dividing debt oregon divorce

Divorce and Debt in Oregon

Goldberg Jones Divorce, Finances Leave a Comment

UPDATED: Finances often play a big role in why couples divorce. The strain of money worries can be a relationship killer. 

They’re also often at the forefront during the actual process. Deciding who gets what creates a ton of anxiety. Additionally, it surprises many people that, just like you split up assets, you also divide debts during divorce.

Credit card balances, mortgages, auto loans, and all the rest get distributed between spouses.

Like most states–41 out of 50–Oregon uses the equitable distribution model when it comes to splitting up assets. The same rules apply to debt, but how are these obligations broken up?

Related Reading: How is Property Divided in Divorce?

What is Equitable Distribution?

By definition, equitable distribution is:

“A legal principle under which assets and earnings acquired during marriage are divided equitably (fairly) at divorce.”

But what exactly does that mean?

Does Equitable Distribution mean we split debt equally?


It’s important to not 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.

Do creditors have to abide by my divorce decree?

Also, no.

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 pre-existing 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. Yes, even if the divorce agreement gives them to your ex.

Famliy 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.

Related Reading: Are You Responsible for Your Ex’s Debt in Divorce?

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