If you file for Chapter 7 or Chapter 13 bankruptcy in New Mexico, the New Mexico bankruptcy exemptions can help you keep some or all of your property (in Chapter 7) or reduce the total amount you must pay your unsecured creditors (in Chapter 13). (Learn how bankruptcy exemptions work in both Chapter 7 and Chapter 13 bankruptcy.)
Below you can learn what property the New Mexico bankruptcy exemptions protect, whether you can use the federal exemptions in New Mexico, what happens to exemptions if you are married and filing jointly, and more.
You Can Use Either the New Mexico or the Federal Bankruptcy Exemptions
If you file for bankruptcy in New Mexico, you choose to use either of the following sets of bankruptcy exemptions: the New Mexico exemptions or the federal bankruptcy exemptions. You cannot mix and match between these sets, you must choose one and use only the exemptions within that scheme.
If you choose to use the New Mexico bankruptcy exemptions, however, you may also use any of the federal non-bankruptcy exemptions that apply in your situation. The federal non-bankruptcy exemptions protect property such as federal retirement accounts and veterans’ benefits. You can use both the federal non-bankruptcy exemptions and the New Mexico exemptions; you don’t have to choose between the two lists.
Married Couples May Double the New Mexico Bankruptcy Exemptions
Unless otherwise stated, if you are married and filing a joint bankruptcy petition, you can double the amount of the New Mexico bankruptcy exemption if you both own the property. If only one spouse owns the property, then you cannot double the amount.
Common New Mexico Bankruptcy Exemptions
Below are some of the most commonly used bankruptcy exemptions. The statute citations, unless otherwise noted, are to the New Mexico Statutes Annotated.
In New Mexico, you can exempt up to $60,000 of equity in your home. §42-10-9 (Learn more about the New Mexico homestead exemption.)
In New Mexico you can exempt the below types of personal property. Unless otherwise stated, these exemptions are found in §42-10-1 and §42-10-2.
- books and furniture
- building materials
- cooperative association shares, although only the minimum amount required to be a member of the cooperative §53-4-28
- health aids
- jewelry up to $2,500
- materials, tools, and machinery for digging, drilling, completing, operating or repairing an oil line, gas well, or pipeline
Motor Vehicle Exemption
In New Mexico you can exempt the equity in a car, van, truck, SUV, motorcycle, or other motor vehicle up to $4,000. §42-10-1; §42-10-2 (Learn more about the New Mexico motor vehicle exemption.)
Tools of the Trade
Tools used in your trade or profession, up to $1,500. §42-10-1; §42-10-2
75% of your disposable earnings or 40 times the federal minimum wage, whichever is more. The bankruptcy judge may exempt more wages for low-income debtors. §35-12-7
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.
IRAS and Roth IRAs to $1,245,475. (This amount is adjusted every three years. For the most recent figure, see Your Retirement Account in Bankruptcy.) 11 U.S.C. § 522(b)(3)(C)(n); 9-26-4(11).
Pensions or retirement benefits. §42-10-1; §42-10-2
Public school employees. §22-11-42A
Crime victims' compensation. §31-22-15
General assistance. §27-2-21
Occupational disease disablement benefits. §52-3-37
Unemployment compensation. §51-3-37
Workers' compensation. §51-1-52
Benevolent association benefits to $5,000. §42-10-9
Fraternal benefit society benefits. §42-10-4
Withdrawal or cash value of life, accident, health, or annuity benefits. However, the beneficiary must be a New Mexico resident. §42-10-3
Life insurance proceeds. §42-10-5
An ownership interest in an unincorporated association. s53-10-2
Property of a business partnership. §54-1A-501
In New Mexico, you can use the wildcard exemption to exempt:
- up to $500 of any personal property (§42-10-1), and
- up to $5,000 of any real or personal property if you don’t use the homestead exemption (§42-10-10).
Confirming the New Mexico Bankruptcy Exemptions
This list includes some of the more commonly used New Mexico bankruptcy exemptions. There may be others. In addition, New Mexico periodically updates its exemption amounts and sometimes adds new exemptions. To find the most current laws, visit the New Mexico Compilation Commission. Be forewarned, however, that the exemptions are found in various parts of the code. To save time and ensure you’ve got the correct information, consider consulting with a New Mexico bankruptcy attorney.