Bankruptcy in New Mexico
Deciding to file bankruptcy is a major decision that can not be undone.
In New Mexico bankruptcy will stay on your credit report for ten years.
During this time it may be more difficult or more expensive to get
Though it is not required to consult a lawyer before filing, it is
recommended. Many lawyers offer free consultations that may be helpful
in determining if bankruptcy is in your best interests. Please remember
that a bankruptcy petition preparer is not a lawyer and cannot provide
you legal advice.
There are two different types of bankruptcy in New Mexico; Chapter 7
and Chapter 13. Both will require you to list all of your debts and all
of your property in addition to attending a meeting to answer questions
A chapter 7 bankruptcy is a straight liquidation of your estate. A
trustee will sell which ever property you do not keep, and then
distribute the money to your creditors. You will be able to keep most
of your property in this case. Things such as clothing, vehicles and
your home can not be taken as long as you continue to pay for these
items. The case is then closed. This is the most straightforward and
simple type of bankruptcy available.
In Chapter 13 bankruptcy the trustee does not sell any of your
property. You will be required to repay your creditors over a three to
five year period with any disposable income you may have (money left
over after paying for shelter, utilities and food). You will not be
able to make purchases using credit while under chapter 13 bankruptcy
without a judge's permission.
To be eligible for chapter 13 bankruptcy you must have a regular income
and no more than $336,900 in unsecured debt (credit card, utility
bills, etc). You can also have no more than $1,010,650 in secured debts
(mortgage, car loans, and other secured loans.) If you are unsure
whether your debts are secured or unsecured contact your creditors.
What Debts Are Erased?
At the end of a bankruptcy hearing you are granted a discharge for all
non-dischargeable debts. Non-dischargeable debts include some types of
taxes, debts from criminal charges and student loans. Child support and
alimony cannot be discharged and you must continue to make these
payments throughout the bankruptcy proceedings. Creditors have the
option to petition the court in an attempt to have their debt declared
If the judge finds that you are able to pay your creditors your case
will be dismissed and you will remain liable for all debt incurred. To
find out if you are eligible for bankruptcy you should contact a lawyer.
How Long Does The Process Take?
Approximately 45 days after a petition is filed you will be required to
attend a meeting with a trustee and your creditors. In chapter 13
Bankruptcy you must begin making payments 30 days after your case
begins. The total amount of time your bankruptcy proceedings will take
depends on your creditors. If they choose to dispute your claim or have
their debts declared non-dischargeable your case will be delayed.