Bankruptcy in New Mexico is a legal process through which some of the debts of an individual or a business are absolved (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult procedure. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good New Mexico bankruptcy lawyer can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your distinct case.
Types of Bankruptcy in New Mexico
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in New Mexico will be the same as everywhere else in the United States. There are 2 basic forms of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In New Mexico, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is excused. Under Chapter 13 bankruptcy, debt is normally not excused; instead, it is reorganized. The court will craft a long-term payment plan that allows the debtor to pay off his or her debts in single payments, over time. This usually gives the debtor some breathing room that would not exist if all of his or her debts became due and payable at once.
Typically, it is businesses as opposed to individuals that avail themselves of Chapter 11 bankruptcy protection. Similar to Chapter 13, it entails reorganization of debt, rather than discharge. The debtor has to come up with a plan to reorganize its debts, and this plan must then be approved by a vote of the participating creditors. Once the plan is approved, the debtor has to carry it out.
How Can a New Mexico Bankruptcy Lawyer Help?
Filing for bankruptcy can be a life-changing decision. Depending on the circumstances, it can change your life for the better, or worse. A New Mexico bankruptcy lawyer can help you figure out if bankruptcy is a viable option for your specific situation.
Interesting Facts About New Mexico
New Mexico is situated in the Southwestern region of the U.S. It is often considered the prime example of Southwestern life and culture in America. Before becoming part of the U.S., the New Mexico region was once part of the Imperial Viceroyalty of Spain. This is reflected in the red and gold colors of the state flag, which reference the region's Spanish origins.
New Mexico's state Constitution was approved in 1912 and authorizes the form of government in the state. The New Mexico court system is organized into different levels beginning with the Municipal Courts and ending with the Supreme Court of New Mexico. New Mexico has also instituted a one-of-a-kind "Problem-Solving Court" system, which is authorized to provide special interventions for drug offenders.
The state of New Mexico has also launched a Court Improvement Project (CIP). The CIP is aimed at improving the quality and efficiency of judiciary proceedings in New Mexico. One of the state's most famous court cases is Liebeck v. McDonald's (1994), popularly known as "The McDonald's hot coffee case". The case spawned a whole host of liability claims for fast-food chains, and was featured in a television documentary film.
Lawyers in New Mexico handle many types of cases ranging from simple legal claims to complex claims like the Liebeck case. New Mexico lawyers are skilled at providing legal advice and zealously represent clients during lawsuits. Working with a New Mexico lawyer can help make the legal process run much smoother.