New Mexico Debt Relief

In a Nutshell

New Mexico, the Land of Enchantment, is famous for its cuisines, scenery, and culture, making the tourism sector thrive and one of the leading employment sectors in the states. Although it’s home to thriving industries like oil and gas, it has high unemployment rates resulting in many of its residents struggling with debt.

Debt can be a major source of stress and anxiety, making it difficult to meet day-to-day expenses. Fortunately, in New Mexico, there are several excellent debt relief options available, including debt consolidation, debt settlement, and bankruptcy.

Last year we were able to help residents achieve an average savings of 49.78% of their total debt. So, if you’re looking for effective strategies and low-cost solutions to alleviate debt, don’t hesitate to get in touch. We cover all you need to know about how different debt relief options work in New Mexico below, as well as key statistics and other financial hardship resources specific to helping residents in the state.

New Mexico: Economic Picture

The economy of New Mexico needs help to meet its consumer demands. This is seen from the shortage of homes, the high cost of living that’s increasing consumer debt due to low incomes, and unfunded pension liabilities. As a result, New Mexico consumers have had to bear the burden of costs that come with borrowing past their income levels, often resulting in many New Mexicans sinking into debt.

How does debt relief work in New Mexico?

Some of the best forms of New Mexico debt relief work by negotiating for lower principal debt amounts by way of lower interest rates, cancellation of late repayment fees, lower monthly payments, or partial or full debt forgiveness. All of these aspects come into play depending on the debt relief option suitable to your monthly income, credit score, and personal financial situation.

Debt and finance statistics specific to the state

Some key debt and financial statistics in the state of New Mexico:

• The average consumer debt in New Mexico increased to $80,508 in 2022
• The average auto loan debt is $24,837
• Residents pay a monthly median mortgage cost of $1,359 and a monthly rental fee of $897
• The median home value is $184,800
• The median student debt loan in the state is $28,571, and an average of $34,211
• The median household income in the state is $54,020, and the per capita income is $29,624
• The average credit score in the state is 699

Average consumer debt

The average consumer debt in New Mexico increased to $80,508 in 2022 from $79,194 in 2021. This was due to increased consumer spending and low-income levels that resulted in low disposable incomes.

Credit card debt

In 2022, residents of New Mexico owed an average credit card debt of $5,350, which is an increase from $4,821 in 2021. The increase in the average credit card debt in the state is largely due to the increase in consumer spending as people try to keep up with the high cost of living.

Auto loan debt

New Mexico residents own an average of 2 cars, and 89.1% use cars as their mode of transport to work. As such, they amassed an average auto loan debt of $24,837 in 2021, up from $23,700 in 2020, due to increased car prices because of supply chain disruptions.

Mortgage debt

New Mexico has a median home value of $276,179 and a homeownership rate of 68.2%. Areas like Santa Fe trend upward, with home values at $526,026, while areas like Roswell and Farmington sell for $146,744 and $213,794, respectively.

Residents of the Land of Enchantment pay a monthly median mortgage cost of $1,359 and a monthly rental fee of $897.

Student loan debt

Residents of New Mexico have a combined student debt loan of $7.8 billion. The average student debt loan is $34,211, and 44.3% of students with loans are below the age of 35. However, the median student debt loan in the state is $28,571.

Household debt

As the national household debt decreased to 75.20% of the GDP in Q3 of 2022, the debt-to-income ratio in New Mexico increased to 1.596 from 1.534 in 2021.

Bankruptcy

In general, the number of bankruptcy cases in New Mexico has been declining since the Great Recession. In 2022, there were 1,075 bankruptcy cases, from 1,510 in 2021. Chapter 7 bankruptcy cases were the highest at 909, while Chapter 13 bankruptcy cases followed at 157 and Chapter 11 bankruptcy cases at 8.

Average income and employment

At the peak of the pandemic, unemployment rates in New Mexico reached a high of 9.8%, which has decreased to a rate of 4.4% in 2022. This figure has further dropped to 3.5% in January 2023.

The drop in unemployment rates is directly related to the industrial sector in the state, where mining has a growth of 9.2%, and healthcare and social assistance, the largest employer, experienced a 1% growth rate in 2022. Generally, the state’s growth rate is 1.4%.

The median household income in the state is $54,020, and the per capita income is $29,624. However, 18.4% of the population in the state is living below the poverty.

Credit scores

New Mexico’s average credit score sat at 699 in 2022, unchanged from the previous year. A poor saving culture has led to credit card utilization, thus affecting credit scores negatively for those who fail to pay credit card debt.

Regardless of the unchanged credit scores, a FICO score of 699 is considered adequate for accessing personal loans.

Identity theft

New Mexico is among the best states when it comes to dealing with identity theft due to its identity theft passport laws.

The state had 2,088 identity theft cases and 11,948 fraud and other cases, with a median fraud loss of $390.  The top types of identity theft in the state include the following;

• Credit card fraud at 34%
• Other identity theft at 25%
• Bank fraud at 17%
• Employment and tax-related fraud at 15%
• Phone or utility fraud at 13%

Banking and tax info

New Mexico has 32 banking institutions with total deposits of $17,414 million, a decrease from the $17,847 in assets during the previous quarter. The largest financial market is Albuquerque, with $21,451 million in deposits.

New Mexico is considered tax-friendly because of its various incentives, which aim to lure investors and grow businesses, so unemployment rates continue to decline. Its residents have the following tax burdens;

• A top individual tax rate of 5.9% and an individual state and local tax rate of 8.8%
• The top income tax rate is 5.9%
• A state sales tax rate of 5.125% and an average local sales tax rate of 2.71%. There’s also a gasoline tax of 18.88 cents per gallon of gasoline and a $2 cigarette tax for every 20-pack cigarette.
• The property tax is 0.67% of the homeownership and a per capita state and local property collection of $899.

How We Helped New Mexico With Debt Relief Last Year

TurboDebt is a debt relief company that has managed to work with 776 clients from New Mexico. Out of this number, 288 clients enrolled in our debt relief program, with an average client enrolled debt of $19,553. Upon completion of the debt relief program, individuals saved up to 50% of their total enrolled debt before fees.

Take advantage of our free consultation and learn how much we can save you with a customized debt relief program.

Top Types of Debt to Get Relief from in New Mexico

At TurboDebt, we enroll the following top types of debt in our debt relief program. Join us today for a free consultation and learn about solutions for a debt-free life.

Credit Card Debt

Credit card debt can be difficult to clear because of its late payment fees and high-interest rates. Many residents of New Mexico spend more than they earn because of a low disposable income and high cost of living, and they do this by acquiring credit card debt. This financial situation puts them in a difficult position since clearing credit card debt is daunting because of its late payment fees and high-interest rates.

At TurboDebt, we’re passionate about helping with credit card debt through our top-rated debt relief option. It offers you an opportunity to become debt free from credit card debt through consistent monthly or bi-monthly payments at a lower amount than you would pay through your normal credit card bill. Contact us now to take advantage of our free consultation and see how much you could save.

Divorce Debt

The New Mexico Community Property Law binds the debt and assets into one, meaning that when you divorce, your debts and assets are divided between spouses regardless of who owns them. You may end up accumulating divorce debt if your spouse has accumulated personal debts.

Our experts can help you work towards becoming free from divorce. It all starts with an examination of your debt situation and finances to determine the lowest-cost solution that can help you achieve your goals.

Business Debt

With general and specific industry incentive tax credits, industries find setting and running a business in New Mexico lucrative. Therefore, they take out commercial loans to fund their expansion to build infrastructure and maintain operation costs, resulting in business loans.

TurboDebt is determined to help you clear your business debt, which can help you avoid debt collection agencies from pursuing foreclosure on your business assets.

Medical Debt

New Mexicans have an average medical debt of $2,692, and 12% of them are uninsured, making it difficult to access affordable quality healthcare. As such, residents accumulate medical debt when trying to access medical care.

When you work with a local agency, nonprofit credit counselor, or one of our TurboDebt specialists, you will be able to find the best debt management option for you depending on your debt–to–income ratio and other key factors. Through a well-reviewed program like ours, you’ll be able to start paying off medical debt and learn how to better position yourself to avoid the same debt pitfalls in the future.

Homeowner Debt

The housing market in New Mexico isn’t in a healthy state. The number of houses that sold above the listing price decreased to 7.2% from 15% in May 2022, and there was a decline in the number of homes for sale. This highlights a market that’s underdeveloped and is lagging behind in meeting consumer demand. As a result, many New Mexicans end up with losses when trying to sell their homes, resulting in homeowner debt.

New Mexican debt relief can help you settle your homeowner debt through a debt management program. DMPs work best by asking for lower interest rates on loans making it easy for you to clear homeowner debt.

Retirement Debt

The increase in pension funding has led to a strong market rally which has further increased the chances of closing the pension funding gap in 2021. This is only a short-term effect as the projected growth in pension returns is expected to drop to around 6% from 60% annually.

In addition, New Mexicans have an average pension-funded ratio of 67%, which is below the national average of 71%, and the state does not stress testing to ascertain future market health. These conditions lead to a possibility of accumulating retirement debt due to low or unfunded pension returns.

At TurboDebt, it’s our priority to help you minimize and pay down retirement debt through our top-rated debt relief options.

New Mexico Debt Relief Options

Residents of New Mexico can access the following debt relief options to maintain a debt-free life;

Debt management programs

Debt management programs are generally offered by nonprofit credit counselors who negotiate a debt management plan with creditors tailored to your debt-to-income ratio (DTI). DMPs work by settling unsecured debt and reducing their interest rates, hence making monthly payments manageable to clear debt.

New Mexicans who enroll in DMPs can clear the unsecured debt in 3 to 5 years by making one monthly payment to a single checking account. The nonprofit credit counselors will use the account to make a lump sum payment to your creditors.

Debt consolidation loans

Debt consolidations refer to taking a new large low-interest loan and using it to clear your high-interest debts or credit card debts. Your consolidated loan should cover your accrued debts to achieve the benefits of debt consolidation loans, which are low-interest and monthly payments.

Debt consolidation loans include balance-transfer credit cards, personal loans, and home-equity loans, but to access them, you must have a good credit score and DTI. When you’re accessing debt consolidation loans, beware of the repayment period and interest fees to avoid paying extra than the loans you’re consolidating.

Debt settlement

Debt settlement is a debt relief option where creditors and third-party debt relief companies agree on a lump sum debt payment cost and forgive the debt balance. New Mexicans who apply for debt settlement plans get partial cancellation of their debts.

You must be conscious of debt settlement companies that ask for an upfront fee, as they may be scammers. You can avoid such situations by checking the credibility of these companies on Trustpilot, Google, or the Better Business Bureau.

Credit counseling

Credit counseling is a debt relief option that enriches you with money, debt management, and budgeting skills. It does this by offering educational workshops where certified credit counselors advise you. They’ll also help you attain credit reports and choose a debt management plan.

Together, you’ll select a debt management plan based on your DTI. The nonprofit credit counseling company will achieve debt management by negotiating for a waiver on late payment fees and reduced interest rates.

Bankruptcy

Bankruptcies are filed by businesses and residents who can’t afford to pay off their debts. They offer you a clean slate where debt is forgiven or reorganized for payment, but they’ll hurt your credit report for 7 to 10 years. The bankruptcy cases New Mexicans file include the following;

Chapter 7 bankruptcy cases allow residents of New Mexico to liquidate their nonexempt properties to clear off unsecured debt like credit card debt, while Chapter 13 bankruptcy cases are for residents with consistent incomes who are able to clear their debt under a debt reorganization plan. In Chapter 13, your nonexempt assets don’t need to be liquidated to clear off the debt.

Chapter 11 bankruptcy cases are suitable for businesses that are unable to clear their business debt. It allows for a debt reorganization plan while you continue with your business operations as outlined in the US bankruptcy code.

You must consult for legal advice from a law firm to decide on the best type of bankruptcy case to file, as secured debt, like auto loan debt, may result in repossession.

Debt forgiveness

Debt forgiveness is a form of debt relief where your entire debt is forgiven. For it to work, you must be eligible for a debt forgiveness program which includes the following;

• Federal student loan forgiveness
• Teacher loan forgiveness
• Public service loan forgiveness

Debt and Financial Hardship Resources in New Mexico

Low-income or needy families in New Mexico can get debt and financial hardship resources to meet their basic needs under the following programs;

Temporary assistance programs

The TANF program in New Mexico referred to as NMWorks, offers eligible low-income families with monthly cash assistance to cover their basic needs, including housing, clothing, and food.  Other cash benefits for eligible low-income families in New Mexico include the low-income energy assistance program and the Refugee resettlement program.

State health and human services

The state of New Mexico has a Patients Debt Collection Act that seeks to protect low-income families and persons from the collection of medical debt. Other financial assistance and hardship programs available to New Mexicans include the following;

• Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
• Immunization programs
• Centennial Care program, which acts as the state’s Medicaid, delivers physical health, emotional health, long-term care, and community-based benefits for qualifying low-income residents.
• The New Mexico Crisis and Access Line is a free service offered to residents struggling with addiction and substance abuse.

Child care

The Child Care Assistance Program is a subsidized childcare program for families that are studying, working, or looking for employment and are living 400% below the federal poverty level.

Toy lending and resource libraries are community library that offers free toys, educational materials, videos, and books to parents and caregivers.

New Mexico Maternal Child Health seeks to prevent infant and child deaths by advising parents on the best maternal care health.

Shelters for the homeless

The state of New Mexico seeks to avoid and mitigate homelessness that results from poverty, foreclosures, or any challenging economic situations. Residents should contact the shelters in advance to check the availability of beds before visiting to stay.

Free transportation services

The Rio Metro ACCESS Program offers free transportation services to New Mexicans with income below 150% of the federal poverty level.

A senior transportation program also offers transportation services to the elderly when going for medical appointments and shopping.

ModivCare also offers transportation services for medical trips to doctors.

Get Debt Relief in New Mexico Today

Debt relief options offer key advantages compared to simply making monthly payments or continuing to struggle with a never-ending cycle of debt. Often times you will be able to achieve reduced interest rates, lower monthly payments, better help in managing your credit score, or a combination of these.

TurboDebt is here to help you make an informed decision on managing your debt and working towards building wealth again. Take advantage of our free consultation to learn more today.