Chapter 13 Bankruptcy Lawyer in Albuquerque
When you have non-exempt assets that you are not willing to lose and make a consistent income, a Chapter 13 bankruptcy can be a suitable repayment plan that helps you get your finances back on track.
All bankruptcy chapters are financial plans at their core, aiding borrowers in sorting their finances for a balanced future, free of the burden of their past debt. Chapter 13 offers you the chance to avoid the liquidation process altogether by repaying an agreed-upon portion of your debt over three to five years. Some debts may be eligible for discharge upon completion of this payment plan. Chapter 13 plans are ideal for wage earners, which is why this chapter of bankruptcy has taken on the nickname “wage-earner’s plan.”
Choosing a bankruptcy chapter and assessing the fine details of your sensitive financial situation might feel overwhelming when you try to go it alone. That is precisely why our skilled team of Albuquerque Chapter 13 bankruptcy attorneys is here to support you through the process. We can help you build your repayment plan and finalize payment details. We can also help you understand what your financial future could look like, including what options you have available. And, of course, our Albuquerque attorney will represent you during all conversations with the bankruptcy trustee.
Call (505) 503-1637 or contact us online for a no-obligation consultation to discuss your current financial situation.
Filing for Chapter 13 Bankruptcy in Albuquerque
The U.S. Bankruptcy Court for the District of New Mexico is located at the following address:
333 Lomas Blvd. NW, Suite 360
Albuquerque, NM 87102
Credit Counseling in Albuquerque
To file for bankruptcy in Albuquerque, you must complete the required credit counseling course approved by the government. A list of the approved agencies for New Mexico can be found on the justice department website. In some situations, completing one of these courses may affect your intention to pursue or hold off on filing bankruptcy.
In all cases, consulting with a seasoned Albuquerque chapter 13 bankruptcy lawyer can help you make the best decision for your financial future. An attorney can talk through the requirements and help you perform an audit of your assets and debts. They will also help you develop a proposed payment agreement should you continue filing for Chapter 13 bankruptcy.
How an Albuquerque Chapter 13 Bankruptcy Attorney Can Help
Getting the advice of an experienced local attorney in the early stages is recommended. An attorney can inform you of all requirements and consequences involved in a bankruptcy case. In order to file, you’ll need to provide details on all of your property, including real estate and personal possessions. You’ll also need details on all your loan-providers and creditors. Information about your income, financial transactions, credit history, and employment are likely to be requested, as well.
It’s important to keep in mind that a court employee can’t provide any sort of legal assistance, which can include explaining how to fill out certain forms. By law, court employees and other non-attorneys can’t give legal advice, guidance, or suggestions. This means if you are unsure about how to complete forms or make an error while petitioning for Chapter 13 bankruptcy, you could find yourself in a worse situation than before. For this reason, the U.S. Bankruptcy Courts recommend seeking legal help from a qualified attorney when considering bankruptcy.
During your hearing, a chapter 13 bankruptcy attorney in Albuquerque will be able to represent you. They’ll make sure you follow the law and hold to the agreements you sign. They can also help prepare you for any questions you may be asked during the hearing.
Create Your Chapter 13 Repayment Plan
A repayment plan is created following a thorough assessment of your month-to-month finances. It essentially acts like a budget to follow to repay the debt you owe. A repayment plan takes various factors into consideration, such as your income, assets, debts, and recent financial transactions.
A Chapter 13 bankruptcy attorney in Albuquerque can help you understand how your unique situation — including income, assets, debts, and transactions — may affect your plan to repay your creditors.
To move forward with the repayment plan, you must also complete the New Mexico means test. The means test calculates your Average Monthly Income (AMI) based on factors like your income versus your disposable income.
Requirements to File Chapter 13
Once your Average Monthly Income (AMI) is calculated, your household income must fit into the current median income figures set by the bankruptcy courts of the state of New Mexico. For a household of one individual, your income must fall under $50,177, and for a two-person household, the total income must be under $64,080. These figures are valid as of May 2022.
New Mexico Property Exemptions or Federal Exemptions
Though Chapter 13 bankruptcy doesn’t usually come with the threat of liquidation or foreclosure, it may be worth knowing that non-exempt property in the case of a Chapter 7 bankruptcy can usually be saved from repossession through a structured repayment plan via Chapter 13 bankruptcy.
In New Mexico, the exemptions for a property that can be targeted for liquidation are based on either the Federal standard or New Mexico’s.
Is Chapter 13 Bankruptcy Right for Me?
Chapter 13 bankruptcy is a great option for individuals who feel the mounting pressure of their debts but who technically earn too much to qualify for Chapter 7 liquidation.
According to the U.S. Bankruptcy Courts, 5 million individuals (non-businesses) filed for Chapter 13 bankruptcy from 2005 – 2021. That’s just 32% of total non-business filings, but still a sizeable swath of the U.S. population.
Chapter 13 bankruptcy may be more favorable to debt holders because it offers them more flexibility to negotiate secured debts while avoiding repossession. Also, while Chapter 7 filings remain on your credit report for up to 10 years, Chapter 13 filings only remain for up to seven years. Further, many creditors will look more favorably upon a Chapter 13 filing because it indicates that the debt holder was willing to make efforts to pay down at least a substantial portion of their debts.
One of the drawbacks to Chapter 13 bankruptcy, though, is that while other proceedings like Chapter 7 take just a few months, Chapter 13 payment plans are usually fixed on a schedule of three to five years. However, once the payment plans have been completed, the debt holder may be entitled to discharge the remaining balances on applicable accounts.
How Are Chapter 13 Payment Amounts Set?
When petitioners file for Chapter 13 bankruptcy relief, they must include multiple worksheets outlining their financial details. They must list their monthly living expenses, including all costs related to housing, food, utility bills, taxes, transportation costs, and any reasonable and necessary costs. They must also list their income from all sources, including government benefit plans. Some income may be exempt from overall wage calculations, but it must nevertheless be accounted for on the overall list of declarations.
The individual’s income and expenses will be compared to the total balance of all applicable debts. They are then expected to calculate fair and reasonable monthly installments to pay down the debts over three to five years. While not all unsecured debts need to be repaid in full during this period, the expectation is that the petitioner will make all reasonable efforts to pay down the portion of the debt they can.
Because the debt holder sets their own payment amount, they must be extremely careful and realistic in their calculations. Any mistakes made can cause their case to be dismissed, or their payments may be set too high for them to reasonably keep up with through the duration of the repayment period.
Once the Chapter 13 bankruptcy petition has been received by the court, you have 14 days to submit the proposed repayment plan. Even if this plan has not yet been approved by the court, the debt holder must begin making their installment payments within 30 days of submitting their petition.
This strict timeline and the overall expectations placed upon the debt holder are strong reasons why it is highly advisable for them to seek counsel from an experienced Albuquerque bankruptcy law firm.
Work With New Mexico Financial & Family Law to Find Relief
When you engage with our firm, we sit down with you for an honest and complete look at your finances. You will learn all of the opportunities available to reduce (or, sometimes, get rid of) your debt, which may include workouts, Chapter 7 bankruptcy, Chapter 13 bankruptcy, and other alternatives.
Start the journey towards regaining financial freedom when you call or contact us to book your no-risk initial appointment. Call (505) 503-1637 or contact us online to schedule your confidential case review.