Community Debt
New Mexico is a community property state, which means that property acquired during marriage is considered jointly owned and any debt incurred during marriage is equally shared. This debt is known as ‘community debt’. Equal responsibility for community debt is presumed regardless of the amount of income either spouse makes. Furthermore, responsibility for community debt can occur with the signature of just one spouse and without knowledge of the other spouse.
There are a few exceptions to the general rule providing some relief to the innocent spouse. These exceptions are very limited. There are limited exceptions for transactions where a signature is required for the validity of the debt. Gambling debts are also generally excluded. Tax liability in some cases may be excluded depending on the circumstances. Student loans are typically considered the debt of the spouse that acquired the loan. Depending on the circumstances, there may be other exceptions as well those these are extremely limited.
It often comes as a surprise to parties when they learn that they are fully liable on the debts of their spouse. This realization is particularly painful when one of the parties has been irresponsible or reckless in spending. The issue most often arises with credit card and other consumer debt.
The rule holds even though the other innocent spouse either did not know or even objected to the spending. The community debt rules can be very hard on and seemingly unfair to the innocent spouse. The harshness of the rule can be reduced in some cases where exceptions are found. As such, it is very important to carefully analyze the marital debt for any possible exceptions.
There are a few exceptions to the general rule providing some relief to the innocent spouse. These exceptions are very limited. There are limited exceptions for transactions where a signature is required for the validity of the debt. Gambling debts are also generally excluded. Tax liability in some cases may be excluded depending on the circumstances. Student loans are typically considered the debt of the spouse that acquired the loan. Depending on the circumstances, there may be other exceptions as well those these are extremely limited.
It often comes as a surprise to parties when they learn that they are fully liable on the debts of their spouse. This realization is particularly painful when one of the parties has been irresponsible or reckless in spending. The issue most often arises with credit card and other consumer debt.
The rule holds even though the other innocent spouse either did not know or even objected to the spending. The community debt rules can be very hard on and seemingly unfair to the innocent spouse. The harshness of the rule can be reduced in some cases where exceptions are found. As such, it is very important to carefully analyze the marital debt for any possible exceptions.
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