Filing Bankruptcy In New Mexico

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Filing bankruptcy in New Mexico becomes necessary when the debtor cannot meet pay the monthly bills, barely makes more than the minimum payments, or experiences a financial challenge that cannot be supported by the budget.  This is typically in conjunction with creditor liens, harassment, and a number of bills in default.  Bankruptcy is the means to restructure payments or have debts, like credit card balances, expunged.


New Mexico Bankruptcy Topics

  1. Personal Bankruptcy Options
  2. Keep Your Home: Bankruptcy and Foreclosure
  3. New Mexico Exemptions to Bankruptcy Liquidation
  4. Options for Filing Bankruptcy
  5. Local Bankruptcy Courts and Trustees

Options for Personal Bankruptcy in New Mexico

The U.S. bankruptcy code Chapter 11 allows debtors to file Chapter 7 or Chapter 13 bankruptcy, depending on personal circumstances and financial needs.

Chapter 7 Bankruptcy

Also known as, straight bankruptcy, Chapter 7 is bankruptcy for the debtors needing a fresh financial start.  Following a means test to determine eligibility, a trustee of the court can seize all property that is not exempt from the court, resell it, and use the proceeds to satisfy a portion of the overall debt.  Although debtors will still have obligations for child support, student loans, and other debts that do not qualify for bankruptcy, all other debts are forgiven.  According to New Mexico statistics, the average single wage earner makes $35,913, a two-person household brings in $48,708, and a family of three has $53,018.

Chapter 13 Bankruptcy

For the wage earner that has unexpected bills, a change in jobs, or a pay cut, Chapter 13 may be a possible reorganization option.  However, rather than lose their home or other assets, the debtor needs to have payments restructured to a more affordable amount.  In this case, Chapter 13 is a means of saving the small family business, house, car, or other belongs.  But, the debtor cannot have more than $1,010,650 in secured debts or $336,900 in unsecured debts in order to qualify for a new payment plan set up by the court.

Filing Bankruptcy during Foreclosure

Debtors should not wait until foreclosure proceedings are initiated, before filing for bankruptcy.  Once the court receives the paperwork, creditor harassment and notification ceases, until the court makes financial determinations.  Unfortunately, if foreclosure is in process, the lien holder can ask the court to lift the stay on the property, so it can be resold to satisfy the debt.  Therefore, it is important to seek legal advice before actions are taken to seize the property.

New Mexico Bankruptcy Exemptions

In the state of New Mexico, specific assets are exempt, if the debtor files a request with the court.  The list includes, but is not limited to the items in the following chart:

Type of Asset(s)

Details on Applicable Exemption(s)

Homestead

Married or widowed, if supporting another, $30,000 can be claimed, 2 owners can double the amount of the exemption.

Insurance

Benevolent benefits of no more than $5000, fraternity benefits, life, health, accident or annuity benefits-for New Mexico residents.

Misc.

Partnership assets, ownership interest in a business that is still unincorporated

Pensions

Retirement and pensions, public school employees

Personal Property

Building materials, clothing, membership fees for cooperative association, books, furniture and health equipment, jewellery worth more no more than $2500,  materials for a drillers occupation, a vehicle worth $4000 or less

Public Benefits

Unemployment or workmen’s comp, AFDC, crime victim payments granted before July 1, 1993, disease and disability benefits from an occupation

Wages

At least 75% of unpaid wages

New Mexico Bankruptcy Court Filing Options

Use a Bankruptcy Lawyer

Need Bankruptcy Advice?

Using a bankruptcy lawyer is highly recommended.  During stressful court proceedings, the legal representative makes sure that all appropriate paperwork and exemption requests have been filed.  He/she is there to answer important questions and provide the best legal advice for the debtor’s personal circumstances.

Use a Filing Service

Using a filing service to save money during bankruptcy proceedings is not a good idea.  Although the service files all of the appropriate paperwork, they are not responsible for mistakes or forgotten material.  No legal questions are answered, and no legal advice is available. 

File “Pro Se”

If debtors choose to represent themselves, they can file pro se. However, it is better to borrow the money and gain legal representation, to ensure that all of the proper paperwork is filed and all legal exemptions are taken.  During the court proceedings, the lawyer answers pertinent questions and offers sage legal advice.  Otherwise, the economical consequences can be devastating.

Courts and New Mexico Bankruptcy Trustee Information

New Mexico District Court Main Office

Pete V. Domenici United States
Courthouse, Suite 270
333 Lomas Boulevard, N.W.
Albuquerque, NM 87102  

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