Is a leased car considered an asset or liability?
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Is a leased car considered an asset or liability?
I am currently going through a divorce and, as a result, I have no car. I want to get one but am afraid of buying one in case my soon to be ex-wife is entitled to any of it. To that end, if I lease a car, is it classed as a liability and not an asset thus she can’t take it from me?
Asked on September 8, 2011 under Family Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The vehicle is not an asset, since you do not own it--it is owned by the financing company or the dealership (depending on exactly how the arrangement is structured). You spouse cannot get it from you, because it is not yours to transfer; she cannot get anything not owned by you.
The obligation to pay would be a liability, since it is a contractual obligation which you must meet; there is a monthly payment which you must make.
If you acquire too expensive a leased car, that could be held against you: it could be seen as an indulgence or a deliberate attempt to keep assets from you spouse, so if you splurge, the court may penalize you in other ways. Get something reasonable and practical.
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