February 7, 2012

Accidentally Omitted Liabilities in Divorce

I prevously blogged about omitted assets, and what the court can do if an asset is  left out of property division.  What do you do if you have an omitted liability in your Oregon divorce vs. an omitted asset?  I advise everyone to pull a copy of their credit report to make sure they know what liabilities are showing up, but this system isn’t perfect.  With the condo and home  foreclosures in the Portland area, it is not uncommon for bills to be sent to a house which neither party occupies, and for both parties to miss them.  The language of the omitted asset statute, ORS 107.452 is clear that it only applies to liabilities, so what to do if you  if you discover an omitted liability after your divorce is final?

If you accidentally leave a debt out of your property division, and discover it later, the court can still help. Oregon Rule of Civil Procedure 71 B allows a party relief from a judgment for several reasons, including:

  1. mistake, inadvertence, surprise, or excusable neglect;
  2. newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial;
  3. fraud, misrepresentation, or other misconduct of an adverse party.

If a liability is accidentally omitted, or intentionally concealed by your spouse, the court has the power to re-open the Oregon divorce case and include it in the distribution. There is no substitute for due diligence during a divorce, including scrutinizing your credit report, and making sure all assets and liabilities are accounted for. However, if a liability is omitted, a lawyer can help make the liability distribution fair.

The lawyers at Stephens & Margolin LLP have substantial experience helping divorced Oregonians with post-judgment issues.