Albuquerque Divorce Lawyer Blog

A divorce does not affect an individual's credit and credit score directly. However, shared or joint credit obligations often do. Joint credit obligations include bank loans, credit cards, finance and auto loans, mortgages, home equity lines of credit, and credit cards. Fortunately, there are several things that a person can do before, during, and after divorce to ensure that their credit and credit score is not negatively affected by divorce.

During marriage, many couples merge their finances, get a mortgage, open a joint bank account, buy a car together, etc. Under New Mexico law, all assets and debts accumulated during the marriage are considered to be community property. In the event of divorce, all assets and debts considered to be community property are divided equally between spouses.

However, many divorcing individuals fail to realize that a divorce decree assigns marital property and debt, but does not alter or break contracts with a lender. For example, if one partner is assigned a specific debt and subsequently cannot afford payments and the lender has not changed the contract, late payments will appear on both individuals' credit reports. In other words, regardless of the divorce decree, an individual is still responsible for joint credit obligations unless certain steps are taken.

• Close joint bank accounts. Joint bank accounts should be closed before the divorce is finalized. Since joint bank accounts are considered community property, spouses should close or cancel the account together and the funds should be divided equally.
• Close or remove one person from credit accounts. If there is no balance due on a joint credit account, the account should be closed prior to divorce. If there is a balance due on the account, it is not likely that the creditor will close the account without payment. However, certain credit companies will be willing to close a joint account and open two separate individual accounts and divide the balance due.
• Settle with creditors. Other creditors may be willing to close the account and settle for a lesser amount than what is due. In this case, individuals should obtain a letter from the creditor stating that the debt has been paid in full.
• Freeze accounts if they cannot be cancelled. If joint accounts cannot be closed, cancelled, or settled, it is important to put a freeze on the account to prevent any further charges from either party.
• Change names on utility bills. It is important for the person keeping the marital home to remove the other party's name from utility bills.
• Keep current on bills. Even though a divorce decree may assign a particular debt to one individual, if the debt is a joint one, the other party's credit score will be affected if the party responsible does not make timely minimum payments. In this case, it is often advisable to make the minimum payments even if the debt was assigned to the other spouse instead of risking damage to your credit score.
• Establish your own credit. Many spouses, for several reasons, do not have a credit card in their name. It is important to be aware that being an authorized user on another person's credit account does not build personal credit. When faced with divorce, some individuals find that they have not established sufficient credit to accomplish even the simplest tasks like obtaining a telephone line or renting a home.

These issues should all be considered early and throughout the divorce process. An experienced divorce attorney can help to avoid or at least minimize the potential negative consequences to your credit related to your divorce.

DISCLAIMER


Related Reading:



• Is Your Soon-to-be Ex Hiding Assets?


• 5 Tips From a Divorce Attorney For (Happily) Married People


• Financial Recovery After Divorce: There is a Light at the End of the Tunnel




Collins & Collins, P.C.
Albuquerque Attorneys

A 2002 study from The National Survey of Family Growth found that nearly 50% of women between the ages of 15 and 44 had cohabitated at some point in their lives. Cohabitation has become a normal way of life for many people. However, as many cohabitating couples find out--often when it is too late--by choosing cohabitation over marriage, especially in states like New Mexico, individuals give up a lot of the rights and protections afforded to married couples, including the right to spousal support or alimony.

Though New Mexico is a community property state, where all marital assets and debt are divided equally upon divorce, New Mexico does not recognize common law marriage, or cohabitation, except in the limited circumstance when the common law marriage was recognized in another state and then the parties moved together to New Mexico. This means that when an unmarried couple breaks up, property, assets, and debt acquired by one of the parties is generally considered the separate property of that party.

This can often be problematic, since, just like married couples, many cohabitating couples are in the situation where one partner is the major income earner. While for a married couple all income earned by either spouse is divided equally among the parties upon divorce, the same is not true of the couple that was cohabitating.

In order to obtain any kind of monetary relief after a break up, a formerly cohabitating individual must pursue a civil lawsuit asking that any jointly titled assets or debts be divided, much like the assets and debts of a business partnership are divided when the business closes. However, this relief does not extend as far as granting co-habitating couples rights to alimony unless, as noted above, they had a valid common law marriage in another state before moving to New Mexico.

Some states have created what is called palimony, which creates right to support in situations where there is no legally recognized marriage. Palimony suits arose from a 1976 California case, Marvin v. Marvin. Like New Mexico, California is a community property state and does not recognize common law marriage. In Marvin the California court found that when there is an enforceable oral agreement between cohabitating partners to share all property, the agreement must be enforced by a court. The difficult part is proving that there is an enforceable agreement in the first place. However, palimony has NOT been recognized by the New Mexico courts and couples breaking up in New Mexico should not expect to receive such relief.

So while the civil courts can grant some relief to couples who break up but were never married, the New Mexico courts have not chosen to grant the contract-based relief that led to palimony in other states. Thus, couples who choose not to get married should take steps to protect their assets and plan for their future in case the relationship does not last. If you have already reached the break up point, speaking to an experienced family law attorney should help identify your rights and responsibilities under the laws of New Mexico.

Collins & Collins, P.C.
Albuquerque Attorneys

According to the U.S. Census Bureau, in 2010, 45% of households in the U.S. were made up of unmarried couples. Even though the trend on a national level is for couples to live together instead of getting married, under New Mexico law the choice not to get married may have several unpleasant consequences when it comes to breaking up. Since New Mexico does not recognize common law marriage, many of the protections afforded to couples through the concept of community property are denied to those who choose not to get married.

New Mexico is a community property state, where all assets and debt acquired during the marriage are divided equally upon divorce. However, New Mexico does not recognize common law marriage. In New Mexico, to obtain the rights and responsibilities of marriage, like the right to community property and interim division of income and expenses, a couple must be formally married by a civil magistrate, judge, clergyman, or authorized representative of a federally recognized Indian tribe. This is true regardless of how long a couple has lived together or whether or not they have children.

Like divorces, when a long co-habitation relationship ends, it may take months and even years to obtain a division of property and assets. During this time, mortgages and other bills still need to be paid on time, putting some individuals in a precarious financial position. Recognizing that one spouse may have been the couple's major or sole source of income, New Mexico family courts have routinely allowed the party whose income is lower to file a Motion for Division of Interim Income and Expenses. This motion essentially divides income and expenses equally for the duration of the divorce process. However, in New Mexico, the protection afforded by this kind of a motion is only available to married couples.

The idea behind a Motion for Division of Interim Income and Expenses is that couples are still technically married until the final divorce decree, and therefore income and debts are still community property. In the case of co-habitating couples, however, there is no community property and therefore neither party is entitled to an equal division of the couple's income or debt. For this reason, there is no right to interim division for parties who were not legally married under New Mexico law and are now seeking to end the relationship and divide the assets that they have accumulated together.

Since the New Mexico Family Court lacks jurisdiction over unmarried couples for property division purposes, when co-habitating couples break up and cannot agree upon a division of assets, they must pursue a civil suit. Civil suits of this kind may take a long time to resolve. They are very difficult to prove as they are based upon principles of contract law. Worse yet, the contracts are typically oral rather than written causing many evidentiary issues related to the burdens of proof. During this time a party is not entitled to interim support or division of income or debt.

If there are children involved, a family court does have jurisdiction over child custody and child support. The courts in New Mexico will both award interim custody and time-sharing as well as interim child support while the custody and support case is pending. However, for anything unrelated to child maintenance or support, the parties are unlikely to have to divide income and expenses while their civil property division suit is pending.

These cases can be quite complicated. In addition to the standard issues of child custody and child support, the contract issues can be very challenging. As such, when faced with this situation, it is advisable to seek the guidance of an experienced divorce and family law attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

Parties to a divorce are required to identify all of their assets so that the Court can accurately characterize and divide all marital assets. Unfortunately, hiding of assets during a divorce by one or both spouses is not an uncommon practice. And, even more unfortunately, intentional hiding of assets is often difficult to discover and even more difficult to prove. However, there are ways that spouses can detect and protect themselves from partners who might be hiding assets during a divorce.

In community property states like New Mexico, all marital assets and debts are divided equally upon divorce. In some nasty cases, a spouse, usually the major earner, tries to hide a portion of their assets to avoid the legal obligation of having to divide them with their divorcing spouse. Often a spouse may suspect that their partner has hidden assets, however, the spouse who is charging their former partner with hiding assets must show proof of the act. Such proof can be in the form of bank statements, records, deeds, contracts, etc., all of which can be difficult to obtain.

Having a working knowledge of the family finances will enable one partner to detect and trace the hiding of assets. It is also important to know the location of important documents such as deeds, wills, and tax returns, not only in the event of divorce, but also should one partner die or become incapacitated.

There are some red flags that may help divorcing spouses, and even happily married people, determine that their partner may be hiding assets. Aside from being aware of the family's economic situation, there are several ways to spot asset-hiding:

• Changes in mailing addresses for financial and bank statements. Spouses must be attentive when bank and other statements that used to be mailed to your home are now being mailed to a spouse's office or post office box. If statements are no longer being delivered to your home address, you may want to contact the bank, credit card company, etc. to ensure that you obtain copies and that you keep these for your records.


• Large purchases. Beware of sudden purchases of items that could be undervalued or overlooked in a divorce, like expensive art, furniture, or collectibles.


• Underreporting income on tax returns or financial statements. When a financial analysis is performed in order to divide marital assets, unreported items may not be included.


• Overpaying IRS or creditors. Some spouses will overpay their taxes or creditors in order to get a refund after their divorce is settled.


• Sudden salary, bonus, or commission decrease. Some spouses may defer their salary, commissions, and bonuses until after the divorce to seem like they have a lower income.


• Sudden increase in debt. Many spouses create phony debt in order to seem less financially solvent.

It is important for divorcing spouses to be aware of these red flags. If contemplating divorce, many divorce attorneys recommend a lifestyle analysis be conducted at the outset of divorce negotiations. A lifestyle analysis is a financial study that determines your standard of living during marriage. It not only ensures that a spouse gets their fair share of the marital assets, it can also be a tool in discovering that the other spouse is hiding assets. If a family's standard of living exceeds reported income, it could be a sign of asset hiding.

It is extremely important that all spouses have a thorough knowledge of the marital assets, even if divorce is not on the horizon. Knowing what you have will make it easier to discover whether your partner has been hiding assets in anticipation of a divorce. If you fear that your partner is hiding income or property, it is important to obtain records and contact an experienced divorce attorney immediately.

Collins & Collins, P.C.
Albuquerque Attorneys

Divorce usually has significant impact on a person's finances .When you are happily married, it is easy to think that your relationship will last forever and that there is no need to plan for the financial fall-out from a divorce. However, according to the Economic Mobility Project (EMP) study by the Pew Charitable Trust, nearly 50% of both men and women fare worse economically after a divorce than they did when they were married.

A recent article featured in Smart Money contains advice by financial planners and attorneys on what to do during a marriage in order to avoid future headaches should the marriage end. Here are the top five suggestions for actions couples should take together, and individually, in order to protect themselves financially:

1. Don't neglect your retirement fund.

Many couples tend to overlook saving for retirement until they are older. Where one spouse is the sole or major breadwinner, the other spouse may take a backseat when planning for retirement. Often a non-working spouse will rely on the breadwinner to invest and plan for their joint retirement. However, if there is a divorce, the person who has not planned ahead may find himself or herself having to start their personal retirement fund from scratch at a later age.

Attorneys and financial planners suggest that each partner contribute as much as they can to their company's retirement plan, if employed. If unemployed, financial planners suggest that the nonworking spouse contribute to their partner's spousal IRA. Many wealth managers also recommend that couples and individuals make saving for retirement a major financial priority; Lisa Caputo, president and CEO of Women & Co., a division of Citigroup, even suggests spending a little less on a child's college fund if necessary.

2. Do not ignore your career

Another common mistake many people make after marriage is allowing professional skills to lapse. In addition to many women leaving the workforce to be stay-at-home mothers, according to the U.S. Census Bureau, there are an estimated 105,000 stay-at-home fathers. Both men and women who leave the workforce often make the mistake of completely leaving their careers behind and losing valuable expertise. When forced to go back to work, they find that they lack the skills to be competitive in the job market.

Many financial planners recommend keeping skills fresh by taking consulting jobs, volunteering for a charity, attending networking events, keeping current in the industry by signing up for newsletters and magazines, maintaining membership in business or industry organizations, participating in continuing education and keeping licenses or certifications up to date.

3. Become involved in household finance

In many couples, one person is often in charge of all of the household finances, which can be a real problem upon divorce. New Mexico is a community property state, where all marital assets and debt are split equally upon divorce. If only one partner handles all of the finances, he or she may be acquiring large amounts of debt that the other party may not know about. Additionally, as mentioned above, one partner may be relying on the other to save for their joint retirement only to find that their spouse neglected to save enough.

Steven Kaye, a certified financial planner (CFP) based in New Jersey, suggests that both partners attend meetings with attorneys, financial professionals, insurance agents, and accountants. Both spouses should get involved and be aware of the particulars of insurance policies, bank accounts, investments and debts. Moreover, Kaye recommends that all documents pertaining to the above be kept with other important documents like deeds and wills.


4. Maintain your personal credit

One of the biggest financial mistakes some individuals make when they get married is that they do not maintain a personal bank account or credit card. Many couples have only a joint bank account and a credit card in one spouse's name where the other spouse is only an authorized user. The, upon divorce, one spouse has no credit history and will have a difficult time finding a credit card at competitive interest rates and a larger line of credit. This can be especially difficult in divorce where that spouse is looking to rent or buy a home.

It is important to know that being an authorized user of s spouse's credit card does not build personal credit. Caputo advises married couples to maintain a joint bank account as well as two separate individual accounts, one for each spouse. She also recommends that spouses keep separate credit cards.

5. Obtain professional financial advice before divorce

Many people going through a divorce make the mistake of focusing on one issue; for example, getting custody of the children or retaining ownership of the family house. However, in doing this many individuals lose sight of the bigger financial picture, and end up agreeing to disadvantageous terms like low child support payments, little or no alimony, or a larger share of the marital debt.

If divorce is inevitable, Ginita Wall, certified financial planner and co-founder of Women's Institute for Financial Education, recommends that partners establish their future financial needs and ensure that their divorce agreement will meet these needs. It is often advisable to consult a financial planner to discuss these matters.

Even though divorce may not happen, it is always important to be prepared financially. Taking a few preventive measures today can mean the difference between future financial security and bankruptcy. If divorce is unavoidable, it would be prudent to discuss these issues early with an experienced divorce attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

Divorce usually has adverse effects on a person's financial situation--particularly in the short term. However, there are ways in which divorcing individuals can bounce back financially after divorce. The advice applies to all those who face financial hardship after divorce, both men and women.

Get involved in your investments, retirement planning, and insurance.

Many couples tend to split the financial decision-making. While one partner, usually the chief wage earner, focuses on investing and major financial decision-making, the other partner focuses on day-to-day budgeting and bills. After a divorce, it is usually the spouse who did not focus on the bigger picture who suffers most financially.

Establish personal credit and check your credit report for inconsistencies.

Many couples have a single joint bank account and credit card. In these situations, one spouse is usually not building up a personal credit history. Being an authorized user of a spouse's credit card does not build personal credit. Upon divorce, the spouse with no credit history will find it difficult to secure credit in their name.

Another common problem faced after divorce has to do with debt and their credit report. Since New Mexico is a community property state, debt, like assets, is divided equally during a divorce. It is important for individuals to check their credit report to ensure that their debt has been divided and allocated correctly by creditors, in accordance with the divorce settlement. It is extremely important to check for and rectify these mistakes as soon as possible.

Determine a budget.

Budgeting becomes of vital importance after a divorce. Both partners have to be realistic and consider multiple issues when organizing a budget. First of all, both partners have to have reasonable expectations. In most cases, the cost of maintaining two separate homes will prohibit both partners from maintaining their former standard of living.

In planning a budget, divorcing individuals should make a detailed inventory of their income, including income from work, alimony, investments, and child support. However, it is important to account for child support, and possibly alimony, ending at a certain point in the future. There should also be a detailed list of annual expenses, including rent, mortgages, insurance, car payments, taxes, utility bills, food costs, etc. If thinking about returning to school or pursuing some sort of career enrichment, it is necessary that individuals also factor this transition period into their budget. This includes accounting for an income reduction while in school and an income increase when the training is completed.

Children are an important consideration when making realistic budgeting choices. In some cases, the custodial parent wishes to keep the family home. However, this may not make financial sense. It is usually the primary caregiver who fights to keep the children as well as the family home. It is important not to make the decision to own the family home an emotional one, because it may be financially unrealistic.

Save for retirement.

Many individuals find themselves having to begin saving and planning for retirement from scratch after divorce. For various reasons during marriage, one or both partners may neglect to plan or save for retirement. But no matter how late or how difficult, retirement planning must be addressed as soon as possible. It may be best to start investing or saving even a small amount every month which can accumulate with time or, if possible, to take a lump sum received as part of the divorce settlement to begin a retirement fund.

Separate completely.

Finally, many divorced couples neglect to separate their financial lives completely. As soon as the divorce is final, each spouse should ensure that assets are transferred to their name, as well as home and auto insurance policies. Individuals should also make sure that if they receive child and spousal support, then the paying partner has life insurance that will allow for a continuance of the support if they should die unexpectedly. It is also important to change beneficiary designations and to update wills and healthcare directives after divorce.

Even though divorce can be financially crippling, there are ways to get your financial life back on track. It is important, however, to get involved in your finances, be realistic, and make important changes that look toward the future. And if divorce is on the horizon, consult with an experienced divorce attorney early on to protect your financial interests.

Collins & Collins, P.C.
Albuquerque Attorneys

These days more couples are delaying marriage and many opt for living together unmarried. As more and more couples decide not to marry, but buy property and have children together, the process of breaking up has moved into the courtroom. New Mexico does not recognize common law marriage, although couples with a valid common law marriage from another state may be eligible to divorce here if they meet jurisdictional requirements. However, more and more couples are finding themselves dealing with a break-up in court than ever before.

In some states, couples who cohabitate for an extended period of time and "hold themselves out to be married," are granted all the legal protections and responsibilities of marriage through a common law marriage. New Mexico, however, does not recognize common law marriage. In New Mexico, to obtain the rights and responsibilities of marriage, like the right to community property, a couple must be formally married by a civil magistrate, judge, clergyman, or authorized representative of a federally recognized Indian tribe. This is true regardless of how long a couple has lived together or whether or not they have children.

Couples who were married under common law in another state and later moved to New Mexico may be the only exception. A common law marriage recognized in another state will generally be recognized in New Mexico for purposes of divorce, child custody and child support. Although these couples will first have to prove that they were indeed married under the laws of their previous home state.

However, many legal issues may still apply to break-ups between unmarried couples.

The trend in New Mexico, as in the rest of the U.S., is that couples are marrying later or not getting married at all. According to the U.S. Census Bureau, 45% of households in the U.S. in 2010 were unmarried. These couples often cohabitate for many years, acquire property and debt, and have children. What these couples may not realize is that not being married in New Mexico may complicate a break-up rather than make it easier.

While a family court will usually dispense with property, debt, and child custody and support matters in a single divorce decree, unmarried couples will have a longer, more complex road ahead of them. Common law couples cannot appear in family court for property division purposes because family court lacks jurisdiction over them. Division of property issues in these cases will be handled in civil court.

Even though New Mexico is a community property state, where both assets and debt are generally divided equally among spouses, there will be no community property claim unless there is a formal marriage. If property was acquired in a single name, the other party will have a hard time claiming ownership. The same rule applies to debt. If one party acquired debt in the form of a mortgage, car loan, or credit card, the other party will generally not be responsible for the debt absent a recognized marriage. If a couple is unmarried under New Mexico law, there will be no right to alimony or spousal support.

Issues pertaining to child custody in New Mexico are handled in much the same way regardless of whether the parents are married. However, there may be procedural differences that can be explained by an attorney.

In response to the trend of unmarried break-up disputes, several divorce attorneys have begun to advocate cohabitation agreements. Cohabitation agreements are legally binding contracts where couples can determine the issues pertaining to their property, debt, and parental rights and arrangements in advance. Cohabitation agreements can help avoid costly litigation should the cohabitation end.

Even though these agreements may not be the first thing to think about when a couple first moves in with each other, it may be wise to consider once the topic of joint property and children come up. And in moving forward, it may be a good idea as cynical as it may sound to seek the guidance of an experienced family law attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

The idea of an uncontested divorce is commonly misunderstood. The idea of an uncontested divorce is obviously appealing but not always practical or achievable. A distinction must be drawn between contested and high conflict. There is a very significant difference between the two.

Divorce is generally difficult; even an amicable divorce can become complicated. Since divorce is often a costly transition, many couples seek to cut expenses by pursuing an uncontested divorce. However, an uncontested divorce implies total agreement on a wide range of issues that may not be obvious at the outset. While an uncontested divorce may be the right choice to dissolve a short marriage with no children and few assets, it is not generally a good choice for longer marriages, especially if there are children, property, assets and debt involved.

To obtain an uncontested divorce in New Mexico, at least one of the spouses must have lived in the state for the previous six months. The parties then must prepare, agree upon and sign a Marital Settlement Agreement (MSA), which a judge accepts. After acceptance, the duties and rights in the MSA become legally binding on both parties. For a flat fee, some divorce attorneys will prepare and file all of the necessary documents for an uncontested divorce.

However, it is seldom the case that parties have reached perfect agreement on every issue that may be pertinent to their divorce. There are several issues concerning property division, child support, child custody, tax, and debt that couples may overlook when agreeing to an uncontested divorce. In trying to obtain a fast resolution, many couples often avoid important conversations and decisions, only to be forced to revisit these sometimes difficult and then more pressing issues in the future, resulting in far greater cost.

One of the most important issues couples must agree on is the division of property and debt. New Mexico is a community property state, where both marital assets and debt are divided equally upon divorce. In some cases, parties do not have a clear financial picture of their community property and may be agreeing to an arrangement that is not to their advantage. Many spouses may try to hide their assets to avoid giving their soon-to-be ex a fair share of the marital estate. A major issue is that in an uncontested divorce is that there is seldom discovery or disclosure of assets. If one spouse is indeed hiding certain assets, then clearly there is no real agreement on the division. And though a party can return to court to address the concealment of assets, it is a difficult and expensive process.

Child support is also a very complex issue in a divorce. If filing for an uncontested divorce in New Mexico, the couple must also submit a Parenting Plan with a child support worksheet. The Parenting Plan includes each parent's obligation for each child, which must comply with the New Mexico child support guidelines. Couples considering an uncontested divorce should also come to an agreement on custody, the possibility of one parent moving to another state, medical costs and insurance premiums, and educational costs. These can quickly cause an escalation of conflict when they have not been properly addressed.

Debt is an issue all its own and unfortunately, the debt often far exceeds any assets the couple may have.. In community property states like New Mexico, both spouses are equally responsible for debt acquired during the marriage, regardless of which spouse actually incurred the debt. As noted above, since there is usually no discovery or mandatory disclosure of finances in an uncontested divorce, it is important for both spouses to know the size of their debts both collectively and individually.

While uncontested divorce may seem attractive and less costly, it is often not the right choice. Some may wish to just get it over with which is certainly understandable in light of the stress of divorce. However, rushing through the process often leads to far more stress and costs in the future. Contested does not mean conflict. It may simply mean thoughtful and careful. Once it is done, it is very difficult to undo. Consulting an experienced divorce attorney before the process begins, even for an uncontested divorce, may cause avoid complications and costs in the long run.

Collins & Collins, P.C.
Albuquerque Attorneys

The Pew Charitable Trust recently published the results of its Economic Mobility Project (EMP) study. The study's findings of women's economic situation after divorce were interesting and encouraging. According to Pew, women today are more likely to come out of a divorce as financial winners than they were in the past.

The study was based on non-partisan data and was intended to spawn a discussion about individuals' ability to move up or down the economic ladder, as well as how government and private organizations can offer better economic opportunities to encourage upward mobility. Part of the study focused on the impact of divorce based on gender.

The EMP results show that 20% of divorced women's income will increase by 25% or higher after divorce, which is almost double the increase of only 11% in the early/mid 1970s. In contrast, only 16% of divorced men's income will increase by 25% or higher after divorce. This figure is also up from 14% in the early/mid 1970s. On the other hand, around 50% of both women and men are financially worse off after a divorce.

Commentators assert that these figures reflect a broad change in women's financial position and strength, for which there are several factors. One important reason is that the wage gap between men and women is closing. Women are also getting better education than women in the 1970s, which is leading to better, higher-paying jobs. Another factor is that women are more informed than ever of their marital assets. In the past, many women were unaware of their marital income, debt, and property. In contrast, women today have become more involved in family finances, thereby strengthening their position during divorce.

Family law attorneys have also reportedly seen a large percentage of women seeking prenuptial agreements. This was rarely the case 30 years ago. Today, women are getting a better education, better jobs, are waiting longer to get married and, thus, are accumulating more personal assets prior to marriage. Taking their cue from men, these women have sought better ways to protect their own wealth, with many turning to the prenuptial agreement.

The study also raises the question of what married couples can do to ensure that they do not suffer as much economic damage in the event of a divorce. Even though planning for a divorce while happily married may not be fun or seem necessary, it may end up meaning the difference between financial success and economic crisis in the future.

• Know the law in your state. New Mexico is a community property state. In New Mexico, any income, property, or debt accumulated during the marriage is generally divided equally among the spouses upon divorce.
• Be aware of marital income and property. Even though in many situations one spouse is often the sole or majority income-producer, it is important for both spouses to know the value and nature of family income and investments.
• Keep an eye on debt. Marital debt is an important topic in New Mexico. In New Mexico community debt is usually divided equally upon divorce. This may be true even if only one spouse acquired the debt, only one spouse has an income, or the other spouse was unaware of the debt. Therefore, in community property states like New Mexico, it is even more important for both spouses to be aware of all debts accumulated during the marriage.
• Establish credit. Many spouses, for several reasons, do not have a credit card in their name. When faced with divorce, some individuals find that they have not established sufficient credit to accomplish even the simplest tasks like obtaining a telephone line or renting a home. Even though divorce may not seem like a possibility, it is important for both spouses to have a personal credit card and to establish a credit history.

Although studies like EMP show that women are doing far better after divorce than they were 30 years ago, it is important to realize that women are faring better because they have taken steps to protect themselves and their assets in the event of divorce. Nobody goes into marriage thinking that they will ultimately separate. However, a little common sense planning now can go a long way in the future. And if divorce is unavoidable, women and men alike would do well to seek the advice of an experienced divorce attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

In a New Mexico divorce, the parties must divide property and debt. One very important area of asset division is the division of retirement accounts. A Qualified Domestic Relations Order (QDRO) is a special form of court order that is issued during a divorce proceeding for the purpose of dividing retirement benefits.

Under New Mexico's community property laws, each spouse is entitled to 50% of the retirement benefits earned by the other spouse during the marriage. There are a variety of retirement plans that must be divided. The QDRO deals with several of these including pension plans and 401(k) plans. There are some that are not addressed by a QDRO. It is important to identify and classify all plans and account for them in the legally appropriate manner.

To start, the parties must identify each and every retirement plan that accrued during the marriage. The parties need to then determine the value of the retirement benefits at issue. Under the community property laws of New Mexico, only that portion of the retirement plan, or any other asset for that matter, that accrued during the marriage is considered community property and divisible as such.

Although one would think that the valuation and division of retirement accounts would be a rather clear-cut calculation, the division is often fiercely contested. Often experts such as CPA's and actuaries are required to assist in the valuation. On occasion, the valuation question will become a battle of the experts.

On the one hand, making an initial determination of values of 401(k) accounts can be pretty straightforward because they contain a clearly-identified amount of money. On the other hand, the value of pension plans can vary to a great degree depending on among other things how old the spouse is at the time of retirement and how much money the spouse is making when he or she retires. Other accounts such as defined benefit plans raise their own challenges.

After the value of a retirement plan has been calculated, the parties (or the court) must also figure out how and when the benefits will be dispersed. When it comes to certain 401(k) plans, the parties may be able to simply split the account at the time of divorce. In the case of other pension plans, however, neither party can receive their share of the plan until the working spouse actually retires

As with all family law matters, the division of retirement accounts can be accomplished through cooperation and compromise. Or it can be done through long, expensive and high conflict litigation. Though there will often be honest differences of opinion, these differences can generally be worked out through compromise. Either way, it generally helpful to have the counsel of an experienced divorce attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

A divorce or legal separation will always be difficult emotionally, however, it can be just as hard, if not worse, financially. Often it is not until the parties begin exchanging income information as part of their divorce action that they realize just how dire their financial situation is. Given that New Mexico is a community property state, each spouse is equally responsible for the debts incurred during a marriage. If those debts are substantial, the divorcing parties may want to consider filing bankruptcy.

Anyone considering bankruptcy should consult an attorney that specializes in bankruptcy to determine whether or not it is in their best interests, or if they even qualify to file. This is especially true when parties are divorcing because the parties need to decide whether or not they want to file a joint bankruptcy before the divorce or pursue other options. For example, the bankruptcy code prohibits individuals with incomes above a certain, state-specific threshold from filing bankruptcy and it limits what assets are exempt, or can be kept by the parties after filing. The intersection between federal bankruptcy laws and New Mexico's family law statutes and cases can be tricky to navigate, so parties should be cautious when going down that road.

If parties decide not to file a joint bankruptcy and proceed with their divorce, it is essential that the divorce settlement documents include language that addresses what will happen if one or both spouses decide to file bankruptcy after the divorce.

Spousal support, or alimony, and child support obligations are not dischargeable in bankruptcy, which means that the spouse who owes that money cannot get out of paying it by filing bankruptcy.

However, obligations to pay debts may be dischargeable depending on whether the spouse files a Chapter 7 or Chapter 13 bankruptcy. This becomes problematic if one spouse agrees to assume a community debt as part of a divorce, but then later discharges that debt. If that debt is community, or in both parties' names, then a lender may seek to collect the debt from the other spouse. Therefore, divorce settlement documents should include language that clearly identifies the parties' intentions when dividing debt. For example, if one party is taking a debt instead of paying spousal or child support, then language should clarify that the debt is in the nature of support to prevent dischargeability.

Of course, no one can predict what exactly will happen after a divorce. Sometimes a spouse has every intention of paying the debts they assume in the divorce, but then they lose a job or suffer some other setback that prevents them from doing so. The best the parties can do is consult with experienced family law and bankruptcy counsel in order to make educated decisions about property and debt division and to properly memorialize those decisions in the final divorce documents.

Collins & Collins, P.C.
Albuquerque Attorneys

Appearing in Court for any reason, whether as a party to a case or as a witness or both, can be a great source of anxiety for anyone. That anxiety is often magnified in a family law case because emotions tend to run high when parties are in a divorce or child custody dispute.

One way to help ease the stress of going to Court is to be as prepared as possible for every Court appearance. In New Mexico, family law matters are heard by a District Court judge in the area in which the case is filed, which is called the Judicial District. For instance, cases filed in Albuquerque are heard by the Second Judicial District Court and cases in Rio Rancho are heard by the Thirteenth Judicial District Court.

Once you get in front of the Court, the primary issue at a hearing will most often be how the New Mexico law regarding division of assets and debts, custody, timesharing and child support applies to the facts of the case. Thus, it is essential that the parties and their attorneys be prepared with knowledge of the facts, and evidence to support those facts, as well as knowledge of the applicable law, including print outs of statutes and case law.

Another important part of being prepared for a hearing, beyond knowing the law and facts, is an understanding of what issues are set for that hearing and how much time is allotted. Not every hearing in a family law matter will address all of the outstanding issues between the parties, especially if the matter is highly contentious.

Often a hearing will be set to address a single issue or set of issues, i.e. child support or the interim division of income and expense. This is true during a divorce proceeding, where there may be several shorter hearings before the court holds the final trial or evidentiary hearing at which it resolves all outstanding issues related to the parties' marriage.

In turn, the court has ongoing jurisdiction over support and custody for children until they turn 18, therefore, there can be hearings in those cases every time there is a material and substantial change in circumstances.

Also, Judges will not allow the presentation of evidence at every hearing; some hearings are just set in order to give the Court an idea of the pending issues so it can determine how to proceed. For instance, if the parties are set for a ten minute pre-trial conference at which the Court typically sets dates for trial and other deadlines, the parties should not show up expecting to present evidence of income and expect child support to be ordered.

Having an understanding of what will be addressed at a specific hearing not only helps parties and their attorneys be prepared but it also helps parties' manage their expectations of the relief they can expect to be granted by the Court at each appearance.

Of course, no attorney, or anyone else, can fully predict the outcome of a hearing, or how a Judge will rule on a specific issue. However, an experienced family law attorney should be able to help parties prepare for hearings by explaining what items are on the agenda or docket, understanding the applicable law and knowing the underlying facts.

Such preparation may not completely eliminate the anxiety caused by a court appearance, but is should help calm the parties down and has the added benefit of greatly increasing the party's chances of success.

Collins & Collins, P.C.
Albuquerque Attorneys

Going through a divorce can be an incredibly difficult experience. Not only are parties mourning the end of a relationship, they are typically dealing with feelings of anger and resentment toward the other person and each blaming the other for what went wrong. Add in the financial strain that comes from dividing debts and assets, along with trying to work out custody and timesharing arrangements, and it is clear why studies typically rank the stress level of a divorce just below the stress involved with losing a loved one. Given the difficulty associated with a divorce, it is often hard for parties to ever see the light at the end of the tunnel.

However, sooner or later (hopefully sooner, but that depends on how reasonable the parties are willing to be in dealing with each other) the divorce will be done. And, once that divorce is complete, each of the parties has a chance at a new beginning in life. This obviously includes the chance to pursue new romantic relationships, but can mean much more than that. In the case of a divorce with children, if the parties can manage to stay civil and work together to make the split as easy as possible on the children then the divorce can actually be good for the children. Living in a home where parents are constantly fighting or that is filled with tension can cause a host of emotional problems for children. Removing that tension by splitting up can often be a relief for children and parents alike and can enable each parent to develop a positive relationship with their children away from the negative relationship with the other parent. In turn, once the stress of living and trying to raise a family together is removed by the divorce, sometimes the parties themselves are able to remember why they became a couple in the first place and actually become friends. Or, if not friends, hopefully that can remain civil toward each other when they attend their children's school events.

After the initial financial shock caused when a community is divided, there can be a sense of freedom that comes with no longer having to make joint financial decisions. Or, sometimes more importantly, no longer being jointly responsible for another person's poor financial choices. For a party who gave up career opportunities to stay home with children, transitional or rehabilitative spousal support can provide the financial means to go back to school or get the specialized training for the job they always wanted. On the other hand, for a party who was the sole breadwinner for the family, the divorce may release the stress that comes with having to always work hard enough to provide for everyone else.

Of course, divorce is hard and can have long-term effects on everyone involved. But, trying to keep a positive outlook and cooperative attitude during the divorce process can not only increase a party's emotional well-being, but it can actually make the process itself go more smoothly. An experienced family law attorney should be able to help their client make smart legal decisions in their divorce and help them keep a positive outlook.

Collins & Collins, P.C.
Albuquerque Attorneys

Almost any time a relationship ends there is some level of conflict, even when the decision is mutual. Sometimes people can break up and go their separate ways fairly simply, however, when the break up necessitates a divorce and/or child custody action things can get complicated. The fact that New Mexico is a no fault divorce state helps to reduce conflict to some extent. But conflict can still arise with the parties themselves having the most control over the level of conflict in a divorce or custody action.

Many parties, especially parties that are particularly angry at their former partner, may insist that they don't care whether or not the conflict level in a case is high, instead they just want to "win" or hurt the other person. However, given that New Mexico's community property laws favor equitable division of assets and debts and that the New Mexico laws favor joint custody, there really aren't winners and losers in family law.

Therefore, increasing conflict or refusing to be reasonable is unlikely to result in the unreasonable party receiving more property or increased custody. What increasing conflict will do is substantially increase the cost of a divorce or custody case. Most family law attorneys charge by the hour for their services. Thus, the more time an attorney has to spend drafting pleadings, communicating with opposing counsel and attending hearings, the more expensive their bill will be. Further, the more hearings, depositions and meetings the parties have to attend, the more time and money is lost when they have to miss work and arrange for child care. Additionally, there can be a serious emotional cost to a high-conflict divorce or custody dispute that is hard to quantify and that emotional cost can often extend beyond the parties to their children and other family members.

Of course, it is a rare case when parties who are separating, or may have been separated for several months or years, can agree on everything. (If they got along that well, they would probably not be breaking up in the first place). What parties can do is sit down with their attorney, or another impartial party, and think about the issues in their divorce or custody battle that really matter the most to them. For example, is a party really that attached to the marital residence, or would they be willing to move out in exchange for a 401(k) distribution that they could use to buy a new house? Does a party really think it in their children's best interest to only see the other parent every other weekend, or are they just trying to hurt the other parent?

Only the parties themselves can answer these questions and reducing conflict may not always be possible, especially if one side simply refuses to compromise. However, any reduction, even if it is only an agreement on a few issues, will help limit both the financial and emotional toll on the parties, and allow them to move on. Hiring an experienced family law attorney can help parties determine which issues are worth holding on to and where compromise may be in their best interest.

Collins & Collins, P.C.
Albuquerque Attorneys

New Mexico does not recognize common law marriage, even if you and your partner have lived together for years and for all intents and purposes act as a married couple in New Mexico.

However, approximately sixteen states still recognize common law marriage for couples who have lived together for a significant period of time and hold themselves out to the world as a married couple. Some states are phasing out common law marriage and have enacted rules that only recognize such marriages if they occurred before a specific date.

If you moved to New Mexico from a state that recognizes common law marriage, and you are deemed to have been married under the laws of that state, New Mexico courts may recognize your marriage as a valid one. This happens because under our federal Constitution, each state gives full faith and credit to the laws of their sister states.

However, you would have to prove that you were legally married in the other state before you could have this recognition in New Mexico. This could be an expensive and difficult exercise in the court system. On the other hand, there are many considerations, particularly financial issues, that dictate this path. You should discuss the pros and cons of this kind of case with an experienced family law attorney and probably your accountant before you go down that road.

There are numerous financial issues that should be considered. One reason to consider pursuing this kind of case would be at the end of the relationship if you need and would qualify for spousal support. Spousal support is only available to couples who have been married. Another scenario where it makes sense is when one partner dies without a will and the other would be disinherited unless they were deemed to be a legal spouse. Likewise, there may be estate tax considerations upon the death of a partner. Finally, in case of a legal marriage, the division of property and debt will be governed in most cases by community property principles.

In short, common law marriage is generally not recognized. However, under full faith and credit provisions of the U.S. Constitution, it must be recognized under certain circumstances. The burden is on the couple or party seeking recognition of the marriage and this can be a difficult task.

Collins & Collins, P.C.
Albuquerque Attorneys