2023 New Mexico Statutes › Chapter 40 - Domestic Affairs › Article 3 - Property Rights › Section 40-3-11 - Priorities for satisfaction of community debts.

A. Community debts shall be satisfied first from all community property and all property in which each spouse owns an undivided equal interest as a joint tenant or tenant in common, excluding the residence of the spouses. Should such property be insufficient, community debts shall then be satisfied from the residence of the spouses, except as provided in Subsection B of this section or Section 42-10-9 NMSA 1978. Should such property be insufficient, only the separate property of the spouse who contracted or incurred the debt shall be liable for its satisfaction. If both spouses contracted or incurred the debt, the separate property of both spouses is jointly and severally liable for its satisfaction.
B. Unless both spouses join in writing in the creation of the underlying debt or obligation incurred after the marriage, a judgment or other process arising out of such post-marital debt against one spouse alone or both spouses shall not create a lien or otherwise be subject to execution against the interest of the nonjoining spouse in the marital residence, whether held by the spouses as community property, joint tenants or tenants in common.
C. The priorities or exemptions established in this section for the satisfaction of community debts must be claimed by either spouse under the procedure set forth in Section 42-10-13 NMSA 1978, or the right to claim such priorities or exemptions is waived as between a spouse and the creditor.
D. This section shall apply only while both spouses are living and shall not apply to the satisfaction of debts after the death of one or both spouses.
History:
1953 Comp., § 57-4A-5, enacted by Laws 1973, ch. 320, § 6; 1975, ch. 246, § 4; 1995, ch. 184, § 2.
ANNOTATIONS
The 1995 amendment,
effective July 1, 1995, substituted "Subsection B of this section or Section 42-10-9 NMSA 1978" for "Section 24-6-1 NMSA 1953", added Subsection B, redesignated former Subsections B and C as Subsections C and D, and substituted "42-10-13-NMSA 1978" for "24-7-1 NMSA 1953" in Subsection C.
Debt incurred after death of spouse.
— This section prohibits the district court from applying the priority and division rules of community debt to a debt that is incurred after the death of a spouse. If the laws governing community debt do not apply to divide debt that accumulates after the death of a spouse, it follows that such debt is not to be treated as community debt.
Karpien v. Karpien
, 2009-NMCA-043, 146 N.M. 188, 207 P.3d 1165.
Determination whether community or separate tort.
— Section 40-3-9 NMSA 1978 leaves to the courts the problem of determining whether a tort committed by a spouse during marriage is a "community" or a "separate" tort. Under the rule followed in most community property states, the test to be applied in such cases is an after-the-fact determination of whether the act in which the spouse was engaged at the time of the tort was one which was of actual or potential benefit to the community. If it was of benefit, the tort is a "community" tort, and thus a community debt, to be collected under the provisions of this section.
Dell v. Heard
, 532 F.2d 1330 (10th Cir. 1976).
It is inappropriate to enter a judgment against one spouse solely because the other spouse has committed a community tort. Such a judgment could readily create confusion, because the judgment ordinarily could not be executed against the separate property of the spouse who was not the tortfeasor.
Naranjo v. Paull
, 1990-NMCA-111, 111 N.M. 165, 803 P.2d 254.
There is no reason why the same court that hears a tort case could not concurrently decide whether the tort was a community tort, at least when both spouses are defendants. Such a proceeding should not be foreclosed just because the plaintiff may also have the option of waiting until execution on the judgment to litigate whether the tort was a community tort.
Naranjo v. Paull
, 1990-NMCA-111, 111 N.M. 165, 803 P.2d 254.
No cause of action against husband by wife's judgment creditor.
— Where judgment creditor of wife who committed tort in family car brought suit against husband and argued his cause of action was for an after-the-fact determination that wife's tort was a community tort which rendered the husband's separate property liable for satisfaction of the judgment debt, the court believed the issues presented by appellant under the community property laws did not set forth a cause of action against husband but would be determined if and when judgment creditor proceeded to execute on property belonging to husband.
Dell v. Heard
, 532 F.2d 1330 (10th Cir. 1976).
Joinder of joint payee spouses in garnishment proceeding.
— Where husband is judgment debtor and the judgment of the trial court in a garnishment proceeding indicates that garnishee is indebted on a promissory note to husband and wife, if the note is not a community asset, both payees under the note should be joined so as to adjudicate their respective rights under the note, but if the note is a community asset, wife would be considered a proper but not indispensable party.
Jemko, Inc. v. Liaghat
, 1987-NMCA-069, 106 N.M. 50, 738 P.2d 922.
Use of community property.
— New Mexico law permits the satisfaction of a separate debt of husband's from the husband's interest in community funds.
Nat'l Bank of Ariz. v. Moore
, 2005-NMCA-122, 138 N.M. 496, 122 P.3d 126, cert. denied, 2005-NMCERT-010, 138 N.M. 494, 122 P.3d 1263.
Law reviews.
— For article, "The Community Property Act of 1973: A Commentary and Quasi-Legislative History," see 5 N.M.L. Rev. 1 (1974).
For comment, "A Comparison of State and Federal Exemptions: 11 U.S.C. § 101-1330 (Supp. II 1978)," see 10 N.M.L. Rev. 431 (1980).
For article, "Survey of New Mexico Law, 1979-80: Commercial Law," see 11 N.M.L. Rev. 69 (1981).
For note, "Community Property - Spouse's Future Federal Civil Service Disability Benefits are Community Property to the Extent the Community Contributed to the Civil Service Fund During Marriage: Hughes v. Hughes," see 13 N.M.L. Rev. 193 (1983).
Am. Jur. 2d, A.L.R. and C.J.S. references. —
Spouse's liability, after divorce, for community debt contracted by other spouse during marriage, 20 A.L.R.4th 211.