New Mexico Bankruptcy Exemptions

You can protect property in a New Mexico bankruptcy using New Mexico's bankruptcy exemption laws.

Updated February 1, 2019

You don’t need to worry that you’ll lose all of your assets when filing for bankruptcy. New Mexico’s bankruptcy exemptions will allow you to protect the things you’ll need to maintain a household and job, such as equity in a home and car, and a retirement account.

New Mexico Exemptions v. Federal Bankruptcy Exemptions

Some states, including New Mexico, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property using both lists, but if you elect New Mexico’s state exemptions, you can use the federal nonbankruptcy exemptions, too.

Common New Mexico Bankruptcy Exemptions

Here are some of the more common exemptions in New Mexico. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in New Mexico, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the New Mexico Statutes Annotated or the federal law.

New Mexico Homestead Exemption

42-10-9 – Up to $60,000 of equity in the filer’s residential property.

New Mexico Motor Vehicle Exemption

42-10-1 & 42-10-2 - Up to $4,000 of equity in a motor vehicle.

New Mexico Wildcard Exemption

Wildcard

42-10-1 - Up to $500 of any personal property (not real estate).

42-10-10 – Up to $5,000 of any real or personal property if the filer doesn’t use the homestead exemption.

Other New Mexico Exemptions

Personal Property

42-10-1 & 42-10-2 - An unlimited amount of clothing; books; furniture; health aids. Jewelry up to a value of $2,500.

48-2-15 - Building materials.

53-4-28 - Shares needed for membership in a cooperative association.

Wages

35-12-7 - A court-ordered amount or the greater of the following: 40 times the federal hourly minimum wage or minimum of 75% of disposable earnings.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) — IRAS and Roth IRAs to maximum (amount changes).

10-11-135 & 10-11-136 - Public employee retirement benefits.

10-12B-7 & 10-12C-7 - Judge and magistrate pensions.

29-4-10 - State police pensions.

42-10-1 & 42-10-2 - Pension or retirement interest or proceeds.

Public Benefits

27-2-21 - Public assistance.

31-22-15 - Crime victims' compensation.

51-1-37 - Unemployment compensation.

52-1-52 - Workers' compensation.

52-3-37 - Occupational disease disablement benefits.

Tools of the Trade

42-10-1 & 42-10-2 – Tools needed in a trade or profession up to a value of $1,500.

Insurance

42-10-3 - Life, accident, health or annuity benefits or cash value.

42-10-4 - Benevolent association benefits up to $5,000.

42-10-5 - Life insurance proceeds.

59A-44-18 - Fraternal benefit society benefits.

Other

53-10-2 - Ownership in an unincorporated association.

54-1A-501 - Business partnership property.

57-28-5 - Escrow funds for construction.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a New Mexico Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming New Mexico Exemptions

This list includes the majority of bankruptcy exemptions available in New Mexico, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the New Mexico Statutes Annotated or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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