major purchase divorce

Can You Make a Major Purchase During Divorce?

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The divorce process comes with any number of expenses. You have court costs, filing fees, an attorney to pay, and even a change in tax status. In many cases, you need to find a new place to live. Perhaps your custody arrangement necessitates buying a new car to shuttle kids back and forth. As things are ongoing, the question arises, can you make major purchases during a divorce?

If you buy a car during divorce proceedings, can you lose it when you come to the division of property? Does it make you look bad in the eyes of the court?

Like most elements of divorce, you have a lot to consider before you go on a spending spree.

How Major Purchases Impact Divorce

big purchase before divorceOregon’s equitable distribution model influences how courts deal with major purchases made during a divorce. Where the money came from colors how they look at and ultimately classify acquisitions.

Using shared funds usually results in that item being treated as marital property. On the other hand, if you use outside resources to make a purchase, it may fall under the separate property umbrella.

Oregon generally views each spouse’s income as marital funds. Major purchases made with these funds will also likely be viewed as such. The courts also retain the power to use these items to achieve an equitable split in the division of property.

Related Reading: How is Property Divided in Divorce?

What If You Make a Big Purchase During Divorce?

There are no specific, hard-and-fast guidelines for splitting assets under Oregon’s equitable distribution laws. The goal is for both parties to emerge on relatively equal footing and for both people to maintain a standard of living similar to during the marriage.

When it comes to a major purchase made during divorce, many factors come into play. A big one is where the money came from.

If you use separate money to buy a car, you’re probably good. However, if you use a shared account or similar funds, the court may view it as an asset to divide.

Spending also influences divorce in other ways. For instance, if you claim you can’t make child support or spousal support payments, but throw around cash with abandon, it reflects poorly on your case.

It’s one thing to buy a safer, more reliable car to drive the kids around or pick up a couch for a new place. But if you buy a jet ski and claim to be broke, that looks bad.

Related Reading: Common Mistakes Men Make in Divorce

What If Your Spouse Makes a Big Purchase During Divorce?

Making major purchases during a divorce can impact your case. On the other hand, they also affect your spouse’s situation in similar ways.

If your soon-to-be ex argues for spousal support but buys a snowmobile, or something else impractical, it won’t likely help their cause.

One frequent worry is that the other side will run out and use community funds on big-ticket items. Warring spouses have been known to drain joint accounts. Reckless spending like this can put you in a hole. If you have this concern, there are ways to prevent this type of behavior.

You should always keep an eye on your finances. Additionally, depending on the circumstances, it’s possible to convince the court to call for a temporary financial restraining order.

This action allows for regular purchases, like gas or groceries. But when it comes to major purchases with shared funds, both parties need to approve.

Related Reading: How Is A Business Divided During A Divorce? Can You Protect It?

Financing Major Purchases

Most major purchases are financed. Cars, houses, furniture, electronics, and the like. At times it may look like your future ex is on a spending jag, but that’s not always the whole truth.

Whether or not such purchases are game for the division of property varies from one case to the next. Again, if a down payment comes from shared funds, the court will likely account for that.

However, if that down payment originated from a separate source, the court may declare the item in question, and any future payments, belongs to the purchaser.

Related Reading: Student Loan Debt and Divorce

Protecting Yourself

It’s important to know, divorce doesn’t negate any loans, contracts, or financial deals you and your spouse entered into while married. This fact goes overlooked all too often.

If you and your ex purchase something together and make regular payments, both names stay on the paperwork. Even after divorce. It’s possible to refinance loans and the like, but ending your marriage doesn’t automatically get you out of pre-existing agreements. The original terms remain in place.

This is important because it can impact your financial future, and continue to do so for a long time.

Say your spouse winds up responsible for a joint car loan. If your name remains on the records, and any payments get missed, it negatively impacts you. It can ding your credit score and creditors can even come after you.

It’s best to have your ex refinance any loans and remove your name. You may be able to have a provision like this written into the final divorce agreement, even a deadline.

Still, follow-through is another matter entirely. Definitely make sure this happens and be aware of the potential impact if it doesn’t.

Odds are, you’ll have to make at least a few major purchases while handling your divorce. It’s important to understand how these influence the proceedings and know ways to reduce the havoc they can cause.

Stay away from impulse buys. Think through all big-ticket items in a calm, logical manner. If you do have to have to make an expensive purchase, don’t hide it, know where the funds come from, and be aware of how it may influence your situation.

Related Reading: Is Oregon a Community Property State?

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