How to Get Debt Relief in New Mexico

Dena Standley | October 19, 2022

Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

SoloSuit is on its way to rescue you from debt

Summary: If you're struggling with debt in New Mexico, SoloSuit can help you find the relief you need.

Many New Mexicans struggle to pay their debt every month. Many owe thousands of dollars on student loans, credit cards, medical bills, and other unsecured loans. The pandemic also caused those who were barely managing to pay their debts to fall behind on payments due to the dynamics that affected income generation.

Debt relief programs help struggling New Mexicans manage their debt by helping them reduce the overall amount significantly, receive manageable monthly payment plans, and give them a fresh start. Other programs do not directly help reduce debt but assist those in severe debt situations to receive free or subsidized basic needs such as healthcare, food, and shelter.

Today we will help you understand more about your debt situation, know how to spot fake debt relief companies or individuals, and give you three debt relief options to consider using.

New Mexico debt collection laws and information

New Mexico is among the thirteen states in America that spend more than they earn. It is the third in this category with a 119% spending rate. This means that an average New Mexican resident owes $1.19 for every dollar they earn.

If you're a New Mexico resident, there are laws in place to protect your rights. For example, creditors and debt collectors cannot take you to court if the debt you owe is past the statute of limitations. The statute of limitations is the time period in which a debt is susceptible to legal action. In New Mexico, the statute of limitation ranges from four to ten years. The table below breaks it down according to the type of debt:

New Mexico Statute of limitations on debt
Type of debt	Statute of limitations
Credit card	4 years
Auto Loan	4 years
Medical	6 years
Mortgage	6 years
State tax	10 years
Source: FindLaw

Remember that once you make any payment to a debt that is about to expire, the clock resets. If you have debt expiring soon, you can wait it out or negotiate with the creditor to pay 30–50% of the debt you originally owed. You can also request them to remove the debt from your credit report once you make payments. If you choose to wait it out, the debt will remain on your credit report for seven years. But if it passes the statute of limitations, the creditor or debt collector cannot take you to court for it.

Be wary of debt relief scammers

If you are drowning in debt, you can easily fall for scammers who promise to settle your debts for pennies on a dollar. Although hundreds of reputable debt relief organizations offer helpful information and services, others want to scam you by offering unrealistic guarantees. Some characteristics of debt relief scammers include:

They ask for upfront fees: Genuine debt relief companies will not ask for payment until they succeed in getting you out of debt to a reasonable level.
They refuse to give you a written contract: They may try to convince you that a verbal agreement is enough. Even if they give you a contact, cross-check for other red flags before entering an agreement.
They pressure you to sign up before a specific deal expires.
They make exaggerated promises and guarantees without thinking through or consulting your creditors.

The Fair Trade Commission received 20,500 consumer complaints concerning debt and credit counseling scams in 2021. Before working with any debt relief company, research it and check its ratings across multiple platforms.

New Mexico debt relief programs and options

The debt relief options available in New Mexico depend on the type of debt you have, the interest rates, your credit score, and your ability to provide basic needs for yourself and your loved ones.

As a resident of New Mexico, there are state services in place to help you find debt relief. If you find yourself drowning in debt, check out these New Mexico debt relief programs to see if you qualify:

New Mexico Temporary Assistance for Needy Families (TANF): Provides a monthly cash benefit used to meet basic family needs such as housing, utilities, and clothing.
Community Assistance and Community Services Block Grant: Offers emergency assistance through six Community Action Agencies (CAAs) located throughout the state using money from the Community Service Block Grant (CSBG). These programs include assistance for food, housing, medicine, work and education.
Low Income Home Energy Assistance Program (LIHEAP): Assists eligible persons and families with their heating and cooling costs.
General Assistance for Disabled Adults and Unrelated Children: The objective of General Assistance (GA) is to provide cash assistance to dependent needy children and disabled adults who are not eligible for other cash assistance programs.
Supplemental Nutrition Assistance Program (SNAP): Provides financial assistance to eligible New Mexicans with low income and limited resources to purchase food products. SNAP benefits are simple to use to purchase qualifying food products at participating grocery stores.

Now, here are three more general debt relief options to explore:

Consider debt settlement

Debt settlement is often used to offer relief from personal loans, credit cards, and medical bills. This option allows you to pay less than the amount you owe. Creditors have to agree to a reduced payment and sign a contract. As much as it offers quick relief from debt, it also affects your credit score because debt settlement agreements remain on your credit report for seven years.

Some debt relief companies will request you to stop making payments to your creditors for 4–6 months or longer to pressure them to enter an agreement because they may fear you will not succeed in paying the whole amount. Failing to pay the debt can cause problems with your creditor; the plan may not work, and they may sue you for defaulting. The following video shows you how to respond to a debt lawsuit.

Utilize a debt consolidation loan

Debt consolidation works for New Mexicans with relatively good credit scores. This method entails getting a new loan with better interest rates to cover several loans. Consumers feeling overwhelmed by multiple debts can get relief from combining these debts into one.

If your credit score is extremely low, you can find a cosigner to help you get a personal loan. Their credit score will determine your interest rate, meaning that a higher credit score will get you a lower interest rate. Finding someone willing to become a cosigner may be a challenge because failing to make payments will lower their credit score significantly.

File for bankruptcy

Bankruptcy effectively helps you manage all your credit card debts and most personal loans. It is the most viable option if you are sure you cannot make consistent debt payments and creditors are already suing you to garnish your wages or gain access to your bank account.

Bankruptcy adversely affects your credit score for 7–10 years, and you will not be able to get a new line of credit until the period expires. Scrutinize the effects it will have on your future before choosing this method.

SoloSuit can help you find relief from creditors

Solosuit software helps consumers deal with debt collectors by offering several documents you can send without the help of a lawyer. Our Debt Validation Letter allows you to ask the debt collectors to verify the debt, and our Answer helps you send a professional response to a creditor who has sued you. Watch this video explaining how the software works.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate