Albuquerque Divorce Lawyer Blog

Unlike other states, in New Mexico, the process for obtaining a legal separation is nearly identical to that for getting a divorce. Parties often mistakenly believe that they can get a legal separation faster and cheaper than they can get a divorce. However, in granting a legal separation the New Mexico courts will still need to divide all of the property and debts, and determine child custody and child support, which means that obtaining a legal separation, is not any faster than the divorce process. Nor does it save on attorney fees.

Most of the same documents will need to be filed as with a divorce and nearly all of the same steps will be taken by the court, except that at the end of the legal separation process the parties cannot legally remarry. In the end, if a divorce is inevitable and the end objective, then a legal separation will greatly increase the attorney fees, time and stress of the process.

This leads to the question, why file for a legal separation? Some parties may pursue a legal separation for religious reasons if their church does not frown on legal separation the same way it does on divorce. Others may file for legal separation rather than divorce because in some cases both parties may keep the health benefits earned by one spouse if they are legally separated but not if the parties are divorced.

Given the limitations of health care in the United States, this second reason can be a powerful incentive for seeking a legal separation rather than a divorce. However, the health care issue can be pretty tricky. Not all insurance policies allow continued coverage for parties that are legally separated. It is therefore important to check with the individual policy before pursuing this option.

Essentially, anyone contemplating a legal separation rather than a divorce should consult with an experienced divorce and family law attorney. It may be that a legal separation is not the best route. And even if it is, it is important to understand all of your rights and obligations in moving forward.

Sarah Armstrong
Albuquerque Attorney
www.CollinsAttorneys.com

One of the questions most frequently asked by divorce and family law clients is "How long is this going to take?" There is no easy answer to that question. The first question is where in New Mexico are you filing your divorce, paternity or family law action? The case load for the courts that cover Albuquerque, Rio Rancho and Santa Fe are pretty heavy, so it generally takes several months to get a hearing date in those areas. This wait applies to each and every hearing.

Hearing dates are important because that is the time when parties go before the judge on specific issues related to their divorce when they cannot resolve the issues themselves. Thus the fastest way to conclude the process is through early settlement and/or mediation. If the parties can agree on a the division of property and debt, child support and child custody, and other issues related to the divorce, then they can incorporate those decisions into a marital settlement agreement which upon filing with the Final Decree of Dissolution of Marriage will conclude the process. This can be completed in a matter of weeks when the parties are so motivated.

Often this is not possible for any number of reasons, some legitimate, some not. In many cases, each every step of the divorce is a struggle requiring the intervention of the Court. Each time the court's assistance is enlisted by way of a Motion, the process if further delayed due to long wait necessary to get a hearing on a Motion. Finally, after what could be months extending into years, the parties must at some point go to trial. A trial setting takes even longer to get than a Motion hearing.

In sum, the most efficient way to complete a divorce or family law matter in New Mexico is to understand your rights and responsibilities. Then hope that the other party has done the same. If both parties can behave rationally and reasonably, the process can move pretty quickly. In the absence of reason and rationality, the process can take a very long time. In the case of a high conflict divorce or family law proceeding, the duration of the process is probably the least of your problems. Keep this mind before declaring war on your ex.

Sarah Armstrong
Albuquerque Attorney
www.CollinsAttorneys.com

Jurisdiction is the term used to refer to a court's authority to decide certain cases. In order to hear a case, the court must have jurisdiction of the subject matter of the case and over the parties involved in a case. In a divorce or family law case, issues of jurisdiction can get somewhat complicated when the parties are living in different states.

In New Mexico, the district courts (as opposed to the magistrate or metropolitan courts) have subject-matter jurisdiction over family law cases. The baseline rule is that any person can file a petition for dissolution of marriage with the district court of the New Mexico County in which they have resided for at least six months. The New Mexico resident can file the petition whether or not their spouse currently lives in New Mexico.

However, in cases where the spouse lives outside of the state, the New Mexico courts may not have personal jurisdiction over that spouse and may not be able to issue a complete divorce ruling. The New Mexico courts can exercise personal jurisdiction over the out-of-state spouse under the following circumstances: 1) the out-of-state spouse agrees to submit to the jurisdiction of the New Mexico courts; 2) the out-of-state spouse actually participates in the divorce litigation by filing pleadings and appearing at hearings; or 3) the out-of state spouse lived in a marital relationship within New Mexico at any point in the past.

If none of the preceding conditions exist, the New Mexico district court may have jurisdiction to dissolve the marriage, but may not be authorize to distribute any of the parties' property or debts. The general rule is that the courts here have no jurisdiction over property located in another state without the consent of both parties. The issue of jurisdiction can be further complicated if there are child custody or child support issues between states.

Improper jurisdiction can result in an entire divorce decree being set aside, including the orders from the court addressing the division of property and debt, alimony, child custody and child support. Anyone faced with a divorce action in which one spouse lives outside of the state of New Mexico should consult with an experienced divorce and family law attorney prior to initiating court action in order to ensure that jurisdiction is proper.

Sarah Armstrong
Albuquerque Attorney
www.CollinsAttorneys.com

The occasional trip to the casino or racetrack can be a fun and harmless outing. But with so many casinos to choose from, especially in the Albuquerque and Santa Fe area, many New Mexicans know from personal experience that gambling can often get out of control. Not infrequently in New Mexico, gambling issues lead to divorce. Divorces are complicated and contentious particularly in the division of property and debt. They become doubly so in the face of gambling debt. Though much of the damage may already be done, there is some relief under New Mexico law for the innocent spouse.

As a community property state, the general rule in New Mexico is that all debts incurred during the marriage are community. This means that upon divorce each spouse shall be responsible for payment of fifty percent of that debt, no matter which spouse actually incurred the debt. However, the New Mexico legislature has recognized the potential unfairness that would result to innocent spouses if the traditional community property rule is applied to gambling debts. As a way of addressing that potential unfairness, the legislature added NMSA §40-3-9.1 to the domestic affairs statutes, which provides that a gambling debt incurred by a married spouse becomes the separate debt of the spouse that incurs the debt.

While the law stating that gambling debts are separate is clear, identifying those debts during a divorce may be tricky. Often gambling debts can be masked as credit card debt because the incurring spouse took out cash advances to pay for gambling. Or parties may take out a home equity loan in order to pay off one spouse's gambling debts. Thus, it is very important for parties to a divorce where one or both spouses have incurred gambling debts to consult with an experience New Mexico divorce and family law attorney in order to ensure that a spouse does not wind up taking on debt as part of a community property settlement that should really be apportioned to the other spouse.

Sarah Armstrong
Albuquerque Attorney
www.CollinsAttorneys.com

One of the most complicated and contentious issues in a divorce is the division of marital property and debt. The first great challenge is often identifying and valuating the marital property. Given that New Mexico is a community property state requiring equal division of all marital property and debt, both parties have a significant interest in making sure that all marital assets are properly identified and valued.

Unfortunately, sometimes one or both spouses will try to manipulate assets or asset values. They may try to classify community property as separate property. Other times, one or both parties will try to distort the value of the property, up or down, depending upon motive. Worst case, one or both parties will try to hide assets.

So what can be done if a spouse suspects that the other spouse is hiding assets? The first step is to use the tools available under the New Mexico Rules of Civil Procedure and begin the discovery process. Discovery is the system devised by the courts for the exchange of information in court cases and it can include written requests for information (called interrogatories, requests for production and requests for admission). In a divorce case, the main focus of discovery is getting both parties to accurately identify all of their debts and assets. The discovery process also allows the parties to hold depositions, which is an interview, held under oath at which the spouse being interviewed can be required to answer questions about the existence of assets. Parties can also be required to bring documents to depositions.

If the parties have engaged in the traditional discovery process and one spouse still believes that the other is hiding assets, it may be time for that party to think about hiring an investigator. Such investigators are typically certified public accountants who are trained in reviewing financial records to look for evidence of missing assets. Basically they are looking for a paper trail connecting various deposit and receipts and tracing where all of the marital income went. Sometimes the investigator is appointed by the court as an expert charged with reviewing the financial records provided during discovery.

Hiring an investigator or asking the court to appoint an expert can be very expensive. Neither party is advised to go down this road unless it is absolutely necessary. Often a good forensic accountant will charge more per hour than the attorney. Often a basic review of the documents provided during discovery will show where all of the parties' marital income has been spent and that there isn't' anything to hide. An experienced family law attorney may be able to trace that money and dispel fears of hidden assets without having to hire an expert. Therefore, if a spouse believes that another spouse is hiding assets it is very important to review that claim with an attorney before proceeding.

Prenuptial agreements (also called premarital or antenuptial agreements) have been recognized and enforced by the New Mexico courts for many years. However, in 1995 the New Mexico legislature passed the Uniform Premarital Agreement Act, which provides specific rules for the formation and enforcement of prenuptial agreements and includes requirements that all prenuptial agreements must be in writing and its terms must be fair. Failure to follow the rules can result in difficulty enforcing the agreement in case of the later divorce of the parties. In case of a divorce, the validity of the agreement will affect the division of property and debt and alimony among other issues.

In order to avoid a determination that a prenuptial agreement is grossly unfair to one party, both parties should have legal representation when negotiating a prenuptial agreement, there should be full disclosure of both parties' income and assets and the prenuptial agreement should not be presented for negotiation to close the wedding date. Following these suggestions can help bolster the validity of the prenuptial agreement by showing that both parties were fully informed of their rights when signing the agreement and that neither party was pressured to do so.

Although the general rule underlying prenuptial agreements is that competent adults are free to enter into whatever contracts they choose, with some limitations. In New Mexico, prenuptial agreements can cover the following topics: 1) present and future rights and obligations with respect to property, including income or earnings; 2) the right to manage, sell and encumber property; 3) division of property upon the death of either party or divorce; 4) the making of a will and power of attorney; 5) ownership and distribution of the proceeds from a life insurance policy; 6) the choice of law that will govern the agreement; and 7) anything other topic that does not violate the public policy of New Mexico.

While the rules governing prenuptial agreements may seem straightforward, they can be tricky, especially a determination of whether or not a provision violates public policy. Therefore, it is very important that both parties contemplating entering into a prenuptial agreement consult with a New Mexico Divorce and Family Law Attorney who can advise each party of their rights under New Mexico law and help ensure that a prenuptial agreement will stand up in Court if it is ever challenged.

Sarah Armstrong
Albuquerque Attorney
www.CollinsAttorneys.com

One of the final steps in completing a divorce is the entry of the Marital Settlement Agreement. The Marital Settlement Agreement provides the formal division of the parties' property, assets and debt. It also addresses alimony, spousal support, taxes, and other financial issues affecting the parties.

In New Mexico, the Marital Settlement Agreement must be signed by both parties. The Marital Settlement Agreement is typically adopted as an Order of the Court through the Final Decree of Divorce. Problems often arise as a result of one or both parties' refusal to abide by the terms of the Marital Settlement Agreement.

In cases where the divorce was granted and the Final Decree of Divorce was filed in the New Mexico Courts, either party may file a Motion to Enforce the Marital Settlement Agreement in the court where the divorce was granted. The District Courts in Albuquerque, Rio Rancho, Santa Fe and several of the other courts throughout New Mexico have a self-help divisions that will provide forms for this process in case the parties cannot afford legal counsel. The forms are also available online.

Problems often arise out of property and debt divisions from other States. Many New Mexico residents are faced with the breach of an out-of-state Marital Settlement Agreement. Unfortunately, enforcement of another state's orders can be complicated. An out-of-state Order addressing the division of property, assets and debt must typically be addressed in the court with original jurisdiction over those issues. Unlike many cases where a civil judgment may be domesticated in New Mexico for enforcement purposes, domestication of a family law Order is often not an option in family law.

The general rule is that the state court that grants your divorce maintains jurisdiction over the enforcement of any orders and decrees associated with the divorce. There are as always some exceptions. There is an exception for child support where the state in which the child resides may enforce child support obligations. Likewise, child custody jurisdiction may vest in another jurisdiction after the child has resided in the new state for 6 months. With those exceptions, the original court maintains jurisdiction over most matters related to the divorce such as the division of property and debt, spousal support and alimony.

In case of problems with enforcement, it will typically be required that a proceeding in the state of original jurisdiction be initiated. In that instance, it would be important that the obligations under the Marital Settlement Agreement be found by the Court to be a judgment. Once this is done, and the amount is fixed, the judgment may then typically be domesticated in New Mexico for future enforcement.

These issues can become very complicated very quickly. It is important to determine the proper way to proceed prior to seeking court relief. False steps could become extremely costly if the Court refuses to hear the claims due to lack of jurisdiction. It would be wise to seek the advice of a New Mexico divorce attorney when faced with this situation.

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Being served with divorce papers is extremely stressful and emotional. Often times, the person served has no idea what to do once served. Though the divorce process can be confusing, the initial steps are pretty straight-forward.

The first legal step in a divorce action in New Mexico is the filing of a Petition for Dissolution of Marriage, which must be personally served to the opposing party. Once you have been served with the Petition, you have 30 days to file your response, which is called an Answer. At the Second Judicial District Court in Albuquerque, all responsive pleadings, including the Answer, must be filed with the clerk on the first floor of the Bernalillo County Courthouse. Likewise in the Thirteenth Judicial District in Rio Rancho, the Answer must be filed on the first floor with Sandoval County District Court Clerk.

If you are served with a Petition, it is a good idea to meet with a lawyer as soon as possible in order to discuss your rights and responsibilities during the divorce process. Even if you are unable to meet with a lawyer, it is imperative that you file an Answer to the Petition. If you don't, you run the risk that a default judgment will be entered against you. A default judgment means that the Court grants the divorce, including dividing property and debt and deciding child custody and child support, without your input.

The Petition itself is a pretty basic document that simply notifies the Court that the parties are incompatible and that at least the filing party wants a divorce. It will include information about when the parties were married, whether or not they have any children, whether or not one party is entitled to spousal support or alimony and will ask the Court to divide all community and separate property and debt.

Thus, your Answer can be pretty simple too. The Answer should include a line responding to every line in the Petition that states whether or not you agree with each and every statement in the Petition. The Answer does not need to include the details of why you agree or disagree or details about what you want in terms of property or custody. The final details of the divorce will be spelled out in the Marital Settlement Agreement and the Parenting Plan, both of which are filed later on. Keep in mind that your Answer is binding and may be used against you later. As such, you need to be very careful about what you admit or deny.

On the other hand, it is far better to leave details out of the Answer. The details are addressed later through litigation, discovery, mediation, settlement and so. These details are then set forth either by the parties through the Marital Settlement Agreement or Parenting Plan if they are able to work together, or the court if they are not. Even if you have to file the Answer without an attorney, you should definitely discuss the details of the Marital Settlement Agreement and Parenting Plan with a New Mexico divorce lawyer because these documents will affect your rights long into the future.

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Unlike some other states, New Mexico does not recognize common law marriage. Thus, there is no need for a divorce action when the parties separate. However, there may still remain issues related to a division of property and debt of the parties.

This division of property and debt will not take place in the New Mexico family courts as these courts will lack jurisdiction due to the lack of a legal marriage. Instead, the issues will be addressed in civil court.

The idea behind the doctrine of common law marriage is that if a man and woman have lived together and held themselves out to be man and wife for a certain period of time (usually several years) the courts will view the parties as married and grant them the same benefits and responsibilities as couples who get married in a formal ceremony.

The issue of common law marriage often comes up when parties have cohabitated (lived together) for a long period of time and then they break up. Often, the parties have purchased property together or co-signed for loans for each other and they must determine how to divide those assets and debts. In New Mexico, the rules of family law, including the principal of community property, will not apply unless with parties were formally married. Thus, the rule that both parties have an equal interest and responsibility for all property or debts acquired during the marriage does not apply to couples that cohabitate without being married. Likewise, there can be no award of alimony or spousal support in New Mexico in co-habitation cases.

On the other hand, where children are born to the relationship, each parent is responsible for the support of the children, and child support will remain an issue even in the absence of a marriage. In addition, the parties will still need to create a parenting plan to for child custody and time-sharing of the children.

Generally, any debt or property held in a party's sole name will remain their debt or property. However, problems may arise when it comes time for the parties to divide assets or debts held in both of their names, or when an asset is held in only one party's name but the other party has paid a substantial portion of the cost of that asset. In these situations, the parties may still turn to the courts for a ruling as to who gets what asset, but that suit would need to be filed in the general civil court, not the family law court.

These situations can be very difficult, not just emotionally, but legally because different theories of law may apply to various debts and assets. Given the complications presented by this type of break-up, it is a very good idea for any party in such a situation to consult an attorney about his or her rights and responsibilities and the options for protecting those rights.

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The Servicemembers Civil Relief Act was enacted by Congress to protect members of the armed forces from having to defend against civil suits while on active duty. Given that it is a federal law, the Relief Act applies across the country, but it affects many New Mexico divorce and family cases due to the many service members stationed at Kirtland Air Force Base or Sandia National Laboratory in Albuquerque as well the other military installations across New Mexico.

The Relief Act applies to members of the Army, Navy, Air Force, Marine Corps, Coast Guard and some members of the National Guard and other government agencies. As you might imagine, the Relief Act, which can be found at 50 U.S.C. App. §§ 501-596, is lengthy and addresses a very wide scope of issues facing servicemembers. Its primary affect on divorce and family law cases comes in Sections 521 and 522, which allow the courts to stay any civil proceeding against a service member for at least 90 days and sometimes longer.

A stay means that the Court essentially puts a case on hold and takes no action for the length of the stay. This means that the Court will place a hold on divorce cases including the division of property and debt, alimony, child custody determinations and awards of child support until the stay is lifted.

For example, two parties to a divorce action live in Albuquerque with their children and the mother is an active duty with the air force and stationed at Kirtland. The parties have decided to get a divorce, but before they file any action, the mother is deployed to serve in Iraq. While mother is serving in Iraq, the father is the primary caregiver for the children, but mother is not paying any of the family bills or child support. Further, when the mother returns from Iraq, she is being transferred to another base outside of New Mexico and threatens that she is taking the children with her. What can the father do in this situation? The answer is that his options are limited by the Relief Act.

Normally, the father would file for divorce by filing a petition for dissolution of marriage to get the divorce case started and ask the court to award interim support and temporary custody. The father can still file the petition, however, it is very difficult to personally serve the mother with the divorce paperwork whiles is serving in Iraq. Further, even if the mother does get proper notice, she can request a stay and the court will not order any support or custody for at least 90 days, leaving the father without any interim financial support or child custody.

The Relief Act and its effect on a family law case can be very complicated. Whether you are a service member involved in a divorce and/or custody dispute or a civilian, it is very important that you contact an attorney as soon as possible after such a dispute begins in order to discuss your rights and limitations under the Relief Act and other relevant laws.

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A Qualified Domestic Relations Order ("QDRO") is a specialized order issued by the Court to divide retirement benefits during a divorce proceeding. As a community property state, the law in New Mexico provides that each spouse is entitled to 50% of the retirement benefits earned by the other spouse during the marriage. Retirements benefits can include, among other things, pension plans, deferred compensation accounts and 401(k) plans.

Retirement plans can often be one of the most valuable community assets owned by a divorcing couple and there are different ways to approach division of retirement benefits. As a preliminary matter, the parties must determine the value of the retirement benefit at issues. This determination can be fairly simple as in the case of 401(k) account, which contains a readily identifiable amount of money on any given day. In contrast, the value of pension plans can vary greatly depending on how much the employee spouse is making at the time of retirement and at what age the employee spouse retires. In complicated retirement cases, the parties and their attorneys should think seriously about hiring an actuary or other trained expert to determine the value of the disputed retirement benefit.

After the value of a retirement plan is determined, then the parties (or the Court) must also decide how and when the benefits will be distributed. In the case of some 401(k) plans, the parties can split the account at the time of divorce. In the case of other pension plans, neither party receives their share of the retirement plan until the employee spouse actually retires.

The QDRO should address all of the issues regarding valuation and distribution of retirement benefits. Though it would seem that the valuation and division would be a straightforward mathematical calculation, the division of retirement accounts is often hotly contested. The drafting of the QDRO can be highly contentious. In turn, the QDRO must be submitted to the court for approval and then submitted to the QDRO administrator for its approval. Each plan requires specific language and Orders are often rejected for what appear to be very trivial drafting issues.

There are some QDRO administrators that will review the Order prior to filing with the court. Others require a court approved Order prior to review. In these cases, the Order may take several trips through the drafting process, approval by the Court and final approval by the plan administrator. This process can take a very long time.

In cases where retirement benefits are hotly disputed and the parties cannot agree on drafting, it is often beneficial to have a third party attorney draft the QDRO to reduce the conflict between the parties and their attorneys. Though this will often reduce the conflict and expedite the drafting process, even this step cannot alleviate the conflict in some cases. In those cases, it is often necessary to seek the intervention of the Court. Where this becomes necessary, the parties can be assured that they are embarking on a very expensive adventure.

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A variety of complicated emotional and legal issues arise when a person dies. And those issues get even more complicated when the deceased is involved in a pending divorce action. Does one party's death end the divorce proceeding? Does the surviving spouse serve as personal representative of the deceased spouse's estate? How does the Probate Code (the body of laws governing the estate of a deceased person) interact with the statues governing Domestic Affairs? The New Mexico Court of Appeals addressed these questions in two 2009 cases.

These questions are very important in a divorce action which is after all a dissolution of marriage. A dissolution of marriage means a division of property and debt. All community property and debt must be divided according to the law. It also means that the separate property and debt must be identified and divided as such. The division of property and debt has significant consequences for the parties. The division may also raise claims by creditors against the community property by creditors including mortgage companies, credit card companies, and even the IRS. As such, the fact that divorce legally survives the death of one of the parties is no trivial matter.

In Karpien v. Karpien, a case that arose in Sandoval County, the wife died during the parties' divorce proceeding which is commenced upon filing the Petition for Dissolution of Marriage. The district court appointed the wife's parents as the personal representatives of her estate (the personal representative is the party in charge of distributing the assets and addressing the outstanding obligations of a deceased person). The husband objected to the appointment of the wife's parents and argued that the wife's death essentially ended the divorce proceeding and that he was entitled to his inheritance as the surviving spouse under the Probate Code. The Court of Appeals disagreed with the husband and ruled that, upon the death of a spouse during a divorce proceeding, the divorce proceeding continues and the personal representative is charged with representing the interests of the deceased spouse.

But what if the will of the deceased spouse appoints the surviving spouse as personal representative? Just this situation arose in a case out of Albuquerque known as Oldham v. Oldham, in which the husband died during a divorce proceeding. The husband's will appointed his wife as the personal representative of his estate, which would have meant that the wife was charged with representing the husband's interest against herself in the divorce proceeding. The Court of Appeals overturned that appointment and ruled that such a situation created an inherent conflict of interest on the part of the personal representative, who in this case was the opposing party in the divorce action. The Court of Appeals sent the case back to the district court with instructions that the district court appoint another appropriate person to serve as the personal representative so that the divorce proceeding could be concluded.

When a family member dies, it is always important to consult an attorney about the probate process. And when that death occurs during a divorce, it becomes even more important to consult an attorney to make sure that all parties involved are compliant with both the Probate Code and the Domestic Relations statutes.

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Just to make the community property versus separate property distinction even more complicated, sometimes the different types of property can be so intermingled that the property that was once separate becomes community or property that was community can become separate property (although this second example is very rare). This process of mixing property is often comingling or transmutation, which was described in a 1982 case from the Second Judicial Court in Albuquerque, called Allen v. Allen.

The most common way that property is comingled or transmuted is by gift. For instance, in the Allen case, the wife owned a piece of property prior to the marriage, which she later deeded to herself and her husband jointly. The Court ruled that the deed was evidence of the wife's intent to gift the property to the community, which changed the property from separate to community.

However, property can also be transmuted without a document specifically designating a gift, but rather through the actions of the parties. This situation commonly arises with a home owned by one spouse prior to the marriage. Under the basic rules of community property, the marital home would be the separate property of the spouse who owned the home prior to the marriage. However, what often happens is that the mortgage payments for that home are made from the parties' community funds (remember that all income earned during the marriage constitute community funds, even if the parties have separate bank accounts).

The donative intent of the spouse giving the separate property to the community is the key to evaluating whether or not the property was gifted. And without a document specifically identifying a gift, it can be very difficult to prove that intent. These cases may require hiring an outside expert to trace all of the funds applied toward the property, which can be a very expensive process. As with any divorce settlement process, the spouses arguing over possible transmuted property need to balance the value of the property in question against the potentially high cost of proving transmutation.

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With few exceptions, the New Mexico Courts treat all debts incurred during a marriage, by either or both spouses, as community debt, which means that each spouse is equally responsible for the debt.

An important part of a divorce proceeding is a determination of which spouse will pay what debt after the spouses are divorced. After the spouses agree on, or the Court decides, who will pay each community debt, the Court enters a final order adopting that agreement or determination, which becomes binding on the spouses. However, that order is not binding on creditors that may be trying to collect payment of a community debt.

This limitation to the power of a divorce order is especially true when it comes to the Internal Revenue Service because a state court order is not binding on the federal government. During a marriage, when one or both spouses fail to pay federal taxes, the IRS has the power to collect those taxes for either or both spouses. The IRS may file a federal tax lien against any community property owned by the spouses, and is entitled to file a lien against any separate property owned by the debtor spouse. The IRS may choose to levy the wages or tax returns of either spouse.

Further, in New Mexico, the IRS can levy a spouse's 50% interest in community property for debts that were incurred before the marriage. The issue of federal taxes can severely complicate the property and debt division in a divorce proceeding. Spouses that are considering divorce and have outstanding tax issues should contact an attorney in order to avoid serious penalties.

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The general rule in the state of the New Mexico is that all debt incurred during a marriage becomes community debt, which means that both spouses are equally responsible for the debt. This is true even when one spouse creates a debt without the other spouse's knowledge, although there are some narrow exceptions to that rule.

Thus, as part of a divorce proceeding, both parties are required to identify all debts incurred during the marriage. Since these debts are most often community debt, the parties then need to decide how the debt will be divided between them. Essentially, each spouse is responsible for 50% of the debt unless the debt is divided pro rata based upon income, or some other way as agreed upon by the parties. The spouses (or their attorneys) must enter into a marital settlement agreement that identifies which spouse is going to take responsibility for which debt after the divorce is completed.

The parties' agreement with respect to the division of debt is then adopted by the Court in an order dissolving the marriage and adopting the Marital Settlement Agreement as an order of the court. The Second Judicial District Court in Albuquerque typically calls this order a Final Decree, but the name given by Courts around the state may vary. Whatever the title, the Court's final order is binding on the spouses and imposes a duty on each spouse to pay the debts that each agreed to pay.

However, problems often arise after a divorce is completed when one spouse quits paying a community debt that he or she agreed to pay as part of the divorce settlement. Even though the Final Decree is binding on divorcing parties, it is NOT binding on creditors seeking to collect a debt. This means that even after a divorce, a creditor may file an action against both spouses in an attempt to collect what was once a community debt. The collection is based upon joint and several liability for the community debt.

As a result, it is not infrequent that creditors go after one spouse for the debt assigned to the other in the Marital Settlement Agreement. Creditors are often extremely aggressive and unforgiving in their collection efforts. The law is unfortunately on their side. Any debt incurred during the marriage is arguably a community debt with respect to the parties. There are some exceptions such as gambling debts.

If you are considering divorce and have community debt, you should consider consulting an attorney to ensure that your marital settlement agreement clearly assigns that debt. And if you are being contacted by creditors for a debt assigned to your former spouse, you should contact an attorney immediately to discuss the enforcement of the order against your former spouse. Though you have few defenses against the creditor, you do have rights against your former spouse including orders of contempt, attorney fees and costs.

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