New Mexico Bankruptcy
New Mexico Bankruptcy Law
Bankruptcy Code and Exemptions...
Although Federal Bankruptcy Code and U.S. Bankruptcy Laws apply to everyone, each state has its own Bankruptcy Code and Rules of Bankruptcy Property Exemption that apply specifically in that state.
New Mexico Bankruptcy Law
New Mexico Bankruptcy Law Means Testing Provisions...
Most New Mexico bankruptcy laws are well settled, yet new amendments recently added a layer of complexity to filing both Chapter 7 and Chapter 13. Discharges are likely in both types of cases, if qualified under new disposable income tests. The new "means testing" requirement does affect both chapters.
Debtors will no longer be qualified to file Chapter 7 if earning an income greater than the New Mexico median income for the state. Median income is a different standard than average income. Median is the income earned by the single person who is located exactly in the middle of a list of all income earners, whereas average is the total of all income divided by the number of persons used in the calculation. The difference in these two statistical calculations is that the median income will be lower in a state in which a few people earn a disproportionately high income compared to most other income earners.
In Chapter 13, debtors who earn more than the New Mexico median income level must file repayment plans lasting 5 years, unless all debts and claims owed can be repaid sooner.
New Mexico Bankruptcy Exemptions
New Mexico Exemptions Remain Generous...
The State of New Mexico bankruptcy exemptions are a precarious balance between below average state salaries and above average home prices. In response, the state Property Code allows residents to claim either the state homestead equity allowance of $30,000, or the Federal allowance of $18,500.
New Mexico state Property Code provides more beneficial options in most bankruptcy filing circumstances, and also exempts many forms of pensions and retirement accounts.
Common Mistakes to Avoid when Claiming Exemptions...
The number 1 mistake made when claiming exemption in the state of New Mexico, is the failure to disclose assets, which is also one of the most costly mistakes made by debtors. With even the best intentions and only committing a good faith error, creditors remain quick to allege fraud and seek dismissal.
Many ordinary household items have nominal resale value, and are therefore ignored by most interested parties. However, the omission of real estate, financial accounts, deposits, and cash equivalents quickly draws attention from the court and may result in sanctions.
Pre-Bankruptcy Planning and Preparation
Pre-bankruptcy planning is a delicate topic with many transactions prohibited, but with the assistance of a progressive bankruptcy attorney, other allowable exemptions may be identified.
In practice, most people who file for bankruptcy will actually improve their credit rating within 18 months or less. In fact, in a chapter 13 filing, credit will begin to improve once late payment reports stop, and secured loans and credit lines begin reflecting timely payments.
Overall, filing for bankruptcy can, for many Americans in many different circumstances, be an important and integral step toward financial recovery and new found fiscal stability. Ultimately, bankruptcy creates opportunities and improves net worth, so long as the decision to file was made wisely.
To learn more about New Mexico State Bankruptcy Exemptions, simply go to our U.S. Bankruptcy Exemptions page.
In most states you can legally protect your personal residence in a bankruptcy. The interesting thing is homeowners are treated differently from state to state.
Learn more about the Homestead Act and how it affects you.
New Mexico Bankruptcy Code
All New Mexico Bankruptcy cases are governed by Title 11 of the United States Bankruptcy Code, by U.S. Bankruptcy Rules, and by local New Mexico State Bankruptcy Rules promulgated by New Mexico court.
The US bankruptcy court websites generally have links to both, the Federal US Bankruptcy Rules and specific New Mexico Bankruptcy Code. Clerks in the bankruptcy courts will not give debtors, or even attorneys for debtors, legal advice, including advice about which bankruptcy rules apply to a given case.
Locate a US Bankruptcy Court in your federal judicial district.
Since US Bankruptcy Code and New Mexico Bankruptcy Rules are very technical, and since the case load in the US Bankruptcy Courts makes judges very unforgiving of mistakes or missed deadlines, it's highly recommended to seek the advice of an experienced New Mexico Bankruptcy Attorney and Certified Credit Counsellor.
The most recent Changes to the Bankruptcy Code and Bankruptcy Rules came about on April 20, 2005 as President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. This new Bankruptcy Law came into effect October 17, 2005.
Learn more about the 25 Most Recent Changes to Personal Bankruptcy Law and how they affect you.
