After deciding to end a marriage, many spouses separate prior to finalizing their divorce. Although still married, they may obtain separate residences, bank accounts and lead separate lives during their separation.
It is not uncommon for one spouse to make the majority of the payments on joint debts during the separation. For the spouse making payments on marital debts during separation, it is important to know whether or not that spouse might receive a credit for any portion of these payments in the property division when the divorce is finalized.
In Clapp and Clapp (decided in November 2010), the Oregon Court of Appeals held that a spouse shall receive credit for mortgage payments made by that spouse on the family home during a parties' separation and prior to the finalization of a divorce.
Oregon law directs that, in a divorce proceeding, a court divide marital property and marital debt in manner that is "just and equitable" under the facts of each case. When dividing marital property, the court may factor in payment of a marital debt by a party between the time the parties separated and the time the parties finalize their divorce.
The husband in Clapp had not made any payment on the mortgage for the family home after the parties' separation, and the wife had paid $28,143.50 toward the mortgage during the parties' separation. In Clapp, the trial court did not give the wife any credit in the property distribution for payments that she made toward the parties' mortgage during the parties' separation.
Credit for Mortgage Payments in Property Distribution
The Oregon Court of Appeals modified the trial court's distribution of marital property in Clapp to give wife credit for husband's portion of the post-separation mortgage payments that wife paid toward the mortgage on the marital residence. In Clapp, the Oregon Court of Appeals stated that "the mortgage on a family home is a marital debt that must be accounted for in the property division."
If you have concerns about the fairness of your property division in divorce, or fear your spouse may attempt to leave you with an inequitable share of the marital debt, speak with a lawyer about your options. A lawyer experienced in property division can explain your legal rights so that you can make an informed decision about issues relating to property division in your divorce.