Wage Garnishment in New Mexico

Having your wages garnished is not a pleasant experience. Wage garnishment can happen once a creditor like a lender or collection agency gets a court order against you if you don’t pay your bills. It allows them to take money directly from your paycheck. But people in New Mexico are protected by state law and federal laws, which limit how much can be garnished. This article will cover what wage garnishment is, how it works in the Land of Enchantment, and what you can do about it.

What Is Wage Garnishment?

Wage garnishment is a tool creditors use to collect an overdue debt by taking money directly from your paycheck. Most creditors must first sue you. If they win the lawsuit, the court will issue a judgment that allows them to collect the money you owe, plus any interest, fees, or additional costs. New Mexico law governs how much a creditor can take each paycheck.

Who Can Garnish My Wages in New Mexico?

A creditor with a valid court judgment can garnish your wages in New Mexico. This may be the original creditor you had the debt with or a collection agency or debt buyer that’s purchased the debt. Once they have the judgment, they’re called the judgment creditor and you’re called the judgment debtor. 

Not all creditors have to get a court order to garnish your wages. If you have unpaid debts including income taxes, court-ordered child support payments, and alimony, your paycheck can be garnished without a court order. This is also true if you’ve defaulted on federal student loans. But most consumer debts, including private student loan debt and credit card debt, require creditors to get a garnishment order — sometimes called an income withholding order — to garnish your wages. This article focuses on debts that require creditors to get a court order for wage garnishment.

New Mexico Wage Garnishment Process

Creditors must follow these steps before they can garnish your wages in New Mexico.

Step 1: The creditor brings a debt collection lawsuit against you.

The first step in the wage garnishment process is a debt collection lawsuit. The creditor must properly serve a summons and complaint on you. This may be served by a person called a process server, by personal service, or by mail. You need to respond to this complaint. Responding allows you to tell your side of the story and bring any objections or defenses you may have. If you don’t respond, the judge will issue the creditor a default judgment, which allows them to continue to take steps to garnish your wages.

Creditors must demonstrate in court that you owe the debt. They will submit evidence at a court hearing to try to prove this to the judge. Similarly, debt buyers will have to show that there is a valid chain of title and they now own the underlying debt obligation from you. If they are successful in proving this, the court will issue a money judgment against you. 

Step 2: The creditor applies for a writ of execution and a writ of garnishment with the court.

At this point, the creditor has to get a writ of execution. The writ of execution allows the sheriff to take your property (including your real estate and wages) and use the proceeds from the sale of your property to pay back the amount owed to your judgment creditor. Then the creditor can apply for a write of garnishment to garnish your wages. This must include the name and address of the garnishee. For wage garnishments, the garnishee is usually your employer. The court may then issue a writ of garnishment. The court clerk will then prepare a service packet with all of the required supporting documents. 

Step 3: The creditor has the garnishment service packet served on your employer.

The judgment creditor must serve the garnishment service packet (which contains the application for writ of garnishment, the writ of garnishment, and answer to writ of garnishment) on the garnishee in the same way that the summons and complaint was served on the debtor in the debt collection lawsuit. Your employer must then deliver the packet to you, which should also contain a notice of right to claim exemptions and claim of exemptions forms.

Within 20 days, your employer must file an answer, which will include information about your employment situation, wages, and pay frequency. If they don’t, the creditor can file a motion for default judgment against the garnishee. If there is a default judgment, the garnishee may become responsible for the entire amount of the judgment. 

Step 4: You can file an objection and notify the court of exemptions.

The garnishee must deliver the documents in the garnishment service packet to you so you can respond. Within 10 days of receiving the documents, you must file either a notice of dispute and request for hearing or a claim of exemptions with the court.

If you believe you weren’t given proper notice, the creditor lacks jurisdiction, or the creditor or garnishee made errors or mistakes in the writ of garnishment, you should file a notice of dispute and request for hearing. This is your chance to be heard and dispute the garnishment. If you believe that the garnishment will cause you financial hardship, you should consider objecting and explaining your situation at this point as well.

Aside from your wages, you may be receiving other income. Some income is exempt from wage garnishment. If you receive any of the following income, you may want to file a claim of exemption: 

• Social Security benefits;

• Public assistance benefits;

• Veterans benefits;

• Unemployment or workers’ compensation;

• Insurance proceeds or benefits; and/or

• Retirement or pension proceeds.

Step 5: The garnishment begins.

Wage garnishment will begin after objections and exemptions are heard. The judge hears both sides and then decides on whether objections and exemptions are valid. If the court decides in the creditor’s favor, your employer will withhold a portion of your paycheck and send that to the creditor. Once the debt is fully paid off the judgment creditor must prepare and file paperwork to stop the garnishment process.

How Much of My Paycheck Can Be Taken by Wage Garnishment?

Federal law limits the amount of money that can be garnished from your earnings. Only your disposable income can be garnished. Your disposable income is what remains after taxes, Social Security, Medicare, and unemployment insurance are taken from your paycheck. 

The amount of your wages that can be taken each week is limited by New Mexico state law and by federal laws. Regardless of how much a creditor can take in a given pay period, the total amount they garnish can’t be more than the amount in the judgment plus any fees, costs, or interests approved by the court. 

When it comes to how much of your wages can be garnished each week, New Mexico has more favorable laws than some other states. It limits wage garnishment to either 25% of your disposable income or how much your weekly disposable earnings exceed 40 times the federal minimum wage, whichever is less. The federal minimum wage is currently $7.25, so 40 times that is $290. This means if you make $290 or less per week, your wages can’t be garnished. 

How To Stop a Garnishment in New Mexico

There are two main ways to stop a garnishment: You can either pay off the debt or get it discharged in bankruptcy. 

If you’re behind on repaying multiple debts and feel like you can’t catch up, you may want to hit the reset button. Filing for bankruptcy can help you do this. Once you file, the court issues an automatic stay. This stops all collection activities, including wage garnishment, while your bankruptcy case is pending. Bankruptcy can also help you get your debts discharged, which can eliminate a wage garnishment for good. New Mexico’s bankruptcy exemptions will even allow you to protect certain assets like your home.

If you are considering filing bankruptcy, you can use Upsolve’s free online tool to file Chapter 7 bankruptcy without an attorney. If your case is more complicated or you just want help, you can schedule a free consultation with a bankruptcy attorney to figure out a game plan.

Are There Any Resources for People Facing Wage Garnishment in New Mexico?

New Mexico has several nonprofit legal aid organizations and other resources that can help if you’re facing wage garnishment.

• New Mexico Court Self-Help Center

• Metropolitan Court Information on Wage Garnishment

• New Mexico Legal Aid

• Upsolve’s list of legal aid organizations in New Mexico