debt division portland oregon

How Is Debt Divided In Divorce In Oregon?

Goldberg Jones Divorce, Divorce Process, Featured Content, Finances, Spotlight Series Leave a Comment

In the state of Oregon, in terms of dividing debt and property during divorce, the general idea is for both spouses to emerge from on relatively equal footing and able to enjoy a standard of living similar to what they had during the marriage.

When it comes to the division of debt, Oregon uses the equitable distribution model. Equitable distribution is “A legal principle under which assets and earnings acquired during marriage are divided equitably (fairly) at divorce.

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Oregon State Division Of Debt

No matter the name on the title, credit card, mortgage, auto financing, or business loan, Oregon presumes both spouses contributed to the acquisition. It’s then subject to division in an equitable fashion. If you build up substantial liabilities during a marriage, the court views them as shared marital obligations.

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Does Equitable Distribution Mean Debt is Split Equally?


It’s important to note equitable distribution does not mean you divide everything equally. Assets and debts may be divided disproportionately depending on the unique factors of your case. You may wind up with a 40/60 split, but it’s also possible the court will determine a 50/50 division is fair.
Ultimately, the debt division decision accounts for need, earning potential, and other factors. Exceptions to this include things like gifts or inheritances.

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Debt Acquired During Marriage

Types of debt acquired during marriage include credit card balances, mortgages, auto financing, business loans and things of that nature then get distributed between spouses.

What if your spouse acquired debt without your knowledge?  From a legal point of view, the court doesn’t care whose name appears on the paperwork.

If your ex obtains a credit card behind your back, runs up an astronomical bill, it will still likely be a joint obligation. Generally speaking, if it’s amassed during your marriage, it’s most likely yours to deal with as well.

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Premarital Debt

While you will likely find yourself on the hook for the debt your ex built up during the marriage, there’s good news when it comes to the preexisting variety. Timing, however, is the key in this situation.

If your ex rang up thousands of dollars worth of student loans before you tied the knot, that’s not your problem. The same goes for those massive credit card bills that still pop up.

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What About Debt Accrued During A Legal Separation?

For debt following a separation, but before a divorce is finalized, the waters muddy a bit. If the court looks at necessities like electric bills and utilities, they may split them up. But if your ex goes on a lavish ski vacation, that’s a different story altogether.

As with most areas in divorce, dealing with debt gets twisted in a hurry. In the case of shorter marriages, things may be straightforward, but the longer a union, the more intertwined lives become, and the more complex matters get.

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Do Creditors Have to Abide By The Divorce Decree?


Dividing debt in divorce also comes with one unexpected additional hazard. If your ex fails to pay off any obligations the court assigns, it may come back on you.

Much to the chagrin of many divorcing couples, ending your marriage doesn’t automatically impact any preexisting financial agreements.

If your name remains on a home loan, credit card bill, car loan, or other similar contracts, you remain liable for those debts; even if the divorce agreement gives them to your ex.

Family courts have no jurisdiction to alter agreements with creditors. The divorce settlement can delegate debt and decree that your ex must pay back a balance. But that doesn’t take your name off the paperwork.

Part of the divorce decree can include stipulations like your ex has to refinance a home loan within a certain amount of time to remove your name. Still, that doesn’t always happen.

It’s important to stay on top of things like that to make sure they happen. This can impact your credit, among other things. If creditors come after you, you may wind up having to pay off the debt then sue your ex for restitution.

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