New Mexico Bankruptcy Laws
The process of going through bankruptcy is protected through federal and state laws. These laws differ by state and can be rather complicated. Prior to deciding about bankruptcy, be sure you have all the information about how the laws in your state will affect you. Talk to a local bankruptcy lawyer to find answers. If you fill out the free form below, you can get a free case evaluation with an attorney in your area.
New Mexico’s bankruptcy laws are designed to allow debtors to keep certain assets while they go through the bankruptcy process. Understanding these laws can help you decide if bankruptcy is the best answer to your debt problem.
New Mexico Bankruptcy Exemptions
New Mexico offers debtors two exemption schemes. The federal scheme protects:
- Up to $20,200 for your home
- Up to $3,225 for a vehicle
- Up to $1,075 for any property as a wild card
- Up to $10,125 of the value of unused homestead exemption, applied toward other property
- ERISA qualified benefits and retirement benefits
- Up to $20,200 for personal injury compensation
- Up to $1,350 for jewelry
- Up to $20,200 for tools of the trade
- Up to $10,775 in a loan value life insurance policy
- Up to $10,775 for household goods, $550 per item
- Alimony or child support
- Wrongful death, crime victims’ compensation, or public benefits or compensation
- Life insurance contract that has not matured
- Health aids
- Life insurance payments you receive from someone you depended on, like a parent
- Lost earnings payments
The state plan protects:
- Up to $60,000 for a homestead
- Up to $5,000 for real or personal property, in lieu of homestead
- Up to $4,000 for a vehicle
- Up to $500 for personal property
- Up to $1,500 for tools of the trade
- Up to $2,500 for jewelry
- Retirement fund or pension proceeds
- Public assistance or compensation
- Materials used for construction, alteration, or repair of a building or improvement project
- Books, medical and health equipment, clothing, and furniture
- Proceeds from life insurance
- 75 percent of disposable earnings
- Minimum holdings required for membership in a cooperative association
- Unincorporated association interest
- Equipment used for oil or gas wells or pipelines
New Mexico Chapter 7 Bankruptcy Law
Chapter 7 bankruptcy allows debtors to discharge much of their debt. This means that they can start fresh and try to rebuild their financial situation. However, they must pass a means test, which looks at their income to determine whether or not they qualify to file Chapter 7.
New Mexico Chapter 13 Bankruptcy Law
Chapter 13 bankruptcy does not discharge debts, but rather gives debtors a court supervised repayment plan to follow after assets are liquidated. Those who make too much money for Chapter 7 can still get court protection under Chapter 13 while they work to repay their debts.
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