Dealing with Foreclosure in Oregon, Part 8

Dealing with Foreclosure in Oregon
(c) 2009 Benjamin D. Knaupp
Attorney at Law
Admitted in Oregon since 1997

#8. How do the debts of a spouse or ex-spouse affect me?
Many people do not understand how the law treats debts of a spouse. Usually, you are not liable for the debts of your spouse or partner, although some exceptions exist. There are also many questions about debts when a divorce or a separation has occurred or is pending. Often people involved in a divorce fail to get proper legal guidance and financial damage becomes permanent. There are also increasing numbers of persons cohabiting and sharing a residence as domestic partners. While a new law in Oregon governs registered same-sex domestic partnerships (basically giving them the same rights as a heterosexual married couple), the law concerning heterosexual domestic partners is based on a body of case law in Oregon that is complex and unknown even to most attorneys. According to the decisions in these cases, unless one partner successfully sues the other partner for a judicial determination of the assets and liabilities of the couple, only the person who signed the promissory note is liable for the debt on a home, even though both people in the relationship lived in the home.

Without the help of a knowledgeable attorney to understand the legal issues involved, you could be left holding property with no equity and all the debt, while your ex-spouse has all the assets. If you are heading toward foreclosure, and are divorced or in the process of getting a divorce, you need to get proper legal advice about you debts from a lawyer that is trained in bankruptcy, real estate finance, and debt matters.

This ends my series on the 8 important questions to know when you're facing foreclosure. Next, I will post regular updates on some of the legal issues I am seeing unfold in the Portland market in real cases (confidentiality protected of course). If you have a friend in danger of losing a home to foreclosure, direct them to watch my video explaining the 8 foreclosure questions in brief. If you live in Beaverton, Hillsboro, or Portland Oregon, give me a call with your questions or comments, or post a comment to this blog.