Divorce Attorney Serving Oregon City & Milwaukie, OR & Surrounding Area
Serving Clients in Oregon City, Milwaukie, Lake Oswego, West Linn, Portland, Wilsonville, and Surrounding Areas
Diane has been assisting Oregon’s husbands and wives with divorce since 1987. Every divorce involves two major aspects: the emotional process and the legal process. Most divorce clients are going through both processes at the same time.
In handling the legal process of the divorce, Diane has four goals:
- To finalize the divorce to her client’s best advantage.
- To finalize the divorce as cost-effectively as possible.
- To finalize the divorce as quickly as possible without sacrificing quality.
- To finalize the divorce with as little stress for her client as possible.
Basic Divorce Facts
- The legal process starts by filing a petition with the court and serving your spouse via a process server or the county sheriff.
- The divorce process ends when a judge signs the divorce judgment. The judgment a) divides assets and debts, b) awards custody and parenting time, c) determines child support, d) determines amount and duration of spousal support (alimony), and e) makes the spouses single again.
- The legal process takes between 31 days and 12 months. The majority are finalized without a trial.
- There are three ways to finalize a divorce, that is, to obtain a divorce judgment signed by a judge: a) If Respondent does not file a Response with the court, Petitioner can submit a default judgment for the judge’s signature. The terms of the judgment are determined by Petitioner and Petitioner’s attorney; b) Petitioner and Respondent agree on the terms, both sign a stipulated judgment, and submit it for the judge’s signature; or c) The issues are tried in court and the judge decides and only the judge signs the divorce judgment.
WARNING: Before moving out of the marital residence, invest in an office consultation with Diane ($100) so that you fully understand all your rights and obligations. Diane has seen so many people damage themselves by remaining ignorant of their rights. Following a comprehensive divorce consultation, you will be able to make informed decisions that are best for you, your children, and your future.
WARNING: Do not sign any divorce document without first taking it to Diane for a full explanation of what you are gaining and losing.
Dividing Assets and Debts in Divorce Proceedings
In a divorce proceeding, the couple’s assets and debts will be divided between them. An asset or debt that is acquired during the marriage is deemed to be a “marital” asset or debt by the divorce court, even if the asset or debt is held in one spouse’s sole name, and will be dealt with by the court.
Can divorcing couples determine how to divide their assets and debts without the judge making the decision for them?
Yes. The great majority of divorces in Oregon are settled by the parties before the trial date. If the parties have decided how to divide the assets and debts, and have settled all other issues, a Stipulated Judgment is drafted by the attorney representing one of the spouses, and both sign it. The Judgment is then submitted to the Court and signed by a judge. The divorce is then final and the parties are single again. Division of assets is final. The issue of responsibility for debts is not so simple.
Can the spouses decide how to divide debts without the creditor’s knowledge?
Yes and no. If the mortgage, credit card, or loan was applied for with both spouses signing the papers, BOTH will be legally responsible until the debt is paid in full. When the couple divorces and the Divorce Judgment requires one of them to repay the debt, the other spouse is not “off the hook” with the creditor. The creditor was not a party to the divorce proceeding; therefore, the creditor’s contract rights have not been altered. If payments are not made as required in the loan contract, the creditor can sue one or both parties for the money. If a debt is in just one spouse’s name, it is best that that debt be assigned to that spouse in the Divorce Judgment.
What information is listed on each ex-spouses’ credit report?
Each ex-spouse’s credit report will show that he or she is liable on a joint loan and will NOT show that the Divorce Judgment requires just one ex-spouse to service the debt. Moreover, if the spouse who received the house in the divorce does not sell it or refinance the mortgage, chances are good that the other spouse will not qualify for a mortgage to buy a house for him/herself.
At trial the judge will require that the ex-spouse’s name be removed from the mortgage within a year or two, but allows the party receiving sole title to decide how to do it. In recent years, a few mortgage lenders have been willing to remove the ex-spouse’s name from the mortgage upon request. Usually the house must be refinanced or sold to end the ex-spouse’s loan obligations.
If the ex-spouse who is supposed to pay off a joint debt fails to do so, what can the other ex-spouse do?
Sometimes one party will not hold up his or her responsibility to pay a debt. The other party can pick up the payments in order to protect his or her credit rating or wait to be sued by the creditor. After the debt has been paid off, the wronged party can file a motion in the same court that granted the divorce, seeking to be reimbursed by the ex-spouse. If the party can prove that he or she paid off the debt that was assigned to the other party in the Divorce Judgment, a judgment will be granted in favor of the party who paid the debt and against the party who was supposed to pay the debt.
What happens to the house?
If the parties each want to retain the house purchased during the marriage, the judge has the authority to award it to either party. The judge also has the authority to order the house to be sold and the authority to rule how the proceeds will be spent or divided. The judge usually requires that the proceeds first be used to pay off all the debts incurred during the marriage in order to disentangle the parties’ finances.
Is there any difference in the manner in which a divorcing couple will divide the assets and debts, compared to how the judge will divide them?
Probably. The judge is restrained by statute and by rulings from the Oregon Court of Appeals & the Oregon Supreme Court when he or she rules upon division of assets and debts. In 1977, the Oregon Court of Appeals ruled that property division should disentangle the spouses’ financial affairs and make them free from each other’s interference. The couple can be far more creative in structuring a Divorce Judgment that meets their unique needs and circumstances.
Moreover, Oregon Statutes require the Court to consider a homemaker’s contribution to the marriage as a contribution to acquisition of marital assets. Thus, the family breadwinner does not leave the marriage with all the assets. Nor are the assets divided based upon each party’s income during the marriage.
What happens when one or both spouses brought assets or debts into the marriage?
In an often cited 1985 ruling, the Oregon Court of Appeals found that the more intertwined the parties’ financial circumstances, the more likely an equal distribution should be ordered even though a short-term marriage was involved, and one spouse did not bring as many assets into the marriage.
How are assets and debts handled when all were acquired during the marriage?
The standard formula for property division in a divorce requires first placing a market value on each and every asset (without regard to which spouse holds title), including the present value of a pension plan. These values are added together and the total debts are subtracted. Each spouse receives half of the value of the total assets.
In dividing the assets, some may need to be sold, so that each spouse leaves the marriage with half the value of the marital estate. The judge may order a certain property be sold and the proceeds used to pay off certain debts.
Another way to equalize property distribution is for one spouse to receive a money judgment wherein the other spouse will pay a sum of money plus interest in the future. Most such judgments require monthly payments to begin shortly after a judge signs the Divorce Judgment.
What happens to an asset that one spouse brought into the marriage?
If a party has brought an asset into the marriage, that party will usually leave the marriage with that asset or the original value of that asset UNLESS it has been commingled with joint assets, or with the spouse’s assets. Regardless, the other spouse will share equally any increase in value of that asset during the marriage, including the first spouse’s pension plan.
The more intertwined the parties’ financial circumstances, the more likely an equal distribution would be ordered by the judge even though a short-term marriage was involved, and even though one spouse did not bring as many assets into the marriage.
Example Number One:
Kate brought a house into her marriage with Jerry and she kept sole title. The couple lived in Jerry’s house during their marriage, while Kate’s house was rented out. The rental income Kate received was deposited into Kate’s bank account and was never used for marital expenses. Kate paid repairs and expenses associated with the rental house out of these funds and used most of the remaining funds on personal expenses.
When the couple divorced Kate retained the rental house, but she had to share with Jerry the house’s appreciation in value during their 10-year marriage.
Example Number Two:
During a four-year marriage, Lynn transferred a co-ownership interest to David in her pre-marriage residence, and the parties contributed substantial marital funds toward the improvement of this house. The Oregon Court of Appeals ruled that the parties have equal interest in the residence.
Lynn was awarded sole title of the house in the divorce proceeding. However, the total value of the house was included as a marital asset and David received half of its value by receiving other marital assets.
What happens to a loan from one spouse’s relatives?
Loans from relatives are treated by the divorce court as any other debt IF there is a written agreement AND the couple was making regular payments pursuant to the agreement. If not, the loan will be treated as a gift and will not be included as a debt when the couple’s assets and debts are divided.