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

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

It is common knowledge that divorce wreaks havoc on emotions and bank accounts. New research shows that divorce also has a marked, long- lasting impact on health.

According to a study published in the Journal of Health and Social Behavior, "Marital Biography and Health Midlife," widowed and divorced individuals suffer from 20% more chronic illnesses, like cancer, heart disease, and diabetes than those who have not experienced divorce or the loss of a partner. Divorced and widowed individuals were also 23% more likely to have mobility issues, like trouble walking or difficulty climbing stairs, than married individuals.

The study also showed that the physical effects of divorce may linger over time and may be present even if the person remarries. According to the findings, widowed and divorced individuals who later remarried were still 12% more likely to suffer from chronic illnesses and 19 % more likely to have mobility issues than married people who had not been married or widowed before.

Another study conducted by researchers at Iowa State University's Institute for Social and Behavioral Research found that while women showed no decline to their physical health immediately after divorce, a decade later divorced women were 37% more likely to develop physical illnesses than married women. Iowa State researchers attribute this higher incidence in physical illness to the lingering emotional effects of divorce.

Research shows that there are several reasons for declining health after divorce. The Iowa State study cites social isolation and poor job opportunities as a possible cause for women reporting illness a decade after their divorce. Other studies suggest that, apart from the emotional toll of the actual break-up, individuals face a series of new emotional challenges after divorce. Yet other studies suggest that after divorce, many individuals stop taking care of themselves, eating right, and exercising regularly.

Many of the emotional stressors divorced individuals have to cope with have to do with children. These include the stress and time constraints of being a single parent, the feelings of guilt at not being able to devote time to a child in their formative years, and the worry of what effect the divorce will have on the child. Other emotional problems that can arise from divorce have to do with creating a new social life, making new friends, and dating again. Many recent divorced individuals feel overwhelmed and do not carry on a healthy social life. All of these emotional problems could lead to health problems in the future.

The increased work-load, both at home and professionally, and the decrease in income, may also lead individuals to stop taking proper care of themselves after divorce. Because they are either over worked, depressed, or insolvent, many individuals stop eating a balanced meal or exercising regularly. When a person suddenly becomes a single parent with twice the responsibilities, there is often little time to go to the gym or cook a healthy meal every day. This all takes a toll on health in the long run.

Although research is on-going, it is clear that the emotional and physical changes that come with divorce often work together over time to erode an individual's overall physical health. Anyone faced with a divorce or significant break up should be aware of these risks and be prepared to prioritize their health and well-being.

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

For many facing economic hardship, bankruptcy may seem like an attractive option. Filing for bankruptcy often results in the elimination, or discharge, of a large variety of debts and often represents a second chance for those mired in overdue bills. However, some debts, including alimony and child support, are not discharged in bankruptcy.

Some people find themselves faced with the possibility of bankruptcy as a result of tough decisions and money management choices. Others find themselves in insurmountable debt due to forces beyond their control, like a serious illness, unexpected accident, job loss, or some other crisis. Bankruptcy laws and procedures try to balance the need of debtors for a new beginning with the interests of creditors in recovering their money.

Divorce can often lead to bankruptcy as a person finds him or herself unable to pay their debts or support two households on a single salary. Other spouses may try to avoid alimony and child support obligations by filing for bankruptcy. However, for important policy reasons, filing for bankruptcy will not discharge most domestic support obligations, including alimony.

There are two main types of bankruptcy relevant to this discussion, Chapter 7 and Chapter 13. Under Chapter 7 bankruptcy, debts are discharged; under Chapter 13, debts are only discharged after the debtor has paid a portion of what is owed. When a court orders a discharge, the debt is eliminated and creditors have no legal right to collect against the former debtor. However, neither Chapter 7 nor 13 discharge all debts.

The Federal Bankruptcy Code 11 USC § 523 exempts the discharge of "domestic support obligations" as well as debts owed to a former spouse or child acquired as the result of a court-ordered separation agreement or divorce decree. Moreover, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), effective October 2005, gives domestic support obligations priority over other creditors, including tax debts. Domestic support obligations under BAPCPA include property distribution, alimony, child support, and other court-ordered debt incurred as a result of a divorce and separation. Domestic support obligations are automatically exempted from discharge in bankruptcy.

There are a few requirements for discharge to be exempted from bankruptcy proceedings: (1) the obligation had to have arisen out of a separation agreement, divorce decree or other order by a court, (2) the obligation must be in the nature of support, maintenance or alimony, and (3) if the obligation is to a third party, it must have the effect of supporting the former spouse. This includes paying a mortgage, child education, child medical expenses, and life insurance premiums where the child is a beneficiary.

There are a few differences in the possibility to discharge domestic support obligations between Chapter 7 "liquidation" and Chapter 13 "reorganization" bankruptcy. Under Chapter 7, virtually all obligations assigned under a separation agreement or divorce decree are not dischargeable. This is true whether the obligations take the form of support, property division, or other agreements. Under Chapter 13, a former spouse may not discharge past due support obligations and must pay these obligations in full during the duration of the Chapter 13 plan. The only obligations that may be discharged under Chapter 13 are those deemed not to be in the nature of support. Since most alimony and child support obligations are generally indeed in the nature of support, it is difficult to discharge any of these debts under Chapter 13.

Even though bankruptcy may make financial sense for other reasons, it is very difficult to use bankruptcy to discharge alimony and child support obligations. If a former or soon-to-be former spouse is planning on filing for bankruptcy, it is important to contact an experienced family attorney who will be able to guide you through the process of obtaining relief from a bankruptcy court.

Collins & Collins, P.C.
Albuquerque Attorneys

Today it seems like many people live their lives on their smart phones and through social networks. Many could not imagine a day without texting on their cell phone or updating their status on Facebook. However, for an individual facing divorce or child custody dispute, when not managed properly a digital trail can be a serious liability.

What many do not realize is that activity on Facebook, Twitter, and MySpace can often be used as evidence in many family law proceedings, including a divorce or child custody proceeding. Increasingly, people have found their posts, status updates, pictures, and comments used to contradict their statements in court and as evidence of poor judgment, drug and alcohol use, and spending habits. A survey by the American Academy of Matrimonial Lawyers (AAML) found that 81% of attorneys saw an increase in cases last year using evidence obtained from social networks, with Facebook being the most widely cited.

Beyond social network activity, phone messages can be used in similar ways. Texting and other activity on smart phones leaves a digital trail that can be used in a custody, child support and divorce proceeding. For people who constantly communicate via text, their text messages can provide a written record of what they were doing, thinking, and planning at any given moment. Another survey by AAML found that 92% of attorneys saw a rise in the use of evidence taken from a smart phones and 94% saw a rise in the use of text messages as evidence.

Spying and snooping can also pose a significant risk. For a divorcing spouse, nothing can be more tempting than taking a peek at their ex's email account or web history. However, even if it is a shared computer, snooping can have very serious consequences. In New Mexico, privacy laws prevent an individual from reading, copying, or intercepting communications by telegraph or telephone meant for another without the consent of the sender. 3-12-1(C) NMSA 1978. Like many states, the New Mexico law does not specifically cover email, but there are signs that the law is likely to catch up soon. Even though the issue is still being debated, a man in Michigan is currently facing felony charges for accessing his wife's Gmail account during a divorce.

Joining a dating site while in the process of obtaining a divorce may also be counterproductive. Most divorce attorneys discourage dating in general before a divorce is finalized. Apart from the added stress that bringing another person into the relationship entails, dating before a divorce is final could have detrimental effect on an individual's case, affecting issues of property division, spousal support, child custody, and child visitation.

Even though retail therapy may seem like a harmless way to relax in a stressful period, many divorce attorneys also advise against it. Sometimes spouses go on shopping binges with marital assets to get revenge on their exes. This tactic, however, often backfires, increases debt, and adds stress to an already stressful situation. A spouse's overspending can sometimes be used by the opposing spouse as evidence of mismanagement of marital funds and can be harmful in disputes over support and child custody.

Divorces and custody disputes can create an extremely contentious situation, where private matters are brought forward and scrutinized. It is more important than ever to realize that in a connected age, people leave an increasingly detailed digital trail which may end up in front of a judge.

These are all issues that you should be discussed with an experienced divorce and family law attorney early on in a divorce or custody proceeding. It is far easier for your attorney to address these issues in a proactive manner than to learn about them from the other side at what will likely be very inopportune times.

Collins & Collins, P.C.
Albuquerque Attorneys

It is no secret that divorce is a difficult time, and it is widely known that child custody battles can be life-altering experiences--not always in a good way. More and more, courts have intruded into otherwise personal and family affairs in order to make child custody decisions. For example, a recent Washington Times article discussed the growing trend of family law courts considering smoking a factor in child custody cases.

The investigation cites a survey by the group Action on Smoking and Health, dealing with custody issues and tobacco use. The survey found no court has ruled that a parent's use of tobacco should not be taken into account when deciding child custody. It also found that courts in 18 states have already ruled that tobacco use of a parent or family member should be considered as a factor in child custody cases. Other courts have prohibited smoking in a child's presence or even 24 to 48 hours before the child arrives. Courts have also modified custody arrangements because a parent exposes the child to tobacco smoke. They have taken into account not only parental smoking but smoking among other family members and friends that may expose the child to secondhand smoke.

The Times article also discusses how many who oppose this trend warn that considering a parent's smoking habits will pave the way for further court intrusion into private matters. Some fear that if the court is regulating a parent's smoking habits by citing the dangers to the child's health, it may go on to regulate other private matters such as what a parent feeds their child and other private parenting decisions. Other critics question whether the courts should be allowed to limit a person's freedom of choice in order to see their children.

When determining child custody, a court looks at "the best interests of the child." This standard includes the child's medical health and well being. The risks of tobacco use and secondhand smoke, especially to a child's health, are widely documented. In the wake of strong anti-smoking campaigns, it is only natural that courts are now considering a child's exposure to secondhand smoke as part of its "best interests" considerations. This is especially true if the child already has respiratory problems, but has been held to be relevant in a wide range of cases, even when the child shows no sign of reaction to exposure.

It is already evident that parents have begun to change their habits in response to this trend. Many parents have quit smoking when faced with a possible child custody dispute. It is not clear that quitting may help, however, since the opposing parent may argue that the other will just resume smoking after the child custody matter is settled. If a parent is unable to quit, he or she may be well served by only smoking outdoors and never around their children or in a vehicle. Parents may also help their custody case by not allowing others to smoke around their children.

In any event, this trend reflects courts' increasing control over the personal decisions of parents in child custody disputes. Today's parents are beginning to realize that they must give up control of many previously private matters when they become involved in a dispute over child custody. These are the kinds of issues that should be addressed with an experienced divorce attorney so that you know what to expect in a divorce and a contested child custody case.

Collins & Collins, P.C.
Albuquerque Attorneys

When a person retires and begins drawing social security, their spouse is entitled to social security benefits based on a proportion of the benefits received by the retiring person. A consideration in any divorce is whether or not the spouse will still be entitled to those benefits after the marriage is dissolved. And the short answer to that question is: maybe. As a preliminary matter, remember that social security is a federal program, so the rules should be substantially the same whether parties are divorcing in New Mexico or elsewhere.

The initial threshold for whether or not a divorced spouse may receive social security benefits based in their former spouse's benefits is the length of the marriage. The parties must have been married for at least ten (10) years in order for the divorced spouse to be entitled to benefits based on the former spouse's social security record. If the ten (10) year requirement is met, then the divorced spouse may receive the benefit only if they are at least sixty two (62) years old and have not remarried.

Additionally, the divorced spouse is only entitled to benefits based on the former spouse's social security if the divorced spouse is not entitled to a higher social security benefit based on his or her own work history. Further, the former spouse must be eligible to receive the social security benefits before the divorced spouse can begin receiving a spousal benefit. For example, if the parties were married for twelve (12) years and divorced when they were in their fifties, then the divorcing spouse would have to wait until she or she was sixty two (62), and the former spouse was old enough to draw their benefits, before the divorced spouse could receive their benefit.

There are, of course, exceptions to this general rule. A divorced spouse may still be entitled to their benefits based on the former spouse's benefits even if the divorced spouse remarries in situations when the second spouse dies or the second marriage ends by divorce or annulment. Also, if the divorcing spouse's second marriage is to someone already receiving certain types of social security benefits or survivor's benefits, then the divorced spouse may still be entitled to benefits based on the former spouse's benefit despite the fact that the divorced spouse remarried.

No matter what age parties are when they divorce; the financial fallout from a divorce can be serious and take months or even years to recover from. Considering the long-term financial impact of divorce is essential and should address retirement plans, including social security. An experienced family law attorney can help parties ensure that they are protecting their financial future after a divorce as much as possible.

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

Most parents want to support their children and provide as much as possible for them. In fact, New Mexico law imposes a duty on both parents to do just that. However, the negative feelings and financial damage caused by a divorce or child custody battle make the issue of child support pretty tricky. Here are some tips to help:

• Pay on Time. This can be hard to do when money is tight, but the parent receiving child support is often counting on the support payment to pay rent or other expenses for the children. Paying on time not only benefits the children by making sure that they have food and a roof over their heads, but it helps prevent additional conflict between parents. Moreover, there are few things that escalate conflict in child custody cases more than financial stress. And this leads to court hearings. And hearings lead to all manner of burdens and expenses. The burdens of attorney fees, court costs, potential sanctions and even jail time for failure to pay on time will far outweigh the temporary relief of putting off a child support payment.

• Pay by Check. It is essential that child support payments are made using a traceable method of payment so that the paying party always gets credit for the payments made. It happens so frequently that it is almost to be expected that any undocumented payments will be disputed by the receiving parent. Parents often believe that a money order is traceable because it is not cash, but that trace is often difficult, if not, impossible, depending on where the money order is purchased. If a parent must pay in cash or with a money order, he or she should make sure they get a receipt signed by both parties that acknowledges the amount of the payment received and the date of receipt.

• Consider Wage Withholding. A wage withholding order instructs a parent's employer to deduct the child support payment from the parent's paycheck and send it directly to the parent receiving support, or sometimes to a state agency like the child support enforcement division. Parents often resist the entry of a wage withholding order, but it can be very helpful to both parents because it ensures that the support payment is made on time. Just as important, it creates an indisputable record of all child support payments. The orders can also be structured to spread the payment over the month by taking part from each paycheck, which can help the paying parent budget appropriately.

• Exchange Income Information. The child support statute allows either parent to request updated income information from the other one time each year in order to determine whether or not child support should be modified. Parents can exercise that right each year by making the information request in writing after April so that the other parent should have current tax information available.

• File for Modification. Child support can be modified any time there has been a material and substantial change in circumstances, which can include a major change in timesharing, the emancipation of a child, and/or a large increase or decrease in income for either parent. However, that change is only effective once a new court order is entered, which means that a parent seeking a modification needs to file a motion asking the Court to modify child support as soon as a change has taken place. Unilateral changes to child support without a court order can lead to very serious consequences no matter the basis for the change.

Child support and child custody issues can be quite stressful for all concerned. There is enormous potential for high levels of conflict. With rising levels of conflict comes attorney fees which may in fact be dwarfed by the costs associated with the appointment counselors, court appointed experts, guardian ad litems, and other professionals associated with the conflict. Avoid this conflict if possible by paying in full on time and in verifiable manner. If you are financially unable to do so, then go to court immediately to address the hardship with the court.

Collins & Collins, P.C.
Albuquerque Attorneys