New Mexico residents have several options for debt relief, including hardship programs, consolidation and other financial resources.

Debt Relief in New Mexico

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Home to 2,115,877 people, New Mexico is one of the states with the lowest amount of consumer debt per person. Even so, the average New Mexican household owes $42,868 in things like credit cards, student loans, and mortgage loans. Along with this, the poverty rate is one of the highest in the country at 18.2%.

Whether you’re looking for debt relief in New Mexico or need other forms of financial assistance, you’re in luck. The Land of Enchantment has many state-specific hardship programs and debt relief options to help.

Are you eligible for debt relief?

If you’re a New Mexico resident, DebtHammer may be able to help.

New Mexico debt statistics

Many residents of New Mexico are actively seeking debt relief. Here are some recent debt and credit statistics in the state:

  • Average household debt: $42,868 (Source: Federal Reserve)
  • Average student loan debt: $34,211
  • Average credit score: 699
  • Median mortgage payment: $1,262
  • Bankruptcies: 1,363 (2021)
  • Personal income: $51,860 (annual mean wage)
  • Child poverty: 21.6%
  • Unemployment: 4.3%

Debt relief options for New Mexico residents

If you need debt relief in Mexico, here are some of the best options:

  • Debt settlement: With debt settlement, you can negotiate with your creditors to reduce how much you owe. Done right, you could save up to 50% or more on the original debt.
  • DIY plans: A DIY plan is another way to deal with expensive debts, especially if you’re being harassed by debt collectors. Similar to debt settlement, you may be able to reduce how much you owe. Or you may be able to set up a repayment plan, waive late fees, or lower interest rates.
  • Debt management plan: Nonprofit credit counseling agencies typically have debt management plans (DMPs) for those who are drowning in debt. With a DMP, you get assigned a credit counselor who negotiates with your creditors for you for better terms or lower monthly payments. A DMP can be helpful if you need to consolidate payments into one and want to potentially pay down debt sooner.
  • Debt consolidation loans: With a debt consolidation loan, you can combine multiple debts into one loan with one monthly payment. This is best for those with good or excellent credit who can get a lower interest rate on the new loan.
  • Bankruptcy: Declaring bankruptcy is usually considered a last resort to debt relief, but it can help give you a fresh start. Speak with a bankruptcy attorney about whether bankruptcy is right for you.

Debt settlement in New Mexico

New Mexico has many debt settlement agencies. Debt settlement isn’t for everyone, but it can be helpful if any of the following apply:

  • You’re unable to keep up with multiple monthly payments or high-interest debts
  • You’ve fallen behind on bills and are using payday loans, credit cards, or other expensive options to cover daily expenses
  • Bankruptcy appears to be the only other option

Creditors and lenders are not required to agree to debt settlement. However, when it works, you could cut down what you owe by 50% or more. This can make it much easier to make monthly payments and repay your debts.

It’s possible to do debt settlement without an agency, though it can be tricky and require good communication skills. Whether you go through a company or a DIY route, you’ll need to start setting aside money until you have enough to pay the settled amount in a lump sum.

In New Mexico, debt settlement can help with many consumer debts, including:

  • Personal loans
  • Credit cards
  • Old judgments
  • Department store cards
  • Student loans in default
  • Other unsecured debts

Before going this route, make sure you’ve considered all other options (besides bankruptcy) first. Also, be sure to choose a legitimate debt settlement agency, as there are many scammers in the industry.

New Mexico debt settlement companies

When it comes to New Mexico debt relief, here are the best debt settlement companies:

Debt settlement attorneys

New Mexico is also home to several highly-rated debt settlement attorneys. Here are some to check out:

Debt resources for New Mexico residents facing hardship

Residents of New Mexico have many resources available to help in the face of financial hardship. This includes state and federal options, which can help with things like:

  • Rent or mortgage payments 
  • Utility bills
  • Education expenses
  • Childcare assistance
  • Healthcare
  • Legal aid (low-cost or pro bono)

State hardship programs

New Mexico has multiple state-specific hardship programs to help those struggling to keep up with monthly expenses. These include:

  • Rental Assistance Program: Under the New Mexico Home Fund, the Emergency Rental Assistance program helps residents with rent and utility payments. It can also help with mortgage payments. Phone: (505) 827-4984
  • New Mexico Kids: This program offers free or very low-cost health insurance coverage for children under the age of 19. It’s part of Medicaid. Phone: (505) 827-7946
  • Homeowners Assistance Fund Programs: New Mexico has private and government assistance programs to help with mortgage payments and prevent foreclosure. Services include grants for mortgage payments, insurance, and taxes ($20,000 maximum per household). Some programs can also help through free foreclosure mediation and other assistance.
  • New Mexico SNAP Food Stamp Program: Low-income families can use SNAP benefits to buy food from participating grocery stores. Phone: (800) 843-8303
  • NMWorks, or Temporary Assistance for Needy Families (TANF): This program provides cash assistance and support services to families in need. Phone: (800) 843-8303
  • Lifeline and Link-Up: Both programs can help low-income New Mexicans pay for their phone and cellular bills.
  • Rent vouchers: New Mexico State, public housing authorities, and HUD all offer section 8 housing vouchers to help those who need them. There is usually a waiting list, though.
  • New Mexico Mortgage Finance Authority: This organization partners with local nonprofits and charities to help residents facing a housing-related crisis.
  • LIHEAP: The Low Income Home Energy Assistance Program helps eligible people pay for their heating and cooling bills.
  • LIHWAP: The Low-Income Household Water Assistance Program can help low-income individuals pay for water bills. Eligible households can receive up to $1,500.
  • Medicaid: This federal program provides health insurance to eligible New Mexicans.

If you need more assistance, check with Yes New Mexico for their programs.

Food assistance

Besides this, New Mexico also has many food banks. These free resources are essential for the 271,210 residents — including 99,100 children — struggling with hunger.

If you’re looking for a food bank, the New Mexico Association of Food Banks has a list of options. Here are a few of the biggest ones in the state:

Debt collection laws in New Mexico

New Mexico debt collection is regulated by the Fair Debt Collection Practices Act (FDCPA). The FDCPA is meant to protect consumers from debt collectors engaging in certain tactics, including:

  • Harassing an individual about a debt they owe
  • Threatening to take legal action (ex. lawsuit or wage garnishment) that they don’t intend to take
  • Misrepresenting themselves as someone else (ex. a legal professional or government representative)
  • Using abusive tactics to collect a debt
  • Claiming an individual owes a debt they don’t, or for a different amount
  • Attempting to collect additional money like interest (unless it’s allowed within the debt agreement)
  • Contacting the individual at irregular hours (ex. outside of business hours) or when expressly told not to

Some states also have state-specific debt collection laws, but New Mexico is not one of them. With that said, the state offers certain protections to people in debt.

For example, your wages can only be garnished up to 75% of your disposable income within any pay period. Garnishment may continue until the debt — and any related fees — is fully repaid.

Additionally, New Mexico exempts up to $5,000 in vehicle equity and $60,000 in a dwelling ($120,000 if the debtor is married). The debtor (person who owes) must claim these exemptions, or they’ll be automatically waived.

Income and employment in New Mexico

In 2020, New Mexico’s unemployment rate was 9.8%. Since then, it’s dropped to 4.3%, which is notably higher than the national average unemployment rate of 3.7%. Overall, the state still ranks 43rd in terms of unemployment.

According to the Los Alamos Daily Post, the state ranks fourth in terms of job growth with 45,000 new jobs. Although the average personal income is still just $51,860 — about $15,000 lower than the national average — there’s hope for higher wages and more jobs.

New Mexico is not a right-to-work state. It is an employment-at-will state, however. This means an employee or an employer can terminate their arrangement without consequence at any point, provided the reason isn’t discriminatory or illegal. This could mean lower job security for residents.

How to apply for unemployment benefits in New Mexico

It’s possible to apply for unemployment benefits online on the New Mexico Department of Workforce Solutions website. Once on the site, you’ll find general information about unemployment benefits.

You’ll also be directed to the New Mexico Workforce Connection website where you can create an account and begin the application process. Creating an account will also give you access to an online job search portal.

After making an account, you can also register for the New Mexico Workforce Connection Online System. Doing this will grant you access to the unemployment insurance system.

Some of the information you’ll need includes:

  • Personal information (ex. name, SSN)
  • Contact information (ex. mailing address, phone number)
  • Start and end dates with your previous employers (past 18 months)
  • Reason(s) for no longer working at your most recent jobs
  • Income details
  • Alien registration number and expiration date (if not a US citizen)

If you need help creating an account, here’s a PDF to guide you through the process. Alternatively, visit a local New Mexico Workforce Connection Center for additional assistance. For help filing a claim, contact technical support: (877) 664-6984 or [email protected].

It can take up to seven business days to receive your first payment after application approval. Each ensuing benefits check takes about three days to clear in your account.

Benefits are available for up to 26 weeks, though it may be possible to get an additional 13 weeks in periods of extended unemployment.

Banking and taxes in New Mexico

New Mexico has a progressive tax rate that ranges from 1.70% to 5.90%. Here are the five tax brackets for single filers based on income (double income amounts for married or joint filers):

  • 1.70% for $0 to $4,000
  • 3.20% for $4,000 to $8,000
  • 4.70% for $8,000 to $12,000
  • 4.90% for $12,000 to $157,000
  • 5.90% for $157,000+

The state’s sales tax is 5.125%.

Around 8.7% of New Mexicans are unbanked, according to a 2019 survey. This means they don’t have a checking or savings account.

New Mexico housing market

Approximately 68.0% of New Mexico residents own their own homes. The average home value is $300,527, slightly lower than the national average of $357,589. This is a 14.7% increase over the past year.

The median monthly home payment is $1,269, according to Business Insider. Meanwhile, the average rent price in Albuquerque, NM is $1,235 for an 812-square-foot apartment. However, rent prices vary based on the city and apartment size.

For homeowners, New Mexico has a homestead exemption of $60,000 ($120,000 for joint owners). The owner must also use the property as their primary residence to be eligible.

Retirement in New Mexico

The average New Mexican has $428,041 saved for retirement, according to Personal Capital. The average New Mexico residents needs closer to $596,935 to live comfortably in retirement.

Average New Mexico insurance premiums

On average, New Mexico residents spend around $1,272 a year on their car insurance premium. This is about 14.5% below the national average.

A typical homeowners insurance premium is $2,024 annually for a home valued at $250,000. This is higher than the U.S. average of $1,312 a year.

Payday lending status in New Mexico: Prohibited

Since January 2018, payday lending has been prohibited in New Mexico. This is due to new state legislation — HB 347 — that reformed how small, high-interest loans are handled. Now, licensed lenders can no longer issue new payday loans.

Payday Loan terms and debt limits in New Mexico

Although payday loans are technically prohibited in the state, small loans due still exist:

  • Maximum loan amount: $10,000
  • Maximum Interest Rate (APR): 36% (after passage of HB 132 in March 2022)
  • Minimum loan term: 120 days
  • Maximum loan term: N/A

Statute of limitations on debt in New Mexico

New Mexico’s statute of limitations on debt ranges from four to 10 years:

  • Medical debt: Six years
  • Credit cards: Four years
  • Auto loan debt: Four years
  • State tax debt: 10 years

Help for Veterans

As of 2019, New Mexico was home to an estimated 135,230 Veterans. That’s about 8.4% of the state’s adult population. With so many Veterans, it’s no surprise that the state has programs to help Veterans facing homelessness, unemployment, or other financial hardships.

New Mexico Department of Veteran Services:

Facilities in New Mexico

Some of the biggest VA facilities in New Mexico are:

For a complete list of offices, check with the New Mexico VA directory.

Employment resources for Veterans

For Veterans in New Mexico who need help finding employment, here are the best resources:

  • CareerOneStop — comprehensive resource for those seeking job resources, an online career portal, or career advice
  • — virtual career fairs for veterans and military spouses
  • Helmets to Hardhats — connects Veterans and active military personnel to employers in the construction industry
  • Hiring Our Heroes — works with Veterans and other military members to improve their job outlook
  • My Next Move — helps Veterans transition into a civilian career that uses their military skill set
  • Warriors to Work — matches Veterans with prospective employers

The bottom line

If you’re seeking financial assistance in New Mexico, there are various state-specific and federally funded programs available. Depending on the program, you could find immediate or long-term help with bills and other expenses. New Mexico also has many debt relief options, including debt settlement, debt consolidation, and credit counseling.


How long can a debt be collected in New Mexico?

A creditor can try to collect on a consumer debt with a written contract for four to six years. State tax debts are legally collectible for up to 10 years.

When does the statute of limitations begin in New Mexico?

The statute of limitations in New Mexico typically begins on the date of the last payment.

Am I responsible for my spouse’s debt if I get divorced in New Mexico?

New Mexico is a community property state, meaning all debts and assets gained during the marriage are divided evenly upon divorce. If you can prove a debt existed prior to marriage, the person whose name is on the account will typically be held responsible.

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