Exemptions Available to Chapter 7 Debtors in Bankruptcy Cases

Previously we discussed in a recent blog post the use of the homestead exemption by Debtors in Chapter 7 bankruptcy cases to protect the equity they have in their home. This particular exemption is but one of several which the State of New Mexico allows Debtors in this state to claim when filing for bankruptcy protection. Other types of exemptions which New Mexico law allows debtors to assert include, but are not limited to, the following:


  • Insurance benefits including those from life, health and accident policies as well as annuity benefits
  • Withdrawal or cash value of annuity benefits
  • Ownership interests in an unincorporated association
  • Property owned by a business partnership of which the debtor is a part
  • Pension or Retirement Benefits
  • Public Benefits such as AFDC benefits, compensation to victims of crime, occupational disease disability benefits, unemployment benefits and worker’s compensation benefits
  • An exemption up to $1500 for tools of one’s trade
  • A minimum of 75% of one’s wages earned but unpaid ( the bankruptcy judge can raise that percentage for low-income debtors who need a greater proportion of their wages to make ends meet during the bankruptcy)
  • Several personal property exemptions for (1) books, health equipment and furniture, (2) building materials, (3) clothing, (4) Cooperative Association shares, (5) jewelry up a value of $2500 and (6) motor vehicle up to $4000 in value


A Debtor may also rely on what is known as the “wild card exemptions”. The Debtor can claim a $500 exemption for personal property generally. In addition, a Debtor can claim $2000 in exemption for any property in lieu of the available homestead exemption. Because each of these exemptions are defined carefully by statute, it is critical potential bankruptcy carefully consult with bankruptcy counsel before filing to obtain a sense of what kind of exemptions may apply in their particular situation.


In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases in New Mexico. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment with one of its New Mexico bankruptcy lawyers or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.