say #$%%$ it and default on the loan then they will come after me.

So to put it in practical terms if the car payment is $350 month and I pay that to her as support then she could turn around and use that money to buy her own car. At least if we split the payment $175 each she has a lot less options to screw me. I think.

[dadtotheend]

Take over the loan yourself by refinancing it from joint to your name only and get her half via division of family property. As has been said above, get out of bed with her financially!

If the RESP and the loan are of similar value, offer to trade her ownership interest in the RESP for you assuming her half of the loan.


Get out of bed with her financially. Good advice!!!

[scoobydoo]

I've talked to a couple of lenders and the advice has been just that. The only way to unjoint something is to pay it off. However, we have no assets really with which to offset the liabilities and trade for.

This must be not all that uncommon to end a realtionship and still have joint debts. What do people do?

[dadtotheend]

You repay the loan with another in your name only.

[NBDad]

Whose name is the loan for the vehicle in? Whose name is the vehicle registered under?

You can do a bunch of things as long as she agrees to it.

1. Sell the car, take the proceeds, pay off the loan and split the remainder (if any) 50-50...if you cannot agree, this is the option the courts will choose for you.

2. One of you can put the loan into your name entirely. The trade off is that you should be getting an equal valuation out of it via the equalization. If there are limited assets, this means whoever holds the loan, gets the car.

3. Perhaps you could agree to put the loan into your name only, but she keeps the car. Then you take the amount of the loan (say $350/month) and reduce the spousal support payment by that much/month until the loan is paid. (If she doesn't qualify for putting the loan in her name alone, then this may be the best option for you, especially if there are limited assets in play)

[scoobydoo]

Well the bluebook value is 6500 and the outstanding loan is 14k. We are both joint on the loan an both registered owners. I will probably go with Mess's suggestion to pay her the support and she will pay the loan. She wants and needs the car and since the payments come out of her spousal support I get the tax break.