Legal Question in Credit and Debt Law in Massachusetts

: separation between unmarried couples

The short answer is no. You can refinance the loan.

Re: separation between unmarried couples

The next time you begin to acquire property and assets with another person without the benefit of marriage, I would strongly suggest the creation of a Domestic Partnership or Cohabitation Agreement.

Without marriage, there are no rules to allocate ownership of property, assets, and debts, when a relationship ends.

It is extremely unlikely that a financing company will allow you to take the employed individual off of the loan - that would not be a good financial decision for them.

The next question is who is on the title to the automobile. I have a feeling that the unemployed person's name is on the title (owns the car), but the employed persons name is on the loan. This means the employed person may not take exclusive possession of the car, and may not sell it unilaterally.

The best option may be to sell the car and then continue to make payments until the loan is paid off.

Re: separation between unmarried couples

When two parties are jointly liable on a loan obligation, the only legal means to have one of the parties discharged from liability is to have the loan company execute a release in favor of that party. This could be accomplished by one of the parties procuring a "take out loan", paying off the original loan company with the new proceeds, obtaining a release of the "unemployed party" and continuing to pay the substitute loan company.

Re: separation between unmarried couples

When two parties are jointly liable on a loan obligation, the only legal means to have one of the parties discharged from liability is to have the loan company execute a release in favor of that party. This could be accomplished by one of the parties procuring a "take out loan", paying off the original loan company with the new proceeds, obtaining a release of the "unemployed party" and continuing to pay the substitute loan company.

Re: separation between unmarried couples

If the lender agrees to remove that person from the loan, then yes. There is little incentive for them to do that. If the lender does not, you need to refinance. Also, be careful with future purchases.