When the Bills Don’t Stop: Your Legal Options for Debt Relief in New Mexico

It starts slowly. A missed credit card payment. An unexpected medical bill. A job change that throws off your finances. Before long, the calls from creditors become constant—and the anxiety feels impossible to shake.

If this sounds familiar, you are not alone. Thousands of people in Las Cruces and across New Mexico are dealing with overwhelming debt. But what many do not realize is that there are legal tools designed to help you get back on stable ground—without losing everything.

Below, we answer the most common questions about debt relief and bankruptcy protections available under New Mexico and federal law.

 

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What are my legal options if I can’t pay my debts?

If you’re behind on payments and struggling to keep up, here are the most common legal paths forward:

Each option has pros and cons, depending on your income, assets, and goals. A consultation with a New Mexico bankruptcy attorney can help you evaluate the best strategy.

How does bankruptcy actually help?

Filing for bankruptcy triggers something called an automatic stay. This immediately stops:

  • Collection calls
  • Lawsuits
  • Wage garnishments
  • Foreclosure proceedings
  • Utility shutoffs

It gives you breathing room while a plan is put in place to either discharge your debts (Chapter 7) or repay them in manageable installments (Chapter 13).

Is it possible to keep my house or car?

Yes. New Mexico and federal laws include exemptions that protect your primary residence, vehicle, retirement accounts, and personal belongings in most bankruptcy filings. Especially under Chapter 13, you can catch up on missed mortgage or auto payments without losing the property.

Will filing ruin my credit?

Not permanently. Bankruptcy will stay on your credit report for up to 10 years, but many people begin rebuilding their credit within 12–18 months. In fact, eliminating high-interest debt often improves your debt-to-income ratio, which is a key factor in credit scoring.

Who qualifies for bankruptcy in New Mexico?

Eligibility depends on your income, debt type, and financial situation:

  • Chapter 7: You must pass a means test based on New Mexico’s median income.
  • Chapter 13: You need a steady income and unsecured debts under certain thresholds.

Kenneth G. Egan can walk you through a full evaluation to determine which chapter, if any, you qualify for.

How long does the process take?

  • Chapter 7: Typically 3–4 months
  • Chapter 13: 3 to 5 years, depending on your repayment plan

Once complete, eligible debts are discharged, and creditors can no longer pursue you for payment.

Do I need an attorney?

You are not required to have one, but the process is detailed and mistakes can lead to serious consequences, including:

  • Case dismissal
  • Loss of property
  • Denied discharge
  • Continued collection efforts

Attorney Kenneth G. Egan has practiced law in Las Cruces since 1991. He personally handles every bankruptcy case, offering individualized legal guidance, not just paperwork processing.

Take Back Control of Your Finances, Without Guesswork

Financial stress is exhausting—but you have more options than you think. Bankruptcy is not about failure; it is about resetting your financial life under the protection of the law.

📞 Call (575) 523-2222 to schedule a free case evaluation with Kenneth G. Egan and learn what debt relief looks like for your specific situation.