New Mexico Homestead Laws

It seems like a common theme in the news today -- people in debt losing their homes. Fortunately for Land of Enchantment homeowners, homestead protection laws could protect people’s homes in the event of a bankruptcy. Homestead protections statutes allow a person in debt to set aside a specific amount of real or personal property, referred to as a "homestead," that would be off limits to some creditors. This is basic overview of homestead laws in New Mexico.

Homestead Statutes in New Mexico

State homestead laws can differ in the limits they place on the acreage or value of property to be designated as a homestead. New Mexico law limits the homestead exemption to a property value of $30,000. New Mexico’s homestead statutes are highlighted below.

Homestead Exceptions

As good as they are, New Mexico’s homestead exemptions might not protect your home in every instance. Four general exceptions exist to the homestead rule:

• If there was a pre-existing lien on the property before the establishment of homestead;
• If the homestead property was specifically pledged as credit for a mortgage;
• If you owe past due taxes to the State of New Mexico and New Mexico counties or municipalities; or
• If you owe money to mechanics, contractors, or builders for work performed in repairing or improving the property.

Additionally, these are state homestead protections, and may not apply to federal income tax liens. Under the Constitution’s Supremacy Clause, if there is an overlap or a conflict of law, state laws are subject to federal override. That being said, the Internal Revenue Service (IRS) has normally been reluctant to foreclose on a person’s home to collect on a tax debt. The IRS usually only get involved if a homestead property is mortgaged or sold off before the federal tax lien has expired.

New Mexico Homestead Laws: Related Resources

It can be difficult to keep track of state homestead exemptions, and the exceptions to them. And bankruptcy laws can be just as confusing. For additional articles and resources on this topic, you can visit FindLaw’s section on Homestead Protections. If you would like legal assistance with a homestead issue, you can consult with a New Mexico bankruptcy attorney or a New Mexico real estate attorney.