New Mexico Bankruptcy

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Summary

Although there is a filing fee due when a New Mexico bankruptcy case is first filed with the court, it is possible to file your case for free. If your income is less than 150% of the federal poverty guidelines and the court finds that you lack the ability to pay the fee even after filing Chapter 7 in New Mexico, your court filing fee may be waived.

Did you know that in 2018 alone a total of 3,234 New Mexico bankruptcy cases were filed? Did you also know that this number includes both the Kachina Lodge Resort Hotel in Taos, which filed Chapter 11 in May 2018 and the Roman Catholic Church of the Archdiocese of Santa Fe which filed its Chapter 11 case in December 2018? Even though the overall number of filings has decreased when compared to 2017, the fact still remains that folks and businesses in the Land of Enchantment are finding themselves with more debt than they can handle. Of course, these two cases are not representative of the vast majority of New Mexico bankruptcy cases, 88% of which are filed under Chapter 7. They do illustrate, however, that sometimes availing yourself of the protections afforded to you by the Bankruptcy Code is the best course of action. Of course, no one ever wants to file a Chapter 7 bankruptcy in New Mexico, and in fact a lot of people try very hard to avoid having to file. If you are in that position and are currently weighing your options, don't take any drastic measures such as liquidating your retirement account until you have researched all of your debt relief options. Remember, ultimately your responsibility runs to your family, not your creditors, and inadvertently setting yourself up for big tax bill at the end of the year just to pay off a portion of your debts with fully protected assets will not help you in the long run, and can actually cause more damage to your financial security in the short term.

How to File Bankruptcy in New Mexico for Free

Although there is a filing fee due when a New Mexico bankruptcy case is first filed with the court, it is possible to file your case for free. If your income is less than 150% of the federal poverty guidelines and the court finds that you lack the ability to pay the fee even after filing Chapter 7 in New Mexico, your court filing fee may be waived.


Collect Your New Mexico Bankruptcy Documents

While the information you provide to the court when you file your Chapter 7 bankruptcy in New Mexico is, for the most part, contained in the bankruptcy forms you will have to complete, there are certain supporting documents that will make completing these forms easier for you. You will need to collect each paycheck stub you have received in the 6 months before filing bankruptcy in New Mexico to properly calculate your income. Since your trustee may ask for some additional paycheck stubs for the pay periods immediately after your New Mexico bankruptcy case has been filed with the court, it's a good idea to keep track of all of them as you receive them. Since everyone filing Chapter 7 in New Mexico has to provide a copy of their most recent federal income tax return to their trustee, it's a good idea to pull that from your files now as well. Finally, in addition to gathering all bills, collection notices, and demand letters you have received in the 90 days before filing bankruptcy in New Mexico, it's a good idea to request a copy of your credit report from at least one of the three credit reporting agencies. You are entitled to a free report from each one of them every year and can make the request online in a matter of minutes.

Take Credit Counseling

Everyone filing bankruptcy in New Mexico must take a credit counseling course first. When Congress last amended the Bankruptcy Code, it added the requirement that everyone who wishes to obtain bankruptcy relief must complete this course in order to be eligible to be a debtor in bankruptcy. The purpose of the course is to educate folks filing bankruptcy in New Mexico on all debt relief options available to them before their bankruptcy case is commenced. While it must be completed before your Chapter 7 bankruptcy in New Mexico can be filed with the court, you can do so at any time in the 6 months preceding your filing date. In fact, the certificate of completion you will receive once done will be valid for 180 days. As long as you plan on filing bankruptcy in New Mexico in the 6 months after taking the course, you will meet this requirement. It is important, however, to make sure that the company you are planning on using to complete this course has in fact been approved to offer it to folks filing bankruptcy in New Mexico. This approval is issued by the Office of the United States Trustee, who maintains an up to date listing of all credit counseling providers approved for New Mexico bankruptcy cases on their website.

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.

Get Your Filing Fee

Only folks filing Chapter 7 in New Mexico who earn less than 150% of the federal poverty guidelines are eligible to apply for a fee waiver. Even then, if the court finds that you are able to pay the fee in installments after filing bankruptcy in New Mexico and stopping payments to unsecured creditors, the fee waiver will not be granted. The total fee for a Chapter 7 bankruptcy in New Mexico is $335. The court allows unrepresented ("pro se") debtors to pay the fee either in the form of a cashier's check or money order made payable to "Clerk, U.S. Bankruptcy Court" or in the form of cash in the exact amount. You can purchase a money order at any U.S. Post Office near you. If a creditor is garnishing your wages, or you can't wait to file your New Mexico bankruptcy case until you've had the chance to collect the full amount of the filing fee, you can apply to pay the fee in installments. This is a way to get your case filed and the protections of the automatic stay inherent in filing bankruptcy in New Mexico now, even though you can't pay the full fee upfront. If you do ask the court to pay your filing fee in installments, make sure you note all payment due dates and make your payments early so the court does not dismiss your New Mexico bankruptcy case because you forgot to make a payment.

As a debtor filing Chapter 7 in New Mexico, you have to sign all of the bankruptcy forms under penalty of perjury before they can be filed with the court. If a lawyer is helping you, their office will walk you through all of the documents and obtain the necessary signatures from you before filing everything electronically. If you completed the forms on your own, it's your job to make sure that this part of the process is done correctly, and all forms signed where indicated. It's best to make the checklist outlining all the forms needed when filing Chapter 7 in New Mexico first, so you can use it to keep track of everything else you print. This is especially important if you have all of the documents saved on your computer as individual files, as they all look very similar to each other. If you are working with Upsolve, this step in the process is as simple as printing the single PDF file containing all forms needed to file a Chapter 7 bankruptcy in New Mexico. Even though this is a legal proceeding, everything is printed on regular 8.5" x 11" white paper that any home or office printer can handle. Do not print the forms you plan on giving to the court double-sided as the clerk's office will not accept it. Since it's a good idea to have an exact copy of everything you are giving to the court for your New Mexico bankruptcy case as part of your personal records, it is recommended that you print a second set of everything (or make a copy of the signed originals) at this time.

Go to Court to File Your Forms

At this time, only lawyers filing New Mexico bankruptcy cases on behalf of their clients are able to do so using the court's electronic filing system. Everyone else has to either bring the documents to the court in person (or via courier) or submit everything needed to file a Chapter 7 bankruptcy in New Mexico to the court by mail. Since being there in person will give you the opportunity to correct any mistakes or update any information you may have missed and avoid a potentially unnecessary delay, it is best to head to the courthouse yourself if at all possible. The courthouse is located in Albuquerque and is open to the public Monday through Friday from 8:30 a.m. to 4:30 p.m. Keep in mind that filing bankruptcy in New Mexico is a federal proceeding and the courthouse is a federal building. Building security requires you to show a picture ID to the Marshals at the building entrance and to pass through a magnetometer on the way in to make sure you are not carrying any weapons, including knives or other sharp objects into the building. If you bring your copy of the documents that you are submitting to the court for your Chapter 7 bankruptcy in New Mexico, the clerk can stamp or endorse the first page with the details of your filing, such as the filing date and case number.

Mail Documents to Your Trustee

After your Chapter 7 bankruptcy in New Mexico has been filed, a Chapter 7 trustee will be appointed to administer, or handle, the case. The trustee's job is to act as an independent neutral in your case, though they are not truly neutral, instead acting on behalf of your unsecured creditors so you don't have to deal with each one of them individually. The Bankruptcy Code requires that everyone filing bankruptcy in New Mexico submit a redacted (blacked out) copy of their most recent federal income tax returns to their trustee at least 7 days before their creditors' meeting. Since the trustees are independent contractors for the United States Trustee, they have developed their own systems and processes for making sure that they are properly executing all of their duties. In light of that, it is possible that you receive a letter from your trustee shortly after filing Chapter 7 in New Mexico that contains a request to submit certain other documents to their office prior to your creditors' meeting. Even though the trustees don't represent the debtor in the case, they share the same goal of having each case proceed orderly and in accordance with applicable federal and state laws and procedures. If you do not cooperate with your trustee in the administration of your Chapter 7 bankruptcy in New Mexico, they do have the power to ask the court to either hold off on entering your discharge order or revoke it once it's been entered.

Take Bankruptcy Course 2

The discharge order is the primary benefit of filing Chapter 7 in New Mexico. It is the court order that tells all of your creditors that they are no longer allowed to ask you for payment ever again because you have been relieved from your obligation to pay your dischargeable debts. In order to be eligible to have a discharge entered in your Chapter 7 bankruptcy in New Mexico, you have to complete a debtor education course after filing your case. This is different from the pre-bankruptcy class in that it aims to educate folks filing bankruptcy in New Mexico on smart ways to manage their finances. As before, it is important to take this course form a provider approved to offer it to people who have filed a New Mexico bankruptcy case. Although there is no deadline to complete this requirement, you risk having your case closed before a discharge is entered if you forget to take it after your creditors' meeting. That's why a lot of people filing Chapter 7 in New Mexico try to complete the class before or immediately after their creditors' meeting. In order to make sure the court has a record that you completed the course, you will have to fill out and file this certification with the bankruptcy court if your course provider won't send a copy of your certificate of completion to the court on your behalf.

Attend Your 341 Meeting

While the 341 meeting, or creditors' meeting, can sound stressful and even scary to folks filing bankruptcy in New Mexico, it is really nothing to worry about as long as you are prepared and have made sure that all of your bankruptcy forms are in order and everything the trustee asked for has been timely submitted. The most frequent hiccup at 341 meetings is usually the lack of acceptable proof of your social security number. In addition to a picture ID, you have to bring either your original social security card or another document you did not prepare yourself that contains your full social security number, such as a W-2 or Form 1099. Without it, the trustee cannot conduct the meeting. Once the trustee has verified your identity, you will be placed under oath before answering some questions the trustee is asking everyone filing Chapter 7 in New Mexico. While creditors are invited to attend this meeting, and, if they do, are allowed to ask you questions about your financial situation while you are under oath and being recorded, that rarely happens. Instead, in most cases, this meeting takes less than 10 minutes without participation by anyone other than the trustee conducting the meeting and the person who filed Chapter 7 bankruptcy in New Mexico.

Dealing with Your Car

There is no reason to worry about your car when filing bankruptcy in New Mexico. While the Bankruptcy Code does not provide a path to a free car (after all, how would that be fair to everyone else?) it does provide you with more options to deal with your car than you have under state law. If your car is paid off then everything stays the same as long as you properly disclose it as an asset and are able to protect its full value with the available exemptions. If you have a car loan, then filing a Chapter 7 bankruptcy in New Mexico gives you three options to deal with this secured debt. If it doesn't make sense to keep the car and continue to struggle making a car payment that you can't truly afford to make, filing Chapter 7 in New Mexico allows you to surrender the vehicle and discharge your obligation on the loan. This is different than simply voluntarily surrendering your car outside of bankruptcy, as doing so does not relieve you from the obligation to pay the loan and instead typically leads to a lawsuit filed to collect the balance left owing after the vehicle is sold at auction. If the car's value is significantly less than the balance on the loan, and you have the ability to raise some money after filing bankruptcy in New Mexico, you can also redeem the vehicle by paying the creditor what it's worth and discharging the rest of the loan. Finally, if the car is in decent condition and you have no problem making the monthly car payment, you can choose to keep everything essentially the way it was before your New Mexico bankruptcy was filed by entering into a reaffirmation agreement.

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New Mexico Bankruptcy Means Test

Folks who wish to file a Chapter 7 bankruptcy in New Mexico must show the court that they are in fact eligible for Chapter 7 relief. The first step of the New Mexico bankruptcy means test is a comparison of your household income with the median household income for a household of your size. If you are fortunate enough to exceed these income limits, thereby "failing" the first part of the New Mexico means test for bankruptcy, you may still be qualified to file a Chapter 7 case if you pass part two of the test. Part two looks to whether you have sufficient disposable income remaining after payment of certain pre-determined expenses because if you don't, you qualify to file a Chapter 7 bankruptcy in New Mexico.

Data on Median income levels for New Mexico

New Mexico Median Income Standards for Means Test for Cases Filed On or After May 1, 2019
Household SizeMonthly IncomeAnnual Income
1$3,854.17$46,250.00
2$4,677.00$56,124.00
3$4,977.17$59,726.00
4$5,798.58$69,583.00
5$6,548.58$78,583.00
6$7,298.58$87,583.00
7$8,048.58$96,583.00
8$8,798.58$105,583.00
9$9,548.58$114,583.00
10$10,298.58$123,583.00

Data on Poverty levels for New Mexico

New Mexico Fee Waiver Eligibility for Cases Filed On or After May 1, 2019
Eligible for fee waiver when under 150% the poverty level.
Household SizeState Poverty LevelFee Waiver Limit (150% PL)
1$1,040.83$1,561.25
2$1,409.17$2,113.75
3$1,777.50$2,666.25
4$2,145.83$3,218.75
5$2,514.17$3,771.25
6$2,882.50$4,323.75
7$3,250.83$4,876.25
8$3,619.17$5,428.75
9$3,987.50$5,981.25
10$4,355.83$6,533.75
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New Mexico Bankruptcy Forms

The New Mexico bankruptcy forms are a combination of the national forms and certain local forms created specifically for use in New Mexico bankruptcy cases. The New Mexico Chapter 7 bankruptcy forms are comprised in large part of the national forms, though there are some documents you will have to file with the court in your Chapter 7 bankruptcy in New Mexico that are unique to the Land of Enchantment. All required local forms are available for download either as a PDF or as a Word document from the court's website.

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District of New Mexico Requirements

Since New Mexico is a community property state, every individual filing a New Mexico bankruptcy case without naming their spouse as a co-debtor in the case must file local form 1002-1 to disclose their marital status to the court. Additionally, if you did not submit your Statement of Social Security Number to the court when you first filed your Chapter 7 bankruptcy in New Mexico, the Local Rules require that you submit it to the court promptly and mail a copy to your case trustee and all creditors and other parties-in-interest. Once done, make sure to file local form 1007-2 with the court to confirm that you have completed this requirement.

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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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New Mexico Bankruptcy Lawyer Cost

Although the average cost of a bankruptcy lawyer for a typical Chapter 7 bankruptcy in New Mexico is around $1,100, that may be money well spent if you are worried about losing certain assets. Since most lawyers representing debtors in New Mexico bankruptcy cases offer free initial consultations, there is little risk in exploring your options before your case is filed with the court.

  • Attorney cost estimate: $1,000 – $1,200

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If you are worried about filing a Chapter7 bankruptcy in New Mexico without the help of a lawyer, you may want to explore the New Mexico legal aid organizations in your area. These organizations provide low-income residents with free legal aid in New Mexico in a variety of civil legal matters.

New Mexico Legal Aid
(505) 243-7871
301 Gold Avenue, SW, P.O. Box 25486, Albuquerque, NM 87102-3245

Upsolve
Nationwide Service (NYC Office)

Upsolve Location
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New Mexico Court Locations

Pete V. Domenici United States Courthouse
505-415-7999
333 Lomas Boulevard Albuquerque, NM 87102

Pete V. Domenici United States Courthouse
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New Mexico Judges

New Mexico Bankruptcy Judges
DistrictJudge Name
District of New MexicoHon. Robert H. Jacobvitz
District of New MexicoHon. David T. Thuma
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New Mexico Trustees

New Mexico Trustees
TrusteeContact Info
Clarke C. Coll
(575) 623-2288
Yvette J. Gonzalesyvettejgonzales@hotmail.com
(505)771-0700
Edward A. Mazel
(505) 433-3097
Philip J. Montoyapmontoya@swcp.com
(505) 244-1152
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