To remove an ex-spouse from a joint car loan, it is necessary to refinance the car, essentially purchasing it from the spouse, according to Credit.com. Changing the title over to just one name requires visiting the Department of Motor Vehicles and having both parties sign a change of title form.
If refinancing proves problematic and car payments are difficult to handle alone, Avvo suggests taking out a personal loan from a bank. Some banks may have less stringent rules about personal loans than the company that initially financed the car. If a personal loan can be obtained, the funds may be used to pay off the car loan, effectively dissolving the joint financing agreement.
For those who have received ownership of the car in a divorce settlement, another option for removing an ex-spouse from a joint car loan is to request a loan novation, says Avvo. A novation may be obtained from the lender and entails transferring loan ownership to the requesting party. The old loan agreement is replaced by a new one, and financial responsibility of the spouse for the car is relinquished. A last resort is selling the car and using the proceeds to pay off the loan.