What Happens in a Divorce if My Spouse/Partner Has All the Debt in Their Name?

Spouses in marriage and partners in registered domestic partnerships may acquire and accumulate debts during their relationship. Some people bring debt in the marriage or partnership. The name on the debt may determine the person financially responsible for paying it. However, debt in only one spouse or partner’s name may still be the responsibility of both parties.

During the relationship, couples may agree to share responsibility for paying debts. Funds acquired in the marriage or partners jointly contribute to financial obligation. Sometimes, marital or partnership monies help pay off the debt that the spouses or partners brought into the union.

When spouses or partners seek a dissolution of marriage or partnership, respectively, their debts are subject to division and distribution by the judge. The court must determine when and how the parties acquired the debt.

Each spouse may have separate debt they acquired before the marriage or a registered domestic partnership. During the marriage or partnership, the couple may accrual marital debt. The couple lists their debts, and the court determines if they are separate or marital debts.

Oregon law divides the marital debt by equitable distribution, even if the debt is only in the name of one of the spouses or partners. Equitable distribution is not automatically an even split. It assigns the financial liabilities between the parties based on what is fair.

However, the parties may decide on how to divide the marital debt. They may choose to split the amount or arrange for one party to assume sole responsibility for a debt. A spouse or partner may even agree to pay for the other party’s separate debt.

If they cannot agree on the distribution of the marital debts, the spouse or partners must submit the Assets and Liabilities form to the court. The judge reviews the documents and other evidence. Then, the court allocates partial or total responsibility of a marital debt to the parties.