Wage Garnishment in New Mexico: What the Law Says and What Bankruptcy Changes

How much of your pay can be garnished in New Mexico?

New Mexico frames the rule as what stays with you. Under NMSA 1978 § 35-12-7, the portion exempt from garnishment in situations other than child support enforcement is the greater of 75 percent of your disposable earnings for any pay period, or an amount each week equal to 40 times the highest applicable minimum hourly wage rate at the place the wages were earned — the highest federal, state or local minimum rate for an eight-hour day and a forty-hour week applicable when the wages are payable. Where an order or decree for child support is enforced, 50 percent of disposable earnings for any pay period is exempt. Disposable earnings are the part of your wage or salary left after deducting amounts required by law to be withheld. The statute directs the director of the financial institutions division to publish a table of equivalent exemptions for pay periods other than one week.

How do federal wage garnishment limits fit with New Mexico's rule?

Federal law sets a separate ceiling. Under 15 U.S.C. § 1673(a), the maximum part of an individual's aggregate disposable earnings for any workweek subject to garnishment may not exceed 25 percent of disposable earnings for that week, or the amount by which those earnings exceed thirty times the federal minimum hourly wage, whichever is less. That ceiling does not apply to a support order issued by a court of competent jurisdiction or under a qualifying state administrative procedure, to an order of a United States court with jurisdiction over chapter 13 cases, or to a debt due for any state or federal tax (15 U.S.C. § 1673(b)). Support garnishments carry their own graduated caps in that subsection. Federal law defines earnings, disposable earnings and garnishment in 15 U.S.C. § 1672. It also leaves intact state laws that prohibit garnishment or allow less of it than federal law does (15 U.S.C. § 1677).

What do New Mexico statutes require of creditors and courts?

The ordinary court-rule procedure starts after a judgment is filed, on the judgment creditor's timely application (Rule 1-065.2 NMRA; Rule 2-802 NMRA; Rule 3-802 NMRA). Magistrate Rule 2-802 also requires an affidavit of reasonable investigation and no knowledge of property in the state subject to execution. Read the statutory affidavit provisions in NMSA 1978 § 35-12-1 alongside the applicable court rule, not as stand-alone filing instructions. A writ issued before judgment does not attach wages or salary at all (NMSA 1978 § 35-12-3). The garnishment is served on the garnishee and orders an answer under oath within twenty days, and a copy must be sent to the defendant's last known address (NMSA 1978 § 35-12-2). If the defendant is employed by the garnishee, the court may order the garnishee to pay the non-exempt wages each pay period until the judgment is satisfied or the employment relationship ends (NMSA 1978 § 35-12-4). An employer charged as garnishee must still pay the employee the exempt portion when due (NMSA 1978 § 35-12-8).

Which income is protected from garnishment under New Mexico law?

The wage share described above is the main income protection in the garnishment statutes, and it follows the money: amounts exempt under NMSA 1978 § 35-12-7 keep their exempt status when deposited into a personal bank account, provided they are reasonably traceable. Wages and salaries of public officers and employees are reachable in magistrate court only after the plaintiff has a judgment, and that statute does not prevent any available claim of exemption (NMSA 1978 § 35-12-10). Separately, personal property exemptions apply to garnishment in magistrate court, and the person entitled to one claims it by filing a list of the particular property and the grounds for the exemption (NMSA 1978 § 35-4-2). The approved garnishment rules also state that a failure to assert a claim of exemption does not waive unemployment compensation protections (Rule 1-065.2 NMRA). Which protections reach your specific income depends on the debt and on which court entered the judgment.

Which statutory protections may matter when contesting a New Mexico garnishment?

Contesting a garnishment is governed by the rule for the court that entered the judgment, and the three rules are not identical. Under each, the garnishee must answer within twenty days of service (NMSA 1978 § 35-12-4) and must deliver the served forms to the judgment debtor on or before the fourth business day after service of the writ. A judgment debtor claiming a statutory exemption — in magistrate and metropolitan court, one other than wages — files it with the court within ten days after the garnishee serves notice of the right to claim exemptions. The judgment creditor then has ten days after service of that claim to file a notice of dispute and request for hearing; if it does not, the claim of exemption is granted. A hearing must be held within ten days after the notice of dispute is filed; the court may postpone its decision pending discovery needed to determine the status of the property (Rule 1-065.2 NMRA; Rule 2-802 NMRA; Rule 3-802 NMRA). Missing the claim deadline does not waive wage exemptions or unemployment-compensation protections. The rules also preserve limited automatic account protection for actions filed on or after July 1, 2023.

• A creditor must provide a notice of the right to claim an exemption, or a claim form, containing a complete list of exemptions provided by law (NMSA 1978 § 42-10-13).
• If the judgment is for medical debt as defined in the Patients' Debt Collection Protection Act, the application for the writ must comply with the Supreme Court-approved medical-debt form (Rule 1-065.2 NMRA).
• Either party may controvert the garnishee's answer, and judgment on the writ does not enter until a hearing on a filed dispute has been held (NMSA 1978 § 35-12-5; Rule 2-802 NMRA).

How does filing bankruptcy affect a New Mexico garnishment?

A voluntary bankruptcy case is commenced by filing a petition with the bankruptcy court, and that filing itself constitutes an order for relief (11 U.S.C. § 301). Filing a petition generally operates as a stay, applicable to all entities, of the commencement or continuation of judicial proceedings against the debtor on pre-petition claims, of the enforcement against the debtor or property of the estate of a judgment obtained before the case began, and of any act to collect a pre-petition claim (11 U.S.C. § 362(a)). The ordinary initial stay does not require a separate court order; repeat-filing rules can change whether it arises. The stay is not absolute. Exceptions are listed in 11 U.S.C. § 362(b), including the withholding of income that is property of the estate or of the debtor for payment of a domestic support obligation under a judicial or administrative order or a statute. A creditor may also ask the court, after notice and a hearing, to terminate, annul, modify or condition the stay (11 U.S.C. § 362(d)).

What if you have had an earlier bankruptcy case dismissed?

Prior dismissed cases change how the stay works. If a single or joint case is filed by or against an individual under chapter 7, 11 or 13, and a single or joint case of that debtor was pending within the preceding one-year period but was dismissed, the stay terminates with respect to the debtor on the 30th day after the filing of the later case, as to any action taken with respect to a debt, property securing that debt, or a lease (11 U.S.C. § 362(c)). A case refiled under a chapter other than chapter 7 after dismissal under section 707(b) is excepted from that rule. On the motion of a party in interest, and after notice and a hearing completed before the 30-day period expires, the court may extend the stay as to any or all creditors, subject to conditions it imposes, only if the party demonstrates that the later filing is in good faith as to the creditors to be stayed.

What should you ask a lawyer about a New Mexico garnishment?

Two threshold facts shape almost every answer: which court entered the judgment, and what kind of debt it is. A New Mexico legal aid program or a consumer bankruptcy lawyer can tell you which rule governs and whether its deadlines have run. Useful questions include which court's garnishment rule applies, whether the forms served on your employer reached you within the time that rule allows, whether the amount withheld matches the share NMSA 1978 § 35-12-7 leaves with you, and whether the debt is a support obligation or a tax, which federal law treats differently. If bankruptcy is being considered, ask how 11 U.S.C. § 522(b) applies: exemption choice turns on the state or local law applicable where your domicile has been located for the 730 days immediately preceding the filing, or, if it was not in a single state, the place of domicile for the 180 days immediately preceding those 730 days or a longer portion of that 180-day period than any other place.

• If the domiciliary requirement would render a debtor ineligible for any exemption, that debtor may elect to exempt property specified under subsection (d) of 11 U.S.C. § 522, and qualifying retirement funds are addressed separately in the same section.

Frequently asked questions

What must an employer do with the exempt part of my wages?

An employer charged as a garnishee in a magistrate court civil action must pay the employee, when due, the wages or salary exempt under NMSA 1978 § 35-12-7 (NMSA 1978 § 35-12-8). Amounts exempt under that section also keep their exempt status when deposited into a personal bank account, provided they remain reasonably traceable. If the amount you receive looks smaller than the statute leaves, the garnishee's answer can be controverted (NMSA 1978 § 35-12-5).

Can a creditor garnish wages before it has a judgment?

Service of a writ issued in advance of judgment does not attach wages or salary due from the garnishee (NMSA 1978 § 35-12-3). The ordinary procedure in Rules 1-065.2, 2-802 and 3-802 NMRA describes issuance after judgment. Do not treat the separate statutory bond and affidavit provisions in NMSA 1978 § 35-12-1 as a complete statement of current court procedure. If papers arrive before judgment, ask a lawyer which rule applies and whether any of your wages can be reached.

How long does the automatic stay last?

For acts other than those against property of the estate, the stay continues until the earliest of the time the case is closed, the time it is dismissed, or — in an individual chapter 7 case or a case under chapter 9, 11, 12 or 13 — the time a discharge is granted or denied (11 U.S.C. § 362(c)). That duration is qualified by the repeat-filing rules in the same subsection, the exceptions in 11 U.S.C. § 362(b), and relief under 11 U.S.C. § 362(d).

What happens if two or more earlier cases were dismissed?

If a single or joint case is filed by or against an individual and two or more single or joint cases of that debtor were pending within the previous year but dismissed — other than one refiled under a chapter other than chapter 7 after dismissal under section 707(b) — no stay goes into effect on the later filing (11 U.S.C. § 362(c)). Within 30 days after the later filing, a party in interest may request that the court impose the stay as to any or all creditors, which it may do after notice and a hearing only on a showing of good faith as to the creditors to be stayed, effective when the order is entered.

Can an employer fire someone over a garnishment?

Federal law provides that no employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness, and it makes a willful violation punishable by fine or imprisonment (15 U.S.C. § 1674). That provision is framed around one indebtedness; federal law also leaves in place state laws prohibiting discharge where earnings have been garnished for more than one indebtedness (15 U.S.C. § 1677). It is not a remedy for money withheld incorrectly.

Sources

• NMSA 1978 § 35-12-1
• NMSA 1978 § 35-12-2
• NMSA 1978 § 35-12-3
• NMSA 1978 § 35-12-4
• NMSA 1978 § 35-12-5
• NMSA 1978 § 35-12-7
• NMSA 1978 § 35-12-8
• NMSA 1978 § 35-12-10
• NMSA 1978 § 35-12-13
• NMSA 1978 § 35-12-19
• NMSA 1978 § 35-4-2
• NMSA 1978 § 42-10-13
• Rule 1-065.2 NMRA
• Rule 2-802 NMRA
• Rule 3-802 NMRA
• 11 U.S.C. § 301
• 11 U.S.C. § 362 · official source
• 11 U.S.C. § 522 · official source
• 15 U.S.C. § 1672
• 15 U.S.C. § 1673
• 15 U.S.C. § 1674
• 15 U.S.C. § 1677

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