Debt Relief for New Mexico Residents
6 MIN READ
Published April 07, 2023 | Updated October 08, 2024
Written by Christie Hudon
Edited by Wes Silver
In a Nutshell
Aptly named the Land of Enchantment, New Mexico offers a rich mix of cultural heritage and ruggedly beautiful Southwestern terrain. Unfortunately, it’s not all sunshine and cactus flowers for the many residents struggling with economic hardships.
Unemployment continues to rise throughout New Mexico, leaving some citizens without a stable source of income. Another disenchanting statistic is the 17.8% of residents living in poverty, a staggering 6% higher than the national average.
New Mexico residents need options to overcome debt and maximize their financial opportunities. Professional debt relief solutions are an effective tool for consumers to reset their finances and start building wealth. Read on to learn more about the top options for New Mexicans who are ready to start taking control of their financial future.
Your Options To Get Out of Debt in New Mexico
Credit Counseling
Get professional advice from a credit counselor who’s certified to help consumers navigate financial hardship.
| How It Works in New Mexico |
| Private and nonprofit credit counseling agencies operate throughout the state, typically offering low or no-cost services to low-income residents. Once you find a program you like, you’ll set up an initial meeting to determine your next steps. Credit counseling organizations also offer financial education classes to teach clients key skills like budgeting and debt management. |
| Pros |
| Credit counseling services offer personalized advice at a low cost. |
| Cons |
| While their services are valuable, credit counselors can only offer advice. It’s up to the consumer to act on it to manage debts. |
| Cost |
| Credit counseling agencies typically charge a small fee for enrolling in a program. |
| Stats |
| Although credit counseling can offer helpful advice, more consumers chose a different approach in the previous decade. Debt settlement enrollments far outpaced those of credit counseling programs since 2016. |
| Resources |
| Learn more about how credit counseling can help you determine your financial goals. |
Debt Management
Debt management offers a chance for consumers to simplify monthly debt payments and avoid late penalties.
| How It Works in New Mexico |
| Both private and nonprofit organizations operate debt management programs throughout the Land of Enchantment. After enrolling, you’ll set up an account that includes each of your outstanding debts. Next, you’ll start sending monthly payments to the debt management company that disperses your funds to creditors. |
| Pros |
| Debt management programs help you avoid late fees and ensure you don’t miss a payment. |
| Cons |
| Enrolling in a debt management program usually involves closing out most, if not all, of your credit card accounts to avoid further spending. |
| Cost |
| You’ll pay an administration fee for each account that’s part of your plan. |
| Stats |
| New Mexico’s average consumer debt is $84,778, showing many residents can benefit from debt management strategies. |
| Resources |
| Read about how debt management programs work to determine if it’s the right solution for you. |
Debt Consolidation
Consolidating debt is a DIY method some New Mexicans use to clear large debt balances.
| How It Works in New Mexico |
| Debt consolidation typically works in two ways. The first option is to take out a personal loan big enough to cover the entire balance of your current debts. Another solution is to open a zero-interest balance transfer credit card, moving your debts to the new account. |
| Pros |
| Debt consolidation is one of the most popular reasons for taking out a personal loan, and some lenders offer favorable rates and terms to aid consumers working to end debts. |
| Cons |
| Taking out a personal loan means you’ll pay interest on the entire balance of your debts. You're also more likely to pay higher rates if you don’t have a strong credit score. On the other hand, zero-interest credit cards come with big penalties if you don’t pay everything off during the initial interest-free period. |
| Cost |
| For personal loans, you’ll pay interest based on current rates. Some lenders also charge an origination fee for the loan. Zero-interest credit cards may charge a transfer fee plus high APR rates on any leftover balance once the initial zero-interest period ends. |
| Stats |
| Higher credit scores are more likely to qualify you for lower interest rates. New Mexico residents carry an average credit score of 702, putting many consumers firmly in the “Good” category of FICO scores. |
| Resources |
| Check out the 5 best debt consolidation loan options in 2024. |
Debt Settlement
Settling debt offers a fast-tracked solution for paying off unsecured debts.
| How It Works in New Mexico |
| Debt settlement organizations negotiate with creditors on behalf of New Mexicans with the goal of reducing their total debt balances. To prepare for a settlement, you’ll start making payments to a savings account set up by the organization. Once you settle, you’ll pay off creditors in a lump sum. |
| Pros |
| Consumers typically pay off debts faster and save money using this method, often up to 50% of their total debt. |
| Cons |
| Since you defer payments to save enough for a lump sum payoff, your credit score drops for a time. |
| Cost |
| Settlement companies usually charge a 15-25% fee based on your total debt. |
| Stats |
| Debt settlement is effective for consumers stuck with heavy credit card debts. New Mexico’s average credit card debt is $5,959. |
| Resources |
| Discover how debt settlement can help eliminate large balances from unsecured debts. |
Bankruptcy
For New Mexicans who’ve exhausted all other debt relief options, bankruptcy gives consumers the chance to wipe out debts at the expense of their credit.
| How It Works in New Mexico |
| Residents of the Land of Enchantment typically file either Chapter 7 or Chapter 13 bankruptcy through regional courts. It’s a good idea to consult with a bankruptcy attorney to understand your options before starting the process. An attorney can also file documents on your behalf. |
| Pros |
| Bankruptcy can reset your finances by forgiving some debts and structuring payments for other outstanding balances. |
| Cons |
| Declaring bankruptcy can negatively impact your credit score and history for up to 10 years. This makes it harder to open new lines of credit, make big purchases, or borrow money. You may also have to sell off assets to pay back creditors. |
| Cost |
| Filing fees are minimal, but attorneys may charge thousands of dollars for their services, some nearly $5,000. |
| Stats |
| A total of 1,193 New Mexicans filed for some type of bankruptcy in 2023. |
| Resources |
| Read about life after bankruptcy and what it means for consumers who use this option for debt relief. |
What You Need To Know About Debt in the State of New Mexico
Reasons New Mexicans Need Debt Relief
Credit Cards
In a period of economic inflation, when costs increase faster than income, it’s easy to start charging more on credit cards to pay essential bills. However, late payments and interest on large balances can quickly make monthly payments out of reach.
In fact, across the entire U.S., credit card delinquency increased to 7% in 2024, up from 5% just one year prior. With so many residents living in poverty, New Mexicans can quickly get stuck in a cycle of credit card debt that’s hard to escape without assistance.
Unsecured Personal Loans
Consumers take out personal loans for small and large purchases, hoping to work monthly payments into the budget. But when something unexpected comes up, it’s easy to get off track and put more money towards an emergency like car or home repairs.
When personal loans become a burden, getting help through a debt relief plan may be the best way to pay off an outstanding unsecured loan.
Medical Bills
With 11% of New Mexico’s population living without health insurance, medical bills for routine doctor visits can easily exceed a monthly budget. Even with insurance, paying a deductible for something like major surgery or an emergency room visit can cost a lot out of pocket. Many residents defer medical bills to pay for essentials like rent and utilities, hoping to save a little to start paying down big healthcare balances.
Working with a debt relief company empowers you to pay off medical debt when monthly bills spiral out of control.
Statute of Limitations on Debt Collections in New Mexico
The Statute of Limitations on Debt Collections governs how long creditors can pursue a debt using legal action. While debts never disappear if you don’t pay them off, once the time limit has passed on a certain type of debt, consumers are protected from being sued to recover the funds.
Here’s a look at New Mexico’s Statutes of Limitations on Debt Collection:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 6 years |
| Promissory Notes | 6 years |
| Open-Ended Accounts | 4 years |
| Oral Agreements | 4 years |
| Medical Debt | 6 years |
Student Loan Forgiveness in New Mexico
New Mexico offers programs to repay or offset debts accrued from student loans in the following professional fields:
Healthcare Loan Forgiveness
New Mexico repays student loans for working healthcare professionals through the Health Professional Loan Repayment Program. The program requires you to work in a high-needs area for at least three years to receive the funds.
Veteran Loan Forgiveness
New Mexico’s Department of Veterans Services ensures that eligible servicemembers receive benefits to attend colleges and universities of their choosing through the GI Bill education benefit.
Public Service Law Loan Forgiveness
This program offers loan repayment towards legal education for attorneys providing legal services to low-income and underserved New Mexico residents. The program extends to those serving in state or local government positions along with nonprofit organizations throughout the state.
New Mexico Children, Youth & Families Worker Loan Repayment Program
To encourage public service workers to take critical positions within the Children, Youth, and Families Department, New Mexico offers education loan repayment assistance to department employees. The program provides repayment for the principal and reasonable interest on federal and private education loans.
Resources for Financial Assistance in New Mexico
New Mexico’s government offers financial assistance programs to help individual consumers and families overcome hardships and meet their essential needs:
- Supplemental Nutrition Assistance Program (SNAP): New Mexico administers the federal SNAP program to residents to help those burdened by financial difficulties purchase wholesome foods.
- Women, Infants, and Children (WIC): New Mexico’s WIC program provides support to mothers who are pregnant or caring for infants and young children. WIC offers cash benefits to help mothers buy nutritious foods and multiple resources to support healthy development.
- Temporary Assistance for Needy Families (TANF): Another federal program managed through the state, TANF provides monthly cash benefits to aid families in paying for basic needs like housing and utilities.
- Low-Income Home Energy Assistance Program (LIHEAP): The LIHEAP program subsidizes energy costs for low-income families to provide essential heating and cooling services in the home.
Get Professional Help Paying Off Your Debt
Even with state-run programs or stimulus checks providing cash benefits, most New Mexico consumers still need support to pay off large debt balances. Professional debt relief through an organization like TurboDebt may be the best option for eliminating debts.
Here’s why we think consumers benefit from working with TurboDebt:
- No upfront fees
- Faster debt repayment
- Flexible payment schedule
- Customized debt-relief plans
- Big savings as you pay off large debt balances
- Service backed by over 15,000 positive TurboDebt reviews
Contact us today to start your free consultation and find out the best debt relief program for your financial situation. It’s time to live your enchanted life debt-free!
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