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New Mexico Bankruptcy Lawyer

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If you've found yourself struggling to repay overwhelming amounts of debt, you may have considered filing for bankruptcy. While bankruptcy is not something that anyone aspires to, it can be a real boon to those who have fallen into dire financial circumstances. A bankruptcy lawyer in the state of New Mexico can help you decide whether or not bankruptcy is the right economic option for you.

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, in order to limit individual access to the bankruptcy court and prevent repeat bankruptcy filings. In order to file for bankruptcy, you will first have to submit to a means test. This will determine which kind of bankruptcy you'll be eligible for, Chapter 7 or Chapter 13.

Chapter 7 bankruptcy is most appropriate for individuals who have a low income and do not have many assets. It allows them to discharge more of their debt under bankruptcy. Chapter 7 bankruptcy is most similar to earlier versions of bankruptcy before the BAPCPA, and is sometimes referred to as the 'liquidation plan.' Under this plan, you will be allowed to declare some exemptions; any remaining assets you have will then be assumed by a trustee, who will sell them in order to pay back your creditors. The amount of debt above and beyond the value of those assets will then be forgiven.

On the other hand, Chapter 13 is a form of bankruptcy that is for those individuals who have a steady income and assets, such as a home or a car, that they wish to repay. Under this plan, also known as the wage earner's plan, the debtor can keep his or her car and house, or other assets, as long as they continue to make regular payments. Some of the debt may be forgiven, but the debtor must commit to repaying a portion of it, over a period of three to five years, depending on the debtor's individual financial circumstances.

In New Mexico there are certain bankruptcy exemptions, which are the kinds and values of property that creditors or bankruptcy trustees are legally unable to touch. The debtor is allowed to keep the property that is considered exempt; for example, the homestead is exempt up to $60,000, and the motor vehicle is exempt up to $4,000. Books, health aids, furniture, and clothing are exempt, and jewelry is exempt up to $2,500. Also exempt are pensions or retirement benefits, general assistance, crime victims' compensation, unemployment compensation, workers' compensation, and occupational disease disablement benefits. Life, accident, health, or annuity benefits or cash value are are exempt, as well as benevolent association benefits of up to $5,000.

Recent changes in bankruptcy law have made this once-confusing process even more difficult than ever. A qualified bankruptcy attorney will not only explain the process to you in easy-to-understand terms, he or she will lend you their years of experience. They will file all the necessary paperwork, represent you in court, and contact your creditors on your behalf.

Although it's never easy to undertake as serious a measure as bankruptcy, having a legal professional on your side can alleviate the pain and make the entire process go more smoothly. In 2008, New Mexico had a cumulative 4,481 residents filed for bankruptcy, and that number may grow due to the recent economic turmoil that so many have experienced.

If you are thinking that bankruptcy might be the right option for you, visit the website of the American Bar Association to access their lawyer locator service, which can help you find a qualified, compassionate bankruptcy attorney in your area of New Mexico.