Chapter 7 Bankruptcy Lawyer in Albuquerque
When you’re feeling overwhelmed by your financial situation and aren’t sure where to turn to pay your bills and outstanding debts, know that you have legal options available under the federal bankruptcy system.
Filing for bankruptcy is not right for everyone, but before you assume that it’s not right for you, recognize some of the primary benefits. Most importantly, bankruptcy is the only way to get relief from your debts that is formally backed by the federal government. There is no other method that grants you a permanent discharge of debts, and no other method can legally halt collection activities and creditor harassment to the degree that filing for bankruptcy can.
Know, too, that you would not be alone. From 2005 to 2021, 15.3 million individuals and households filed for bankruptcy. The majority (67%) filed for Chapter 7 bankruptcy, and many of these cases were “no-asset” cases, meaning the petitioner was not forced to turn over any assets or liquidate them during the process.
If you would like to know more about filing for Chapter 7 bankruptcy and the other options you may wish to exercise, reach out to New Mexico Financial & Family Law now. An Albuquerque bankruptcy lawyer will speak to you during a no-risk, confidential consultation. Call (505) 503-1637 or contact us online to schedule your appointment today.
Bankruptcy Petitioners in Albuquerque Are Given Rights and Legal Protections
There are many alternatives to bankruptcy, including taking out a personal loan, refinancing, or creating workout agreements with individual creditors. However, none of these options provide the legal protections that a bankruptcy petition does.
For one thing, those who successfully petition for bankruptcy are granted an “automatic stay” from creditor actions. Once a stay has been granted by the bankruptcy court judge presiding over the case, creditors of unsecured debts are legally forbidden from contacting the petitioner or taking any collection actions against them. This pause can give petitioners a much-needed reprieve, and it is the only legally enforceable way of doing so.
Second, when debts are discharged, the debtor no longer has a legal or financial obligation to repay them. Other alternatives to bankruptcy, like workouts, can end in dismay should the creditor decide to go back on the existing agreement. With bankruptcy, they are legally unable to do so, as the petitioner is protected by the federal court system.
There are many other advantages to bankruptcy to consider, such as the ability to reconcile all outstanding unsecured debts at once rather than with each individual creditor. You may also be able to combine certain legal actions with your bankruptcy filing in order to get on sure financial footing for your future.
Reach out to our Chapter 7 bankruptcy lawyers in Albuquerque to discuss your options, and take the first steps to finally obtaining the relief your family needs.
Resources for Financial Hardship in Albuquerque
There are many resources available for needy families in the Albuquerque and Bernalillo County area. The Bernalillo County Department of Community Services maintains an ongoing list of verified service providers for housing and other vital needs. There are also aggregator sites that provide a curated list of charities and service providers in the Albuquerque area to assist families and individuals who are currently experiencing financial hardship or instability.
What to Know About Filing for Chapter 7 Bankruptcy in Albuquerque
When you choose to file Chapter 7 bankruptcy in Albuquerque, you must first receive credit counseling services before you can file. The U.S. Bankruptcy Court, District of New Mexico also recommends that you receive legal counseling and guidance from a qualified Chapter 7 attorney.
All filings will be conducted through the U.S. Bankruptcy Court, District of New Mexico, which is located at the following address:
333 Lomas Blvd. NW, Suite 360
Albuquerque, NM 87102
Note that ongoing COVID-19 restrictions may limit public access and in-person services available.
Filers (petitioners) can instead file the needed Chapter 7 paperwork online using fillable electronic pdf forms or an Electronic Self-Representation (eSR) Bankruptcy Petition.
What Do I Need in Order to File?
All petitioners should have a full inventory of real property (real estate), personal possessions, and the value of each held asset or item. They should also prepare a list of all known creditors, including mortgages, credit card service providers, and auto loans. A two-year record of all financial transactions is requested. The petitioner should also have a copy of their credit report available.
Court Employees Cannot Answer Questions or Offer Guidance
One frustrating aspect of filing for bankruptcy for many people is that they cannot get explanations from court employees. If a petitioner has a question about their form or how exemptions work, then the court employees are legally not allowed to provide answers. They also cannot provide any sort of legal advice, guidance, or suggestions.
Because of this requirement, the U.S. Bankruptcy Court, District of New Mexico, recommends that you consult with an experienced Chapter 7 bankruptcy lawyer in Albuquerque prior to filing.
Hearings for Chapter 7 in Albuquerque
Once you have completed credit counseling and prepared and submitted the needed forms, you will be assigned a case number and a trustee. All creditors will be notified, and they will have the opportunity to be heard at a hearing.
As a result of previous COVID-19 restrictions, Chapter 7 hearings may be conducted over the telephone at the discretion of the presiding trustee and based on the needs of the petitioner or interested creditors.
Choosing New Mexico Property Exemptions or Federal Bankruptcy Code Exemptions
Filing for Chapter 7 bankruptcy in Albuquerque requires the petitioner to give up property for sale (liquidation) unless it is covered by an exemption rule. Exemption rules allow you to keep the property up to a certain value. For married couples filing for bankruptcy, these values are doubled. Most cases are “no-asset” cases, meaning that most people do not actually lose any property in a Chapter 7, as most ordinary possessions that people have are exempt.
Unlike many other states, when filing for bankruptcy in New Mexico, you are allowed to choose either the state’s exemption rules or the federal rules. You must pick one or the other; you cannot pick and choose exemptions from each.
Who Is Eligible for Chapter 7 Bankruptcy in Albuquerque?
Eligibility for filing Chapter 7 bankruptcy in New Mexico is based on the state means test. If your average yearly income is less than the median New Mexico yearly income, it is assumed that you will pass the means test, and you may file Chapter 7 bankruptcy.
Individuals whose income is unclear or who are above the state’s median income level must fill out the Chapter 7 Means Test Calculation form and submit it prior to their petition to determine if they are eligible to file for Chapter 7 Bankruptcy. The purpose of the means test is to determine if individuals have an ability to pay. If they do, then they may be required to file for Chapter 13 bankruptcy or find some other alternative.
It is possible that individuals with high income could still qualify for Chapter 7 bankruptcy if they have certain income or assets that could be considered exempt from their means. Potential examples include certain government-provided benefits for disability and income that is not technically personal income. Further, if a majority of an individual’s debts are business debts, the means test may not apply.
As part of the bankruptcy petition process, filers are also expected to take a credit counseling course from an approved credit counseling agency. Proof of completion is required, and this proof must be filed along with the bankruptcy petition. Certain individuals may be exempt from this requirement, however, such as anyone currently serving on active duty in the U.S. military or individuals who have been diagnosed with a cognitive impairment.
Talk About Your Options for a Brighter Future With a Chapter 7 Bankruptcy Lawyer in Albuquerque
Chapter 7 bankruptcy may be the right choice for you if you have limited income, only a few assets, and an inability to pay back any lingered unsecured debts. While Chapter 7 may require some individuals to liquidate their property, the majority of cases have “no-asset” estates thanks to generous exemptions applied to qualifying individuals.
There are also many alternatives to filing for Chapter 7 bankruptcy worth considering. Chapter 13 bankruptcy may be more appropriate if you are concerned about the long-term impact on your credit rating and your ability to borrow. You may also be able to form individual workout agreements with creditors in order to avoid default.
You can discuss all of these options and more during your no-risk, confidential consultation with a New Mexico Financial & Family Law attorney. Our Albuquerque Chapter 7 bankruptcy lawyers have extensive experience helping out people just like you. Call us today at (505) 503-1637, or contact us online, and we’ll book you for your first appointment.