Complete The Bankruptcy Forms
While you are the only one that can take the credit counseling course to make you eligible to file your Chapter 7 bankruptcy in New Mexico, you can delegate completing the forms to either a lawyer or, if you are eligible to do so, Upsolve. If you have someone helping you with this step, you are still the one that has to provide the information to be disclosed as part of your New Mexico bankruptcy case. Upsolve will have to provide some of your bankruptcy documents and answer a number of questions through our online portal. If you hire a lawyer, their office will collect the necessary information and documents form you in whatever format works best for them before completing the forms. Of course, filing bankruptcy in New Mexico does not require you to hire a lawyer you can also complete the bankruptcy forms on your own. All of them are available for free as fillable PDF files online, though the first two documents you should probably download and print page one of this checklist listing all the forms you will have to complete for your Chapter 7 bankruptcy in New Mexico and this instruction manual on how to complete them.
Sales Debt And Bankruptcy
You may have experienced a financial hardship and now are deciding whether to file bankruptcy in New Mexico. We are sorry to hear that you are needing to read this article right now, but our goal is to explain how everything works, so you can decide whether bankruptcy is right for you. Heres what well cover:
New Mexico Bankruptcy Process How To File Bankruptcy In New Mexico
2005 Bankruptcy Act Credit Counseling The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy on or after October 17, 2005, to undergo credit counseling within six months before filing for bankruptcy relief and to complete a financial management instructional course after filing bankruptcy.
2005 Bankruptcy Act Means TestUnder the 2005 Bankruptcy Act your income and expenses will be analyzed to determine if you qualify to file a Chapter 7 or if you must file Chapter 13. To apply the means test, the courts will look at the your average income for the 6 months prior to filing and compare it to the median income for New Mexico. If the income is below the median, then you may choose Chapter 7. If your income exceeds the median, the remaining parts of the means test will be applied to determine if you can file Chapter 7 or if you must file Chapter 13.
Gathering PaperworkTo begin the bankruptcy process you must itemize your current income sources major financial transactions for the last two years monthly living expenses debts and property . You should also collect your tax returns for the last two years, deeds to any real estate you own, your car titles, and the documents for any loans you may have.
The cost for filing a Chapter 7 bankruptcy is $306. This fee may not be waived but you may be able to pay it in installments. The fee of $281 for a Chapter 13 bankruptcy cannot be waived.
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Take Credit Counseling Course
You have to take two mandatory credit counseling courses to complete your Chapter 7 bankruptcy. The Chapter 7 trustee may request the certificate of completion in the meeting of creditors. The first course is a pre-bankruptcy course, and the second is the pre-discharge course.
If you are filing with an attorney, your attorney may have suggestions for both the credit counseling and debt education course. If not, you can see the list of approved credit counseling courses in New Mexico.
Will The Court Staff Explain The Filing Procedure To Me
To some extent, yes, but it depends on the court.
Some courts are quite willing to help non-attorneys and will give you a packet of information that explains the filing procedure in detail, and in plain English.
Other courts are quite hostile to debtors attempting to represent themselves and will make it a point not to help you at all.
The difference between courts can be dramatic, as evidenced by the wide range of difference between various court websites.
See the “court ratings” section on this page. The list of courts that “get it” provide helpful information to non attorneys.
If the staff at your court tells you that they can’t offer you any help, you may wish to refer them to the websites of these other bankruptcy courts that manage to provide ample help the general public.
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Preventing Bankruptcy Exemption Problems
Exempt your property carefully. The bankruptcy trusteethe court-appointed official assigned to manage your casewill review the exemptions. A trustee who disagrees with your exemptions will likely try to resolve the issue informally. If unsuccessful, the trustee will file an objection with the bankruptcy court, and the judge will decide whether you can keep the property.
Example. Mason owns a rare, classic car worth $15,000, but the state vehicle exemption doesn’t cover it entirely. Believing that the car qualifies as artat least in his mindMason exempts it using his state’s unlimited artwork exemption. The trustee disagrees with Mason’s characterization and files an objection with the court. The judge will likely decide the vehicle doesn’t qualify as art.
Purposefully making inaccurate statements could be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.
Attend A Creditors Meeting
Several weeks after you file for bankruptcy, you will be required to attend a 341 hearing, which is also called a “creditors meeting.” The bankruptcy trustee assigned to your case will lead the meeting and may ask you questions about the information you’ve provided on your bankruptcy forms. Creditors may also show up at the hearing to ask you questions.
The bankruptcy trustee will tell you exactly what to bring to the meeting, but you should be prepared to bring the following:
- pay stubs
- tax returns for the past few years
- bank statements
- property ownership documents, like deeds and the pink slip for your car, and
- copies of mortgage documents.
The book How to File for Chapter 7 Bankruptcy provides detailed information about what to expect at a 341 hearing.
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Wage Earners Bankruptcy Overview
Formally known as Chapter 13 bankruptcy, a wage earners plan will allow you to restructure your financial obligations to pay back your creditors over 3-5 years. Unlike in a Chapter 7 bankruptcy, you are not aiming to have all your debt discharged although some may be at the completion of your payment plan. Instead, youre expected to come up with a fixed payment plan that joins your debts into a set of monthly payments.
The name wage earners plan is based on the idea that this type of bankruptcy is geared towards individuals who have regular income as a means of paying back some or all of their debt, given enough time and leniency. This does not, however, mean that only those with a standard job are eligible. Small business owners and self-employed individuals are also able to file Chapter 13 bankruptcy.
In order to be eligible for Chapter 13 bankruptcy, your unsecured debt must not exceed $394,725, and your secured debts must not exceed $1,184,200. Many of the requirements for Chapter 13 bankruptcy are the same as Chapter 7. You will be expected to disclose all assets and income, as well as go through credit counseling with a qualified agency within 180 days of filing. You will need to provide a list of all debts you owe and their associated creditors and provide a list of all your property and assets. Unique to Chapter 13, however, is the required repayment plan.
Disadvantages Of Chapter 7 Bankruptcy
- You must meet income requirements set by the New Mexico means test in order to file.
- Your home can still be foreclosed upon, and your automobile can still be repossessed if you are behind on your payments and have no agreement in place with these creditors, as Chapter 7 discharge does not prevent repossession for secured debts with an outstanding lien.
- You may be forced to sell your home or your car if either is not adequately covered by the New Mexico bankruptcy exemptions.
- If you want to keep your home or car, you will need to figure out a way to pay off unpaid balances on these loans in order to defer foreclosure and repossession.
- Any non-secured property not covered by these exemptions can be liquidated and used to pay back creditors.
- Anyone who has cosigned on your loan can be stuck with the debt unless they also file for bankruptcy.
- Can only file Chapter 7 if its been eight years since previously filing and six years since filing Chapter 13
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Qualifying For Bankruptcy In New Mexico
If you’ve never filed for bankruptcy before, you’ll meet the initial requirement. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.
You’ll also need to meet specific chapter qualifications.
You’ll qualify for Chapter 7 bankruptcy if your family’s gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website .
Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.
Qualifying for Chapter 13 can be an expensive proposition because the extra benefits come at a hefty price, and many people can’t afford the monthly payment. To qualify, you’ll pay the larger of:
Rebuild Your Credit After Filing Bankruptcy
Unfortunately, Chapter 7 bankruptcy can negatively impact your credit and Chapter 13 can negatively impact your credit. That said, you have an opportunity to rebuild your credit shortly after bankruptcy. To assist, you can use our free credit rebuilding portal designed to help you increase your credit score by 100 points in less than 6 months.
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Less Common Types Of Bankruptcy
Chapter 9 Bankruptcy
Cities or towns may file for Chapter 9 bankruptcy if they are overwhelmed by debt. It allows municipalities to develop a plan for handling debts while holding creditors at bay.
Chapter 11 Bankruptcy
- Chapter 11, often called reorganization bankruptcy is usually used by businesses.
- It allows a business to work out a court-supervised plan to pay back creditors while keeping its doors open. We mostly hear about big businesses filing for Chapter 11, but small businesses or even individuals can use it, too.
- The trouble is that Chapter 11 is usually too expensive for smaller undertakings and anyone other than the most wealthy individuals, because it entails lots of meetings, court hearings, and big bills from bankruptcy lawyers.
Chapter 12 Bankruptcy
- This type of bankruptcy is a lot like Chapter 13 except its available only for family farmers and fishermen.
- Its specially designed to help farmers and fishermen keep their livelihoods while paying off debts under a court-approved plan.
- Chapter 12 has a higher debt threshold and more options to protect property than Chapter 13.
Chapter 15 Bankruptcy
- Chapter 15 is for people or organizations that have debts and property in the United States and another country.
- Under this chapter, federal bankruptcy courts can more easily limit their involvement in the case to just the property and people in the United States.
Us Trustee Program Extends Telephonic Or Video Section 341 Meetings
The U.S. Trustee Program has extended the requirement that section 341 meetings be conducted by telephone or video appearance to all cases filed during the period of the Presidentâs âProclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease Outbreakâ issued March 13, 2020, and ending on the date that is 60 days after such declaration terminates. However, the U.S. Trustee may approve a request by a trustee in a particular case to continue the section 341 meeting to an in-person meeting in a manner that complies with local public health guidance, if the U.S. Trustee determines that an in-person examination of the debtor is required to ensure the completeness of the meeting or the protection of estate property. This policy may be revised at the discretion of the Director of the United States Trustee Program.
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Estimate Whether You Will Lose Any Property
As you can imagine, many people want to keep their home, car, cash, etc. when filing bankruptcy.
You need to understand the bankruptcy exemptions in New Mexico. The bankruptcy exemptions are complex because some states allow you to choose between state and federal exemptions when filing bankruptcy. For example, check out the New Mexico homestead exemption.
As such, we created this New Mexico bankruptcy exemptions calculator to simplify the information. This free calculator helps you estimate whether your belongings are at risk when filing bankruptcy in New Mexico.
Complete State Of New Mexico Bankruptcy Exemptions Laws Which Protect A Debtors Property When Personal Bankruptcy Is Filed
42-10-9. Homestead exemption.
35-12-7. Garnishment exemptions.
A. Exempt from garnishment with respect to the enforcement of an order or decree for child support is fifty percent of the defendants disposable earnings for any pay period. Exempt from garnishment in all other situations is the greater of the following portions of the defendants disposable earnings:
B. B. As used in this section:
C. The maximum amount which may be taken from a spouses disposable earnings under both the garnishment procedure and the wage deduction procedure for the enforcement of child support is fifty percent of the spouses disposable earnings.
42-10-1. Exemptions of married persons or heads of households. 42-10-2. Exemptions of persons who support only themselves. 42-10-3. 42-10-4. 42-10-5. 42-10-10. Exemption in lieu of homestead. 22-11-42. Nonassignability division of funds as community property child support obligations. 27-2-21. Assistance not assignable. 31-22-15. Exemption from execution. 48-2-15.
51-1-37. Protection of rights and benefits.
52-1-52. Exemption from creditors.
52-3-37. Compensation exempt from execution. 53-4-28. Share and membership certificates, attachment. 53-10-2. 54-1A-501. Partner not co-owner of partnership property. 59A-44-18. Benefits not attachable. 70-4-12. Materials exempt from attachment.
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Advantages Of Chapter 7 Bankruptcy
- There is no minimum debt required to file.
- You get to start from scratch with all unsecured debts and some secured debts discharged.
- You have protection against wage garnishment and other collection tactics employed by creditors as soon as you file.
- After a bankruptcy is filed, property and wages acquired can not be taken by creditors or the court.
- You will usually clear your unsecured debt in under six months
New Mexico Bankruptcy Exemptions
Even though everything you own is considered an asset when your Chapter 7 bankruptcy in New Mexico is filed, the trustee can only reach assets that are not protected by one of the available exemptions. If you have lived in the Land of Enchantment at least two years before your New Mexico bankruptcy case is filed, you can choose between the federal bankruptcy exemptions and the New Mexico bankruptcy exemptions. Certain federal nonbankruptcy exemptions may be available even if you choose the New Mexico bankruptcy exemptions, but you cannot use any of the federal bankruptcy exemptions if you do that.
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Learn The Basics Of Bankruptcy
Bankruptcy is a legal proceeding created to give people a fresh start after financial disasters. If you’ve explored your alternatives and can’t see a way out from under your debt, bankruptcy may be the right solution for you.
There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 can wipe out most of your debts in a matter of months in exchange for giving up all of your property that the bankruptcy law does not protect.
Chapter 13 takes three to five years. During that time, you repay some or all of your debts under a payment plan approved by the bankruptcy court. Its often used by people who are behind on mortgage payments and want to use Chapter 13 to catch up. Most folks who file for bankruptcy prefer to file for Chapter 7 if they qualify, because you can get out from under lots of debt in a matter of a few months.
Do I Qualify For Bankruptcy In Nm
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The cost for filing a Chapter 7 bankruptcy is $306. This fee may not be waived but you may be able to pay it in installments. The fee of $281 for a Chapter 13 bankruptcy cannot be waived. If you are filing a Chapter 13 bankruptcy, a proposed repayment plan must also be submitted.
Subsequently, question is, what are the federal exemptions for Chapter 7? Current Amounts for Federal Bankruptcy Exemptions
- Homestead. 522, – Real property, including mobile homes and co-ops, or burial plots up to $25,150.
- Personal Property. 522 – Motor vehicle up to $4,000.
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How to File Bankruptcy in New Mexico for Free
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