Written by the Upsolve Team.
Updated November 24, 2019
New Mexicans are well-educated, hard-workers, and have good jobs where they can make a decent living. In fact, New Mexico has more PhDs per capita than any other state in the US thanks to the large number of research facilities based here. With so much earning potential there were still 3,234 bankruptcy cases were filed in New Mexico in 2018 alone. Bad things happen to good people, and unexpected circumstances can throw even the most financially stable people into turmoil. When this happens, the government has created a solution to help our hard-working but unlucky people just like these. A Las Cruces bankruptcy can offer needy people relief from crushing debt. Though there are different types of bankruptcy that can help people on various levels, the most sweeping relief comes from the elimination of most or all debt for eligible people through a Chapter 7 bankruptcy in Las Cruces. No one ever wants to file bankruptcy in Las Cruces, but sometimes it really is the best course of action to get help and protect what assets they have left. Though people try to avoid filing for many reasons, the main thing to realize is the process is less painful, less intimidating, and can give better results than expected in the end. Bankruptcy does not necessarily mean losing your possessions, or a case that will drag on for years in Court – in fact, taking advantage of legal protections for your things can actually allow you to keep more of your property than you would have otherwise. In fact, the bankruptcy process is simple enough you do not need to hire a lawyer and can complete the process yourself or with low or no-cost help from legal aid organizations or nonprofits like Upsolve for help.
Las Cruces Bankruptcy Lawyers – Estimated Costs
For people with financial problems, the last thing many want to do is incur the cost of a bankruptcy lawyer to help with their case. If you don’t know if you need a lawyer, many lawyers offer a free consultation that could help you decide. Prepare for the total Las Cruces bankruptcy lawyer cost to be around $1,100, but this often depends on the lawyer and how complicated your case is. You can also complete our screener to see if you qualify for Upsolve’s free services.
How to File Bankruptcy in Las Cruces, New Mexico for Free
It’s hard to know what to expect with your New Mexico bankruptcy case if you have never experienced one before, but most people don’t realize there are fees involved when filing Chapter 7 bankruptcy in Las Cruces. However, there are ways around paying the fees if your income falls under a certain level for the size of your household – you just need to know which forms to complete to be able to proceed through bankruptcy at low or no-cost.
Collect Your Las Cruces Bankruptcy Documents
You’re learning how to file bankruptcy in Las Cruces, and as you go forward, you’ll notice a lot of Court documents require you to provide extensive information about your income, expenses, assets, and debts. It makes sense then that your first step is collecting documents containing this information now will 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.
Take Credit Counseling
A Las Cruces bankruptcy can’t begin until you take a credit counseling course. Once you have done so, you’ll have to submit a completion certificate with the Court along with your completed bankruptcy forms and filing fee to begin your bankruptcy case. The roughly 2-hour course is meant to educate everyone thinking of filing bankruptcy in Las Cruces of debt relief solutions besides bankruptcy. The course must be taken from a Department of Justice approved provider or it will not count. You must complete the course before you file your case, but the certificate is only good for 6 months before you must take it again – so file quickly.
Complete the Bankruptcy Forms
Filling out bankruptcy forms for Chapter 7 bankruptcy in Las Cruces is by far the most tedious, time consuming part of the process, but you will be happy you spent time earlier collecting all those documents for your New Mexico bankruptcy. The nearly 2 dozen forms you need to complete, nearly 70 pages in total, are available online for free, but you need to fill them out yourself unless you hired an attorney or are working with Upsolve. There are online instructions online to help you, or you can see if Upsolve can help or else purchase some inexpensive bankruptcy software to help with calculations.
Get Your Filing Fee
Filing bankruptcy in Las Cruces means you pay a $335 filing fee by cash (the exact amount) or else either money order or cashier’s check. If paying in one lump sum is financially difficult, you can ask the Court to allow you to pay the fee in up to 4 installment payments over a period of 120 days after you file your case. If you are paying installments, make sure you are on time with your payments or else the Court can dismiss your Las Cruces bankruptcy case. You can only qualify to avoid paying the fee entirely (a waiver) if your household income is under a certain level. If you apply for a fee waiver, the Court will either grant your request or tell you to pay in installments.
Print Your Bankruptcy Forms
If you didn’t hire a lawyer, your next step is to print out the completed Las Cruces bankruptcy petition. You must print all the forms single-sided, but you can use 8.5” x 11” paper commonly found in your printer at home, your office, or even your local print shop or library. Make sure you have enough paper and that you print all the forms. It might be a good idea for you to print one of the premade checklists available. The Court only needs one copy of the signed, printed forms, but you should keep another copy for yourself. If Upsolve has been helping you, the process is easy – you’ll receive a PDF document with every form inside a single document that you just have to open and print. Make sure you review the forms, that the information is correct, and that you sign everywhere you are directed to – remember, the forms have to be signed, under penalty of perjury, before you can submit them to the New Mexico Bankruptcy Court.
Go to Court to File Your Forms
If you are not working with a lawyer, you must file your New Mexico bankruptcy case in person or by mailing the required documents to the Court. If you can, you should file your forms in person so you can address any issues immediately and get your Las Cruces bankruptcy case filed same day. The bankruptcy courthouse, located in Albuquerque, is open 8:30 a.m. to 4:30 p.m. Monday through Friday except federal holidays. Go with all the documents, certificates, and fees you need to file a Chapter 7 bankruptcy in Las Cruces and a government-issued ID. You will go through security at the courthouse entrance before going to the Court Clerk’s office. Once your paperwork is processed there, you’ll receive a stamped copy of your petition and important information including your Trustee assignment and time and date of your 341 Meeting.
Mail Documents to Your Trustee
The Trustee is a Court-appointed official that oversees your case, reviews information you provided the Court in your bankruptcy forms and makes sure the rules are being followed. Keep the information the Court Clerk gave you on your Trustee when you filed your Las Cruces bankruptcy. As they review your information before your scheduled 341 Meeting, they could request more information or documents from you. Respond quickly if they do – it’s your job to cooperate with them and if you are not complying with requests or they sense you are trying to hide something, they can ask the Court to deny your discharge or revoke it once it has issued. Even if you receive no additional requests, you must still send a redacted (personal information blacked out) copy of your most recent federal income tax return at least 7 days before your 341 Meeting occurs.
Take Bankruptcy Course 2
You must take one more course to be eligible for a discharge of your debts stated in your Las Cruces bankruptcy case – the sooner you take it, the less likely your discharge will be delayed. The debtor education class is designed to educate you on making responsible financial choices to avoid needing bankruptcy again in the future. The fee ranges from $10-$50, the class usually lasts no more than 2 hours, and you must take it from an 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 – though check with the course provider to see if they will file it with the Court on your behalf first.
Attend Your 341 Meeting
You know you’ve almost completed your Chapter 7 bankruptcy in Las Cruces when your 341 Meeting (or Creditors’ Meeting) takes place. The meeting only lasts a few minutes, and you most likely will only be asked to verify basic information on your bankruptcy forms. Take a few minutes to prepare for your meeting. Remember to bring acceptable documents verifying your identity and social security number otherwise the Trustee can’t hold your meeting. Your creditors can come to this meeting, but it’s very unusual for one to actually show up and ask questions. Assuming no issues arise, the New Mexico Bankruptcy Court will grant your bankruptcy discharge approximately 2 months after this meeting.
Dealing with Your Car
Many people worry about keeping their car when filing bankruptcy in Las Cruces, but there’s little reason to be worried. You have options on how to handle the situation. If you own the car and its value is protected under the available exemptions, you keep it. If you have a car loan, which is secured debt, you have three options. If your car is now worth much less than the loan balance, you can pay the creditor the current value of the car to redeem it, and the rest of the loan balance will be discharged. Alternatively, you can enter a reaffirmation agreement with them to keep your payments the same as before you filed bankruptcy. You’ll still have to pay the remainder you owe on the car. If, however, neither of these options are available to you – or you are facing mechanical woes that will be close to the value of the car – then surrendering it to the lender will discharge the balance of the loan.
New Mexico Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Las Cruces
New Mexico Means Test
Chapter 7 bankruptcy in Las Cruces was designed to help severely indebted individuals that truly need debt relief. To keep people who can afford to pay their debts from seeking Chapter 7 relief, potential filers are required to take and pass a New Mexico bankruptcy Means Test first. The Means Test first examines if your household makes too much money to qualify, then if so, checks to see if even with your higher income you still have insufficient disposable income after you pay certain necessary expenses spelled out by the Bankruptcy Code. If your household income falls below the guideline, you can file a Chapter 7 bankruptcy. You may also file for Chapter 7 if your income does not fall below the guideline, but you have insufficient income left after covering necessary expenses.
Median Income Levels for New Mexico
New Mexico Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
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.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
New Mexico Bankruptcy Forms
It’s important to complete the correct forms when preparing to file your Las Cruces bankruptcy petition, otherwise the Court Clerk will not open your case. Courts in New Mexico do use some of the national bankruptcy forms, but additionally there are New Mexico specific bankruptcy forms as well.
New Mexico Exemptions
Despite what many people think, when you file a Chapter 7 bankruptcy in Las Cruces it is extremely unlikely your property will be taken by the trustee. Exemptions, which are laws that protect some categories of assets during a bankruptcy, will usually keep most of your things out of your creditors’ hands. You can choose whether to use federal bankruptcy exemptions or New Mexico bankruptcy exemptions to shield your belongings if you have lived in the Land of Enchantment for at least 2 years prior to filing your bankruptcy petition.