From what you have stated, it sounds like the car was in both your names and, rather than refinance it in her name, you signed a Power of Attorney DMV document so that when she paid the car loan off, she could legally put the car into her name alone. Of course, how a Power of Attorney works, even at the DMV, can vary from state to state. Because of this, you may want to check again with your local DMV for clarification.

The common problem with these types of plans, as you have found out, is that they are totally dependent on the ability of the other party to pay the loan off as promised, as there is no real legal motivation for them to do so. Unfortunately, many people going through the divorce process do not realize that any financial agreements that were entered into while married—as with this car loan, for instance—still stand after a divorce. A divorce decree has little if any affect on accounts that are jointly shared. In other words, since your name is on the car loan agreement, you are still legally liable for the payments.

Considering this, it might be wise to contact your lender on the car and make some interim payment arrangements yourself until your ex-wife can either make the payments again or until you decide if you want to keep the car yourself. Either way, at least you might be able to stop the repossession—and keep that kind of possible notation off of your credit report, along with any more late payments.

You may also want to contact an attorney to see what other options for this situation there may be in your state.

For more information on divorce and credit, you might read “How Can I Protect My Future Credit From Being Damaged By My Ex-Spouse’s Credit?”