New Mexico Bankruptcy Guide

New Mexico Bankruptcy Overview

New Mexico offers solid bankruptcy protections including a $60,000 homestead exemption and the ability to choose between state and federal exemptions. Understanding New Mexico's specific exemption options and requirements is essential for protecting your assets during bankruptcy proceedings.

One significant advantage New Mexico offers is the choice between state exemptions and federal bankruptcy exemptions—you can select whichever set of exemptions better protects your property. Additionally, New Mexico is a community property state, which creates unique considerations for married couples filing bankruptcy. This guide covers everything you need to know about filing Chapter 7 or Chapter 13 bankruptcy in New Mexico.

2026 New Mexico Median Income for Chapter 7 Bankruptcy

To qualify for Chapter 7 bankruptcy in New Mexico, your household income must generally be at or below the state median income for your household size. If your income exceeds these thresholds, you may still qualify through the means test or may need to file Chapter 13 instead.

New Mexico Bankruptcy Exemptions: State vs. Federal

New Mexico is one of the states that allows you to choose between New Mexico state exemptions or federal bankruptcy exemptions. You cannot mix and match—you must choose one system or the other. Most New Mexico filers choose the system that better protects their specific assets.

New Mexico State Exemptions

New Mexico state exemptions provide reasonable protection with some unique features related to the state's community property laws.

New Mexico Homestead Exemption (State)

Up to $60,000.

New Mexico's homestead exemption protects up to $60,000 of equity in your primary residence. This exemption applies to houses, condominiums, mobile homes, and any dwelling you use as your principal residence. Unlike some states, New Mexico does not have acreage limitations—the exemption is based solely on the dollar value of your equity.

New Mexico Vehicle Exemption (State)

Up to $4,000 in value.

New Mexico allows you to protect up to $4,000 of equity in one motor vehicle. This is equity—meaning the vehicle's fair market value minus what you owe on any car loans. For example, if your car is worth $12,000 and you owe $9,000, your equity is $3,000, which is fully protected.

New Mexico Personal Property Exemptions (State)

New Mexico provides specific exemptions for various types of personal property:

• Household Goods and Furnishings: Up to $500 per item, $4,000 total for furniture, appliances, books, animals, and other household goods
• Clothing: Up to $500 total
• Jewelry: Up to $2,500 total (including wedding rings)
• Health Aids: Unlimited protection for health aids
• Tax-Exempt Retirement Accounts: Unlimited protection for IRAs (subject to federal limits around $1.5 million), 401(k)s, pensions, and other qualified retirement plans
• Life Insurance: Up to $5,000 cash value or proceeds
• Tools of Trade: Up to $1,500 for tools, equipment, machinery, and materials used in your occupation
• Business Equipment: Up to $1,500 for business equipment (partnership property)
• Books and Materials: Up to $500 for materials, stock, and apparatus used in a profession

New Mexico Wage and Income Exemptions (State)

• Wages: 75% of disposable earnings or 40 times the federal minimum wage per week (whichever is greater) is protected from garnishment
• Social Security Benefits: Unlimited protection
• Veterans Benefits: Unlimited protection
• Unemployment Benefits: Unlimited protection
• Workers' Compensation: Unlimited protection
• Disability Benefits: Unlimited protection
• Public Assistance: Unlimited protection for general assistance and TANF benefits

Federal Bankruptcy Exemptions (Alternative)

Instead of using New Mexico state exemptions, you can elect to use the federal bankruptcy exemptions. These may be more favorable if you have diverse assets or can benefit from the federal wildcard exemption.

Federal Homestead Exemption

Up to $27,900 ($55,800 for married couples filing jointly).

The federal homestead exemption is lower than New Mexico's $60,000 state exemption for single filers, but comparable for married couples. If you're single with home equity between $27,900 and $60,000, New Mexico state exemptions are better. If you have less equity, federal exemptions might offer better overall protection through the wildcard.

Federal Vehicle Exemption

Up to $4,450 in value.

The federal vehicle exemption ($4,450) is slightly higher than New Mexico's state exemption ($4,000). If you have a vehicle with equity close to or exceeding $4,000, federal exemptions provide marginally better protection.

Federal Wildcard Exemption

Up to $1,475, plus up to $13,950 of any unused homestead exemption.

The federal wildcard can be very powerful for renters or those with minimal home equity. If you don't use the full federal homestead exemption, you can apply up to $13,950 of the unused portion to any property—vehicle equity, bank accounts, tax refunds, etc. Combined with the base $1,475 wildcard, you could protect up to $15,425 in personal property.

Other Federal Exemptions

• Household Goods: Up to $700 per item, $14,875 total
• Jewelry: Up to $1,875
• Tools of Trade: Up to $2,800
• Retirement Accounts: Unlimited for most qualified plans

New Mexico Bankruptcy Court

New Mexico has a single federal bankruptcy court district that covers the entire state. The U.S. Bankruptcy Court for the District of New Mexico has courthouses in multiple cities to serve residents throughout the state.

District of New Mexico Court Locations

The District of New Mexico has three courthouse locations:

• Albuquerque: 421 Gold Avenue SW, Albuquerque, NM 87103 (Main Courthouse)
• Las Cruces: 1501 West Picacho Avenue, Las Cruces, NM 88005
• Santa Fe: 100 South Federal Place, Santa Fe, NM 87501 (Limited hearings)

Cost of Filing Bankruptcy in New Mexico

The total cost of filing bankruptcy in New Mexico includes both court filing fees and attorney fees. Here's what to expect:

Court Filing Fees (2026)

• Chapter 7: $338
• Chapter 13: $313

These fees are set by federal law and are the same nationwide. In Chapter 7, you may be able to request a fee waiver if your income is below 150% of the federal poverty line, or you may request to pay the filing fee in installments over 120 days.

Attorney Fees in New Mexico

Attorney fees for bankruptcy in New Mexico vary by location, case complexity, and the attorney's experience. Here are typical ranges by city:

• Albuquerque: $1,000 - $1,700 for Chapter 7; $2,800 - $4,000 for Chapter 13
• Las Cruces: $900 - $1,500 for Chapter 7; $2,500 - $3,700 for Chapter 13
• Rio Rancho: $1,000 - $1,600 for Chapter 7; $2,700 - $3,900 for Chapter 13
• Santa Fe: $1,000 - $1,700 for Chapter 7; $2,800 - $4,000 for Chapter 13
• Roswell: $850 - $1,400 for Chapter 7; $2,400 - $3,500 for Chapter 13
• Farmington: $900 - $1,500 for Chapter 7; $2,500 - $3,700 for Chapter 13

Chapter 13 attorney fees are typically paid through your repayment plan over 3-5 years, making bankruptcy more accessible even if you cannot afford the full fee upfront. Many Chapter 7 attorneys also offer payment plans for their fees.

New Mexico-Specific Bankruptcy Considerations

Community Property State

New Mexico is a community property state, meaning most property and debts acquired during marriage are owned equally by both spouses. This significantly affects bankruptcy:

• Community Debts: Debts incurred during marriage for the benefit of the community can be discharged even if only one spouse files bankruptcy, potentially protecting the non-filing spouse from collection efforts
• Community Property: If one spouse files bankruptcy, community property may be used to pay community debts even though only one spouse filed
• Separate Property: Property owned before marriage or received as a gift/inheritance remains separate and is generally not available to pay the other spouse's separate debts
• Joint Filing Considerations: Married couples must carefully analyze whether both spouses should file or just one, based on whether debts are community or separate

Native American Tribal Lands

New Mexico has a significant Native American population with substantial tribal lands. Bankruptcy involving tribal members or property on tribal lands can involve complex jurisdictional issues:

• Trust land held by the federal government for tribal members generally cannot be reached by bankruptcy trustees
• Some tribal income may have special protections under federal Indian law
• Tribal members should consult with attorneys experienced in both bankruptcy and federal Indian law

Mobile Homes and Manufactured Housing

Mobile homes and manufactured housing are common in New Mexico due to the state's affordable housing market. These can qualify for the $60,000 homestead exemption if they are your primary residence, whether they're on land you own or in a mobile home park. The homestead protection extends to the mobile home structure itself.

Oil and Gas Royalty Interests

New Mexico has significant oil and gas production, and some residents own royalty interests in mineral production. These interests are generally considered personal property in bankruptcy. Depending on the value, they may be protected under available exemptions or could be at risk. If you own oil and gas royalties, discuss with a New Mexico bankruptcy attorney how to best protect these assets.

New Mexico Bankruptcy FAQs

Should I use New Mexico state exemptions or federal exemptions?

The choice depends on your specific assets. Use New Mexico state exemptions if: you're single with home equity between $27,900 and $60,000, or you have valuable jewelry up to $2,500. Use federal exemptions if: you're a renter or have minimal home equity (to take advantage of the wildcard), you have significant household goods, or you need more tools of trade protection ($2,800 federal vs. $1,500 state). A New Mexico bankruptcy attorney can analyze your situation and recommend the better option.

How long does Chapter 7 bankruptcy take in New Mexico?

A typical Chapter 7 bankruptcy case in New Mexico takes about 4-6 months from filing to discharge. The 341 Meeting of Creditors usually occurs 30-45 days after filing, and the discharge is typically granted 60-90 days after the meeting, assuming no complications or objections arise.

Can I keep my home in New Mexico bankruptcy?

Yes, if your home equity doesn't exceed $60,000 (using state exemptions) or $27,900/$55,800 (using federal exemptions). You must continue making mortgage payments if you have a home loan. If you're behind on mortgage payments, Chapter 13 may be a better option to catch up while keeping your home.

How does New Mexico's community property law affect bankruptcy?

In New Mexico, most property and debts acquired during marriage are community property owned equally by both spouses. If one spouse files bankruptcy, community property may be used to pay community debts. However, community debts can often be discharged even if only one spouse files, protecting the non-filing spouse. This is complex, so consult with a New Mexico bankruptcy attorney about whether both spouses should file or just one.

What happens to my oil and gas royalties in bankruptcy?

Oil and gas royalty interests are generally considered personal property in New Mexico bankruptcy. Depending on their value, they may be protected under available exemptions or could be at risk of liquidation by the bankruptcy trustee. If you own royalty interests, discuss with your attorney how to best protect them—you may need to use wildcard exemptions or consider Chapter 13 to retain valuable royalty interests.

Can I protect my mobile home in New Mexico bankruptcy?

Yes, mobile homes and manufactured housing can qualify for the $60,000 homestead exemption (or federal homestead exemption if you choose federal exemptions) if the mobile home is your primary residence. This applies whether the mobile home is on land you own or in a mobile home park.

Do special rules apply to tribal members filing bankruptcy in New Mexico?

Yes, bankruptcy involving tribal members can involve special considerations. Trust land held by the federal government for tribal members generally cannot be reached by bankruptcy trustees. Some tribal income may have additional protections under federal Indian law. Tribal members should consult with attorneys experienced in both bankruptcy and federal Indian law to understand how tribal status affects their bankruptcy case.

Can I file bankruptcy on my own in New Mexico without an attorney?

While it's legally possible to file bankruptcy without an attorney (called filing "pro se"), it's generally not recommended. Bankruptcy law is complex, and New Mexico's community property laws and choice between state and federal exemptions make professional guidance valuable. Mistakes can result in losing property you could have protected or having your case dismissed. Most New Mexico attorneys offer free or low-cost initial consultations.

How does bankruptcy affect my credit score in New Mexico?

Bankruptcy will negatively impact your credit score initially, typically dropping it by 130-200 points for those with previously good credit. A Chapter 7 bankruptcy remains on your credit report for 10 years, while Chapter 13 remains for 7 years. Many New Mexico filers find they can qualify for new credit within 2-3 years after discharge, especially if they practice good credit habits post-bankruptcy.

How much does it cost to file bankruptcy in New Mexico?

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees in New Mexico typically range from $850-$1,700 for Chapter 7 and $2,400-$4,000 for Chapter 13, depending on your location and case complexity. Many attorneys offer payment plans, and Chapter 13 attorney fees are usually paid through your repayment plan over time.

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