SANTA FE, N.M. (KRQE) – Declaring bankruptcy gives New Mexicans in heavy debt a chance at a fresh start. Under a new law, the state will change protections for those reorganizing their finances.
This year, legislators passed Senate Bill 216, sponsored by Democratic legislators. The bill adjusts the number of wages that can be garnished from individuals going through bankruptcy. It also sets what household goods and vehicles are exempt from being taken away in bankruptcy.
Under the new law going into effect this July, individuals undergoing bankruptcy can keep up to $75,000 worth of home furnishings and household goods. They can also keep $10,000 worth of vehicles and $5,000 worth of personal jewelry.
They can keep up to $2,500 worth of art made by family members and up to $15,000 worth of tools, books, and instruments (if they are necessary for work). And they can retain an increased share of their property or home if they own land.
Those changes represent a significant increase compared to the previous law. For example, before, individuals could only keep one vehicle worth $4,000, rather than the $10,000-worth of vehicles under the new law.
The new law also changes how wages can be garnished. Previously, the law let individuals keep 75% of their disposable earnings or an amount equal to a week’s worth of the federal minimum wage. Under the new law, New Mexicans are allowed to keep up to a week’s worth of state, local, or federal minimum wage, whichever is highest.
