December 15, 2017
If you’re having trouble making ends meet, filing for bankruptcy might be the answer. After choosing between Chapter 7 or 13 bankruptcy, you’ll prepare your paperwork and file it with the court. This article explains where you’ll find the information you’ll need to complete your bankruptcy petition, such as official bankruptcy forms, New Mexico means testing figures, credit counseling providers, and your local New Mexico bankruptcy court. You’ll also learn about protecting property in a New Mexico bankruptcy.
Official Bankruptcy Forms
You’ll only be eligible to discharge (wipe out) debt if you provide the New Mexico bankruptcy court all of the details of your financial situation. For instance, you’ll disclose recent property transactions, income, expenses, property, and debt on official bankruptcy forms found the U.S. Courts Form page. The completed paperwork gets filed in your local bankruptcy court along with a filing fee or fee waiver and a certificate of completion from an approved credit counseling course (more below).
New Mexico Bankruptcy Information
Even though federal law governs bankruptcy filings, you’ll need some information that’s specific to New Mexico.
Means Testing and Credit Counseling Information
You can find two types of information on the U.S. Trustee website: means testing figures and approved credit counseling providers.
- Means testing information. Before you qualify to file a Chapter 7 bankruptcy, you must meet the income guidelines in the “means test.” If your family income is higher than the median income of New Mexico, you might pass the test after deducting pre-set expenses. If it’s lower than the median, you qualify. You’ll find the income and expense guidelines by selecting “Means Testing Information.” For a Chapter 13 bankruptcy, you’ll do a similar calculation to determine your monthly payment.
- Required course providers. Most filers will take a credit counseling course before filing for bankruptcy and a debt management course before receiving a discharge. Click on “Credit Counseling & Debtor Education” and scroll down to the District of New Mexico to find approved providers.
New Mexico Bankruptcy Court Location
On the New Mexico bankruptcy court website, you’ll find the court’s local rules and forms, as well as instructions for filing your paperwork (click on “For Self-Represented). The court’s location and contact information are as follows:
United States Bankruptcy Court, District of New Mexico
Dennis Chavez Federal Building and U.S. Courthouse
500 Gold Avenue SW, Tenth Floor
Albuquerque, New Mexico 87102
(505) 348-2500; (866) 291-6805
New Mexico Bankruptcy Exemptions
Bankruptcy isn’t meant to strip you of everything that you own. You can always protect some of your property, if not all of it. You can exempt (protect) the property that appears on one of two lists (you must choose the list that works best): the federal bankruptcy exemptions or the list of New Mexico exemptions. (Filers who use state exemptions can supplement with federal nonbankruptcy exemptions.)
If you have to give up any nonexempt property, the Chapter 7 trustee will sell it and use the proceeds to pay creditor claims. In a Chapter 13 plan, the creditors will also get the benefit of any nonexempt property, but instead of turning it over, you’ll pay the value of the nonexempt asset as a part of your repayment plan.
Below are examples of commonly used New Mexico bankruptcy exemptions. Spouses filing together can double the exemption amount for most property that they both own. The statute citations are to the New Mexico Statutes Annotated.
- Homestead. Up to $60,000 of equity in your home. (§ 42-10-9)
- Personal property. Books and furniture; building materials; clothing; cooperative association shares, although only the minimum amount required to be a member of the cooperative (§ 53-4-28); health aids; jewelry up to $2,500; materials, tools, and machinery for digging, drilling, completing, operating or repairing an oil line, gas well, or pipeline. (§§ 42-10-1, 42-10-2, unless otherwise noted)
- Motor vehicles. Equity in a car, van, truck, SUV, motorcycle, or another motor vehicle up to $4,000. (§§ 42-10-1, 42-10-2)
- Tools of the trade. Tools used in your trade or profession up to $1,500. (§ 42-10-1; §42-10-2)
- Wages. 75% of your disposable earnings or 40 times the federal minimum wage, whichever is more. The bankruptcy judge can exempt more wages for low-income debtors. (§ 35-12-7).
- Pensions. Public employee retirement benefits (§§ 10-11-135, 10-11-136); judge and magistrate pensions (§§ 10-12B-7, 10-12C-7); educational retirement benefits (§ 22-11-42); state police pension (§ 29-4-10); pensions or retirement benefits (§§ 42-10-1, 42-10-2). Tax-exempt retirement accounts, including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans, IRAS and Roth IRAs to current limits. (For more information and current limit, see Your Retirement Plan in Bankruptcy.)
- Public benefits. Crime victims' compensation (§ 31-22-15); public assistance (§ 27-2-21); occupational disease disablement benefits (§ 52-3-37); unemployment compensation (§ 51-3-37); workers' compensation (§ 51-1-52).
- Insurance. Benevolent association benefits to $5,000 (§ 42-10-4); fraternal benefit society benefits (§ 59A-44-18); withdrawal or cash value of life, accident, health, or annuity benefits (§ 42-10-3); life insurance proceeds (§ 42-10-5).
- Miscellaneous. Construction materials (§ 48-2-15); an ownership interest in an unincorporated association (§ 53-10-2); particular business partnership property (§ 54-1-25); interest in a spendthrift trust (§ 42-9-4).
- Wildcard exemption. Up to $500 of any personal property, other than cash (§ 42-10-1), and up to $5,000 of any real or personal property if you don’t use the homestead exemption (§ 42-10-10).
Additional New Mexico exemptions exist, and the amounts adjust periodically. Make sure you’re protecting your property by reviewing exemptions on the website for the New Mexico Compilation Commission or by consulting with a bankruptcy lawyer.
If you decide to file a bankruptcy case yourself, you’ll be responsible for understanding all aspects of the law. A book like How to File for Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. will help you navigate bankruptcy issues with confidence.