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Here's how it works in New Mexico:
What You Can Settle
Debt settlement in New Mexico does not include any kind of secured debt like auto loans, mortgages or lines of credit with collateral. Since lenders on this kind of account can seize your possessions for delinquency, they're less inclined to negotiate a settlement. Unsecured debt, with the exception of some federally protected loans -- student loans are the most common example -- can be included in a New Mexico debt settlement plan.
Even though it's a legal process, debt settlement is a negotiation not unlike buying a used car. To best "win" that conversation, it's good to know what assets your creditors can't seize. New Mexico bankruptcy law exempts the following assets:
- Home value up to $30,000, or $2,000 of real or personal property in lieu of your home
- A motor vehicle worth up to $4,000
- $500 of property
- Jewelry up to $2,500 in value
- Tools of your profession or trade up to $1,500
- Books, furniture, clothing, building materials and health aids.
- Life, accident and health insurance benefits if the beneficiary lives in New Mexico.
Retirement benefits some other public benefits similarly exempted. Although a debt settlement isn't the same as a Chapter 7 bankruptcy, that is the threat your creditors want to avoid. It pays to go into that talk knowing what you really stand to lose.
Statute of Limitations
New Mexico law applies a statute of limitations on any credit account that has fallen into delinquency, after which you can apply to end the debt. Written contracts and promissory notes require six years of delinquency, while oral contracts and open lines -- including credit cards -- require four years. The statute of limitations law includes complex provisions for when it begins or ends having an effect on a particular account. Let us help you navigate the details of this aspect of consolidating debt in New Mexico.
Credit counseling is one alternative to bankruptcy that can put you on more solid financial footing without destroying your credit at the same time.
What Credit Counseling Does
Credit counseling involves a variety of services to help individuals and families under too much debt. These include:
- Education about personal finance and using credit
- Planning assistance with a personal budget and loan repayment
- Administrative assistance in getting foreclosure prevention, debt negotiation and similar legal relief
Credit counseling also helps you feel in more control of your finances and situation. It helps give you the ability to make better decisions about money and debt, since you're acting from a position of strength instead of one of desperation.
Credit Counseling Fees and Costs
A variety of lawyers and debt service companies will offer credit counseling for a fee in New Mexico, but the best services come from funded nonprofit organizations that will offer credit counseling without charging money for the services. However, some services will have attached fees for filing with the government that the organization usually passes on to you. Such fees typically run between $40 and $$100, and the organization you work with should be open and upfront about the source of those fees.
Be wary of any credit counseling service that charges large sums for basic advice and budgeting help. This is a common scam that takes advantage of the desperation many in-debt families feel.
Where to Go For Help
DebtConsolidation.com offers a variety of free resources to provide you with education and planning help to take control of debt in New Mexico. The nonprofit organization New Mexico Project for Financial Literacy provides classes in basic finances and debt reduction for free at locations throughout the state.
After you get some basic financial planning help, you'll be able to decide whether or not you need to enroll in a full debt management plan. The group that gave you your initial help should be able to point you toward the best provider of more robust assistance. You can also check with the New Mexico Department of Justice, which maintains a list of approved and reputable credit counseling agencies.