Most people want to know whether they can keep valuable property before filing for bankruptcy—especially a home. If you qualify to use the New Mexico homestead exemption, you can protect some or all of the equity in your house. In this article, we explain:
For more bankruptcy information, read How To File Bankruptcy in New Mexico.
New Mexico lets filers use either the federal exemption system or New Mexico's state exemption system, so you'll have two homestead amounts to choose between. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.
To help you make an informed choice, we've listed both exemption amounts below. We've also included links to more complete federal and state exemption lists so you'll have an easier time deciding which set will work best for you.
If you're married, keep in mind that spouses can double some exemption amounts, but not all. Find out about other filing considerations for spouses.
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Federal Homestead Exemption |
New Mexico Homestead Exemption |
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Homestead exemption |
$27,900 |
$60,000 |
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Can spouses who file a joint bankruptcy double the exemption? |
$55,800 is available to spouses who co-own property. |
$120,000 is available to spouses who co-own property. |
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Homestead exemption law |
11 U.S.C. § 522(d)(1) |
N.M. Stat. Ann. § 42-10-9 |
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Other information |
Amounts will adjust on April 1, 2025. |
Amounts adjust periodically. |
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Compare other federal and state exemptions. |
In New Mexico, the homestead exemption applies to the dwelling and the land. If the homeowner does not own the land, the homeowner must be leasing or purchasing the land.
You can file for bankruptcy in New Mexico after living there for more than 180 days. However, you must live in New Mexico much longer before using New Mexico exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.
But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.
In New Mexico, the homestead exemption is automatic – you don't have to file a homestead declaration with the recorder's office to claim the homestead exemption in bankruptcy. Instead, when filing for bankruptcy, you'll list your homestead exemption on Schedule C: The Property You Claim as Exempt when completing your bankruptcy forms. You can find out about other requirements you'll need to meet in Your Home in Chapter 7 or Your Home in Chapter 13.
You'll find New Mexico's homestead exemption in the New Mexico Statutes Annotated at § 42-10-9 in the New Mexico's online law library and on the New Mexico Compilation Commission website. Learn about finding state statutes in Laws and Legal Research.
Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.
Updated April 7, 2022