How to File Bankruptcy in New Mexico
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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 credit.
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 under oath.
Chapter 7
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.
Chapter 13
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 non-dischargeable.
Eligibility
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.