Bankruptcy can be a means to obtain relief from creditor lawsuits and suffocating medical bills, as well as possibly prevent foreclosure. Federal legislation regulating bankruptcy are found in the Bankruptcy Code located in Title 11 of the United States Code.
For individuals seeking bankruptcy relief, there are two main chapters from which to choose. A Chapter 7 bankruptcy offers relief to those consumers with large unsecured debt but allows them to usually retain most, if not all, of their personal property including their home. Chapter 13 provides a repayment plan to creditors over a designated period.
For consumers living in New Mexico, you should be aware of the particular laws and other facts that apply to you.
Where to File
New Mexico has one district where you can file your bankruptcy petition. The office where you file is located in the Dennis Chavez Federal Building and US Courthouse at 500 Gold Avenue SW, 10th Floor, in Albuquerque. Go to the court's website for more information on forms and local rules.
Eligibility Requirements to File Chapter 7
Whether you can file for a Chapter 7 bankruptcy depends on your average monthly income. If it is less than New Mexico's median income, then you are eligible to file Chapter 7.
In the event your average monthly income is equal to or greater than New Mexico's median income, you cannot file Chapter 7 unless you can pass a means test.
Does a Chapter 13 Plan Last Long?
Your average monthly income will determine how long your Chapter 13 repayment plan will last. If it is less than New Mexico's median income, then your Chapter 13 Plan cannot exceed 36 months unless there is good cause for extending it.
Should your average monthly income be greater than or equal to New Mexico's median income, then your Chapter 13 Plan typically must be 60 months in length.
Can I Keep My Property?
In bankruptcy, you are able to keep certain property if it is exempt. This means that you can protect those exempt assets from the claims of creditors under New Mexico law. New Mexico has adopted its own exemptions, but allows you to choose between its exemptions and those listed under federal law. You cannot mix and match exemptions, however.
Federal and state exemptions include the following items of property:
- Homestead equity
- Household furniture, clothing and jewelry
- Engagement and wedding rings
- One vehicle
- Burial plot
- Tax exempt retirement accounts
- Unemployment, workers compensation and welfare benefits
- Life insurance proceeds
- Certain amount of wages
- Wildcard for any property
New Mexico's homestead exemption of $60,000 is far more than the federal limit of 21,625, or $43,250 for married, joint filers. It also has a motor vehicle exemption of $4,000 as compared to the federal exemption of $3,450. There are differences in the value of other exemptions as well.
Consult a New Mexico Personal Bankruptcy Attorney
The bankruptcy laws in New Mexico are complicated, and trying to navigate through the rules and laws yourself may not be in your best interests. For specific legal information, please contact a New Mexico bankruptcy attorney.