Written by the Upsolve Team.
Updated August 26, 2020
The Land of Enchantment is a state that loves being distinctive – the capital city of Santa Fe is the tallest state capital in the country as well as the oldest, and The Palace of the Governors is America’s oldest continuously occupied public building. Even though New Mexicans pride themselves on being distinctive and unique, when it comes to financial difficulties, they suffer the same hardships as anyone else. In 2018, 3,234 bankruptcies were filed in the state, showing that even people who do great things and contribute greatly to society and culture can find themselves in a financial bind. Bad things happen to good people, and unexpected circumstances can throw even the most financially stable people into turmoil. To handle these situations, the government created a solution to help hard-working but unlucky people. Filing a Farmington bankruptcy can offer a second chance to people who are struggling to make ends meet and pay down outstanding debts. There are different degrees of relief available for people in financial trouble, so you can decide which type of bankruptcy is best suited for your situation. However,for eligible people in serious debt, Chapter 7 bankruptcy in Farmington provides a clean slate by eliminating most or all of their debt (and almost always without the debtor being forced to sell or give up possessions). A person in serious financial trouble who ends up filing bankruptcy in Farmington can potentially come out the other side in less than 4 months with no debt and all their assets, or things they own, intact. An individual (or married couple) debtor doesn’t even have to spend money to hire a lawyer to handle their bankruptcy – they can easily complete the process themselves, and there are resources like Upsolve and legal aid organizations who can give you low-cost or free help along the way.
Farmington Bankruptcy Lawyers – Estimated Costs
It’s understandable that the cost of a bankruptcy lawyer might keep someone filing bankruptcy in Farmington from hiring one – money is tight, and they can complete the process themselves or get help from legal aid organizations. However, in some situations a lawyer may be able to help secure a result or protect an asset whose value far outweighs the average fee of around $1,100. Additionally, the Farmington bankruptcy lawyer cost usually covers completing and filing your bankruptcy forms as well as attending your mandatory 341 Meeting with you. If you can’t afford a lawyer but don’t want to handle your bankruptcy alone, complete our screener to see if you qualify for Upsolve’s free services.
How to File Bankruptcy in Farmington, New Mexico for Free
Though it’s understandably hard to know what to expect when you’ve never experienced something before, it’s also understandable that people filing bankruptcy in Farmington for the first time would be surprised they are required to pay a filing fee when they are seeking legal help for just that reason – their inability to pay what they owe. In these situations, there are ways to reduce, divide, or even eliminate costs if your income falls under a certain level for the size of your household. A lot of the solution begins with knowing what forms to complete and paperwork to file.
Collect Your Farmington Bankruptcy Documents
Learning how to file bankruptcy in Farmington can be a series of trials and errors, but preparation before getting to work can give your efforts to successfully complete the process a greater chance of success. If you look at the New Mexico bankruptcy documents, you will see the Court is asking for a lot of detailed information about your finances to get a better understanding of your assets, income, debts, and expenses. It makes sense then that your first step is collecting documents containing this information to make your life easier later. At minimum, you should collect your last 6 months of paystubs from your job and a copy of your credit report to see a list of your debts – you’re entitled to a free report each year. Keep all bills, notices of legal action, and collection notices you’ve gotten in the last 3 months because new debt may not always show up on a credit report immediately. You also need your most recent federal income tax return, which you can obtain from the IRS.
Take Credit Counseling
You can’t file your Farmington bankruptcy until you complete a credit counseling course from a Department of Justice approved provider. The course is designed to educate individuals on ways to handle their debt that do not involve bankruptcy, as many people don’t realize they have other options. The course is around 2 hours long, there is a fee between $10 and $50 for the class, and the course can be completed online, over the phone, or in person. You’ll receive a completion certification when you finish the course, and then you have to file that certificate, the filing fee (or waiver request) and your completed bankruptcy forms at the same time to begin your case. It’s important not to delay too long after completing this course before filing bankruptcy in Farmington – the certificate of completion is only valid for 6 months before you are required to take it again.
Complete the Bankruptcy Forms
Successfully filing Chapter 7 bankruptcy in Farmington requires you to complete nearly 2 dozen bankruptcy forms to file with the New Mexico Bankruptcy Court. This takes a large amount of time and can be quite tedious, but the job is made much easier if you spent time and did a thorough job collecting documents before beginning the bankruptcy process. The forms you need to complete are available online free, and unless you hired a bankruptcy attorney you have to fill them in them yourself. Even though the government has created online instructions to help you complete them, it may also be useful to see if you are eligible to get help from Upsolve.
Get Your Filing Fee
The fee for filing bankruptcy in Farmington is $335 payable by either money order, cashier’s check, or exact cash. If coming up with a lump sum payment would be financially challenging, you can complete a form asking the Court if you can pay the fee in up to four installment payments within 120 days of you filing your case. Make sure you do not miss a payment because the Court can throw out your New Mexico bankruptcy case for not following your payment plan. The only way to qualify for a waiver of the entire fee is if your household income falls below a certain level. When you apply for a fee waiver, the Court will either decide to grant your request or have you pay in installments instead.
Print Your Bankruptcy Forms
Once you complete your Farmington bankruptcy forms, it’s time to print them so you can submit them to the Court. The forms should be printed single-sided, and you should use regular 8.5” x 11” paper you probably have at home or in the office. If you don’t have a printer at home, your local library or print shop may have resources you can use. There are a lot of forms, and a single copy of every form is easily 60 pages. With so many papers and forms, it would be smart for you to print out a premade checklist so you don’t miss a form. If you have been working with Upsolve, the process is easy – you’ll receive a PDF document with all the forms in a single document for you to print. The Court only needs one copy of the forms, but you should keep another copy for yourself. Make sure you review the forms, that the information is correct, and that you sign everywhere you are directed to. Bankruptcy forms are signed under penalty of perjury.
Go to Court to File Your Forms
Only a lawyer can file a case with the Court’s online filing system, so you must file your Farmington bankruptcy forms with the Court in person or through the mail. If you can, file your forms in person so you are available to correct errors or address any other issues that could prevent you from filing your Farmington bankruptcy case the same day. The bankruptcy courthouse is located in Albuquerque and open from 8:30 a.m. to 4:30 p.m., Monday through Friday. Take your signed and completed documents, credit counseling completion certificate, and filing fees you need to begin a Chapter 7 bankruptcy in Farmington to the courthouse along with a government-issued ID. Go through security at the courthouse entrance, then go to the Court Clerk’s office. They will process your paperwork, scan your forms into the Court system, and, once your paperwork is processed, give you a stamped copy of your petition and important information including your Trustee assignment and details regarding your 341 Meeting.
Mail Documents to Your Trustee
The Court Clerk should have given you the contact information for the Trustee assigned to your case. Between the time when you filed your Farmington bankruptcy and your 341 Meeting, the Trustee will review the information you provided to the Court and may send you requests for additional information or documents in the days leading up to the meeting. It’s in your best interest to respond quickly to these requests and provide everything the Trustee wants. As the person seeking a discharge, it’s your job to cooperate with the Trustee and comply with reasonable requests. The Trustee can ask the Court to deny your discharge or revoke it once it has issued if you are not cooperating or the Trustee suspects you are hiding something. Whether you hear from the Trustee or not, you must send them a copy of your most recent federal income tax return at least 7 days before your 341 Meeting occurs.
Take Bankruptcy Course 2
You took one educational course to file your Farmington bankruptcy case, and now you must take another to be eligible for discharge of your debts. Take it sooner rather than later to avoid risking a delay of your discharge. The debtor education class is designed to educate you on making responsible future financial decisions and hopefully avoiding another bankruptcy. The course fee usually ranges from $10-$50 and the class usually lasts no more than 2 hours. Like the credit counseling course, you must take it from a Department of Justice approved company. You can often choose between taking it online, in person, or over the phone. After you finish the course, you’ll receive a completion certificate that you must file with the Court – but check with the course provider to see if they will file it with the Court on your behalf first.
Attend Your 341 Meeting
Your 341 Meeting (or Creditors’ Meeting) means your Farmington bankruptcy case is almost at an end. The meeting shouldn’t last more than 10 minutes, and after you are sworn in and your identity is verified, you’ll probably just be asked to verify basic information on your bankruptcy forms or asked basic questions about information you provided. Be truthful, because you are under oath. Beforehand, take a little time to prepare for your meeting. Don’t forget you need to bring acceptable documents verifying your identity and social security number before the Trustee will hold your 341 Meeting. Your creditors can come to this meeting, but they rarely do. Assuming the meeting goes smoothly, you will just wait for a Court discharge to arrive in the mail in around 2 months.
Dealing with Your Car
If you don’t have a vehicle, you are done with your New Mexico bankruptcy at this point. If you do, however, there are a few choices you need to make. If you own your car, whether you can keep it depends on whether the car’s value exceeds the limit of any available exemptions you can claim. If you have a car loan, which is secured debt, you have three options. If you want to keep the car and can afford your current monthly payments, you can enter a reaffirmation agreement with the lender to keep your payments the same until you pay the remaining balance of your loan. However, if your loan balance is now much greater than the car’s value, you might consider paying the lender the current value of the car in a lump sum to redeem it, which discharges the loan balance and gives you a clean title for your car. If, however, neither of these options are available to you financially, you don’t want the car, or you know that expensive repairs are coming which may cost more than the car’s value, you can surrender it back the lender and discharge the loan.
New Mexico Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Farmington
New Mexico Means Test
Chapter 7 bankruptcy in Farmington is intended to offer a fresh financial start for those who are so severely in debt they are struggling to make ends meet and truly cannot pay their debts. To make sure this type of relief only made available to those who actually need it, potential Chapter 7 filers must pass a New Mexico bankruptcy Means Test before being allowed to file. The first part of the Means Test looks at income guidelines to see if your family makes too much money to qualify. If not, a Chapter 7 filing is allowed. If the income is too great, then an examination is made to see whether even if your higher income you have insufficient disposable income once you have paid necessary expenses. If so, you may also file Chapter 7 bankruptcy in Farmington.
Median Income Levels for New Mexico
New Mexico Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for New Mexico
New Mexico Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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New Mexico Bankruptcy Forms
When you’re filing bankruptcy in Farmington, using the wrong bankruptcy forms will cause the Court not to accept your petition or start your case until you correct your errors. In New Mexico, some of the national bankruptcy forms have been adopted, but there are also New Mexico bankruptcy forms that are only used locally that you will want to be aware of. If you have a lawyer, they will know the proper forms to use. If you’ve been working with Upsolve, you’ll get help selecting and correctly completing the right forms.
New Mexico Exemptions
There’s a common misconception that just because you file a Chapter 7 bankruptcy in Farmington, you’re going to lose most of your assets when the Trustee sells them to pay your creditors. This is not true, and the reason is the Bankruptcy Code created a safe harbor known as exemptions. An exemption is a law that protects any number of categories of assets someone may own – retirement accounts, cars, house (called a homestead), unemployment benefits, the list is quite long. If your asset falls under one of these categories and doesn’t exceed the value limit (if any) set for that exemption, it will be protected. When filing your petition, if you have lived in New Mexico the 2 years before filing, you can elect to use federal bankruptcy exemptions or New Mexico bankruptcy exemptions to shield your assets.