Bankruptcy is a court proceeding which lets a person or business have some or all of their debts excused. It should typically only be considered as an option of last resort, because it can have significant long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Being a creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in New Mexico is essentially the same as the process anywhere else in the United States. However, particular courts in Albuquerque, New Mexico will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Albuquerque, New Mexico
There are 2 typical forms of consumer bankruptcies in Albuquerque, New Mexico: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 states that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many forms of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.
Once the non-exempt property is sold, the rest of the dischargeable debt is cleared. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Albuquerque, New Mexico is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Albuquerque, New Mexico
Chapter 13 Bankruptcy in Albuquerque, New Mexico is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each distinct case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Albuquerque, New Mexico
The answer to this question depends strongly on your distinct situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
Of course, you should always seek the counsel of an accomplished local Albuquerque, New Mexico bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your specific situation.