Filing for bankruptcy doesn’t have to be scary and confusing. We provide helpful tips and resources to help you file Chapter 7 bankruptcy in your state without a lawyer.
Written by Attorney Andrea Wimmer.
Updated March 23, 2022
While 2021 was a better year financially than 2020 for many New Mexico residents, over 1,200 Chapter 7 bankruptcy cases were filed in New Mexico in 2021 alone. Some of these cases arose from the fallout of the COVID-19 pandemic. Others can be attributed to medical problems, significant unexpected expenses such as car repairs, the death of a loved one, job or hour loss, wage reductions, or money mismanagement. Financial dire straits can happen to nearly anyone. In fact, in 2018, it happened to Kachina Lodge Resort Hotel in Taos and the Roman Catholic Church of the Archdiocese of Santa Fe. Both turned to bankruptcy for a fresh start.
What matters more than the fact that you’re having financial difficulties is that you make a plan to deal with them. There are many options available for debt relief. For many, the most logical choice is to file Chapter 7 bankruptcy. If your financial situation is holding you back from filing, you may be relieved to find out that you might be able to file bankruptcy for free or for minimal cost.
How To File Bankruptcy in New Mexico for Free
Some debtors shy away from bankruptcy, thinking they can’t afford it. While it’s true that bankruptcy attorneys cost a lot, you can file without one. And you have options for how to pay the $338 filing fee for a Chapter 7 bankruptcy case.
- Collect Your New Mexico Bankruptcy Documents
- Take a Credit Counseling Course
- Complete the Bankruptcy Forms
- Get Your Filing Fee
- Print Your Bankruptcy Forms
- File Your Forms With the New Mexico Bankruptcy Court
- Mail Documents to Your Trustee
- Take a Debtor Education Course
- Attend Your 341 Meeting
- Dealing with Your Car
Collect Your New Mexico Bankruptcy Documents
Filing a bankruptcy petition is a process that starts with collecting documents and information. The U.S Bankruptcy Code is a federal law. It requires you to complete multiple forms to verify your eligibility for bankruptcy. You’ll need the past two years of your tax returns and pay stubs for the last 60 days before filing. These must be included with your bankruptcy petition.
For help completing the Chapter 7 forms, you should reference:
Bank statements from the last 6–12 months,
Bills and statements from creditors,
Correspondence from third-party debt collectors, and
A recent credit report. You’re entitled to receive a free one from each credit bureau once every 12 months.
If you file your Chapter 7 case using Upsolve’s filling tool, we’ll provide you with a current credit report.
Take a Credit Counseling Course
Bankruptcy law states that you must take a credit counseling course before you’re eligible to file your Chapter 7 bankruptcy. The goal of the course is to help you understand your options to deal with your debts and to be sure Chapter 7 is right for you. You can take the course from the comfort of your own home or anywhere you choose, as most are offered online.
There is a fee to take the course, but you can apply for a waiver. Be aware that the course you take must be approved for New Mexico filers, and you must complete it within 180 days before you file. When you file your paperwork with the court, be sure to bring your certificate of completion as proof that you took the class. Without this certificate, the court could delay or dismiss your case.
Complete the Bankruptcy Forms
No one else can take the credit counseling course for you. However, you can designate someone to complete your Chapter 7 forms. Should you decide to file with help from a bankruptcy attorney, their office will get the necessary information from your paperwork or from you to complete the forms. If you’re eligible to use Upsolve’s filing tool for your Chapter 7 case, you’ll complete an online questionnaire, and our software will use your responses to populate your forms.
Federal bankruptcy forms are the same for all filers, no matter which state they file in. If you’ll be completing your forms independently, you can access them online for free as fillable PDFs.
Get Your Filing Fee
You have three options for paying your filing fee:
Pay the $338 fee when you file your petition.
Pay a down payment (as determined by the local bankruptcy court) and apply for an installment plan.
Apply for a fee waiver if you make less than 150% of the federal poverty level (refer to the New Mexico Fee Waiver Eligibility chart below).
Some people need the protection offered by the automatic stay right away to help prevent vehicle repossession, property foreclosure, and wage garnishment. If this applies to you and you can’t pay the entire fee right away, you can ask the court to let you pay the fee in installments. If you can afford to pay the entire fee upfront it’s best to do so to avoid having your case dismissed for not making one of your installment payments.
Print Your Bankruptcy Forms
If you decide to file with a bankruptcy attorney, they’ll take care of your forms for you. If you’re filing through Upsolve, you’ll be sent an organized PDF download with everything you need in it. The packet will also notate where you need to sign on the signature pages. Although not all of the forms require signatures, you must sign those that do.
Print at least two copies (one to file and one to keep for your records) of your bankruptcy forms on regular 8.5" x 11" white paper with black ink. Don’t print them double-sided, or the court won’t accept them. It’s helpful to use a checklist to ensure you’re printing every form and document required, especially if you are printing out sections individually.
File Your Forms With the New Mexico Bankruptcy Court
In New Mexico, only bankruptcy lawyers can use the Electronic Court Filing System (ECF) to file petitions. However, there is an online (eSR) system that filers can use to prepare and submit their Chapter 7 bankruptcy case petition, schedules, and statements electronically. Then you’ll need to go to the courthouse in person to submit (or mail) your filing fee, signature pages, and other required forms.
Once the Clerk's Office has everything, they can electronically open your case using the forms you completed online. If you prefer not to use the partial-electronic option, you can still complete everything at the courthouse or by mail.
To avoid any delays in your case, you may want to file your petition in person, as the clerk can help ensure you have all of your paperwork and documents and you’ve completed them correctly. Keep in mind that with the COVID-19 pandemic, court hours and filing methods can change.
Mail Documents to Your Trustee
The New Mexico bankruptcy court appoints a trustee to each bankruptcy case. The bankruptcy trustee doesn’t represent you and can’t give legal advice. Rather, they’re an independent party to your Chapter 7 case who ensures that you’ve completed your forms correctly and provided all necessary documentation.
Your bankruptcy trustee needs a copy of your bank statement that covers the date you filed your petition and your two most recent federal income tax returns. It’s your responsibility to ensure they have these documents at least seven days before your 341 meeting. (More on this soon.) The trustee may also contact you to ask for additional documentation or paperwork. If you don’t comply with their requests, your case could be delayed or even dismissed.
Take a Debtor Education Course
The first course you take — the credit counseling course — makes you eligible to file your bankruptcy case. The second course you’ll need to take is a debtor education course. It makes you eligible for a discharge. This money management course is your ticket to a discharge and it teaches you how to manage your money more effectively so that you can get the full benefit from your fresh start.
Be sure to take a state-approved course. You or the course provider need to ensure your course completion certificate is submitted to the court no later than 60 days after your meeting of creditors.
Attend Your 341 Meeting
After you file your bankruptcy petition, the court schedules a 341 meeting, or meeting of creditors, to occur within the next several weeks. You and your trustee are required to be at the meeting. Any of your creditors can come and ask questions about your petition, although it’s unusual.
You may feel anxious or overwhelmed, but you have nothing to worry about as long as you’re prepared and have done what the trustee has asked you to do. At the beginning of the meeting, the trustee will place you under oath and verify your identity, including your Social Security number. You’ll be recorded, so speak loudly and clearly. The trustee will ask you questions about your bankruptcy petition and your financial situation. The meeting typically only lasts about five to 10 minutes. Then you can move on to the next steps in the Chapter 7 bankruptcy process.
Dealing with Your Car
If you own your car free and clear, you can keep it if its value is less than the applicable exemption limits. The motor vehicle exemption limit for single filers is $4,000 under both New Mexico’s state exemptions and the federal bankruptcy exemptions. Depending on which exemptions you choose, you can combine the vehicle exemption with the personal property exemption and/or wildcard exemption to protect more of your car’s value. (More about exemptions later.)
If you finance your vehicle, it’s considered a secured debt, and you have three different options for handling it in your bankruptcy:
Redeem the vehicle by paying the creditor the remainder of the loan or what the car is currently worth, whichever is less. If you do this, you get to keep the car, and the rest of the loan is treated as a dischargeable debt. If you have enough money to pay to redeem your vehicle and want to keep it, this is an excellent option. You won’t have a monthly car payment and you aren’t stuck with an underwater loan.
Surrender the vehicle back to the lender and have your car loan debt discharged with your bankruptcy.
Keep your car and reaffirm the debt, which requires you to be current on your loan and stay current. Once it’s reaffirmed, the debt is treated as if it were never in bankruptcy. So your lender will report your payments to the credit bureaus and can take future collection actions according to your contract.
If you’re currently leasing a vehicle, you can assume or reject the lease. To assume it, you must be current on payments and continue making payments according to the lease agreement. You have 45 days after filing your bankruptcy to reject your vehicle lease. If you do, you’re required to surrender the vehicle to the lessor. You won’t be accountable for any more payments.
Even if you end up not keeping your car, you should know that you can get a car after your bankruptcy discharge.
New Mexico Bankruptcy Means Test
The means test determines if you can file Chapter 7. The first part of this test compares your income with the median income for a similar size household in New Mexico. If your income is less, you pass the means test. If your income is more than the median income, you’ll move on to part two of the New Mexico means test, which looks at your expenses and disposable income.
If you have enough disposable income to pay back at least 25% of your debts, you won’t qualify for Chapter 7 bankruptcy. However, you could be eligible for Chapter 13 bankruptcy. Chapter 7 and Chapter 13 are both consumer bankruptcy options. Unlike Chapter 7, a Chapter 13 plan includes a repayment plan over 3-5 years.
Data on Median income levels for New Mexico
New Mexico Median Income Standards for Means Test for Cases Filed In 2024
Data on Poverty levels for New Mexico
New Mexico Fee Waiver Eligibility for Cases Filed In 2024
Eligible for fee waiver when under 150% the poverty level.
|State Poverty Level
|Fee Waiver Limit (150% PL)
New Mexico Bankruptcy Forms
Chapter 7 bankruptcy petitions in New Mexico are mostly comprised of national forms. Though the court has local forms unique to the Land of Enchantment, none are required to start your Chapter 7 case.
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New Mexico Districts & Filing Requirements
As a state with a smaller population, New Mexico only has one bankruptcy district. As an unrepresented ("pro se") filer, you can pay the filing fee with either a cashier's check or money order made payable to "Clerk, U.S. Bankruptcy Court." You can also pay using cash in the exact amount. You can file your case by mail or at the courthouse in Albuquerque. Be sure to check with the court directly for updated COVID-19 court information before heading to the courthouse.
New Mexico Bankruptcy Exemptions
When you file Chapter 7 bankruptcy in New Mexico, everything you own is considered an asset. In theory, your trustee can sell any assets that aren’t protected by an exemption. But most Chapter 7 cases are no-asset cases, meaning that filers get to keep all their property.
If you’ve lived in the Land of Enchantment for at least two years before you file your New Mexico bankruptcy case, you can choose to use either the federal exemptions or the New Mexico bankruptcy exemptions. You’ll want to consider what property you own and want to protect when choosing which set of exemptions to use.
For example, many homeowners choose to use the state exemptions because they’re more generous. The federal homestead exemption only protects $25,150 of your equity in the home. New Mexico’s homestead exemption protects $60,000 for single filers and double that for those filing jointly.
New Mexico Bankruptcy Lawyer Cost
There’s nothing wrong with hiring an attorney if you feel like you need one and can afford it. Most offer free initial consultations and provide bankruptcy services at a flat fee. The price of a New Mexico Chapter 7 bankruptcy attorney ranges from $1,100 to $1,200. If your bankruptcy case is complex, you can expect to pay a fee on the higher end of this range. If you decide you need an attorney, remember that cost isn’t everything. You need an effective attorney you can trust.
New Mexico Legal Aid Organizations
If you want legal advice or help, but you can’t afford to hire a bankruptcy attorney, you can look into legal aid. Many New Mexico organizations provide free or low-cost legal aid to those who can’t afford their own legal help. If you aren’t sure if you want to file Chapter 7 on your own, now is the time to explore other viable options.
New Mexico Court Locations
Pete V. Domenici United States Courthouse
333 Lomas Boulevard Albuquerque, NM 87102
New Mexico Judges
New Mexico Bankruptcy Judges
|District of New Mexico
|Hon. Robert H. Jacobvitz
|District of New Mexico
|Hon. David T. Thuma
New Mexico Trustees
New Mexico Trustees
|Clarke C. Coll
|Yvette J. Gonzales
|Edward A. Mazel
|Philip J. Montoya