Bankruptcy is a court proceeding which lets a person or business have some or all of their debts absolved. It should normally only be considered as an option of last resort, because it can have serious 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 product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in New Mexico is basically the same as the procedure anywhere else in the United States. However, individual courts in Bloomfield, New Mexico will have particular rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in Bloomfield, New Mexico

There are 2 common types of consumer bankruptcies in Bloomfield, New Mexico: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types 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 absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Bloomfield, New Mexico is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Bloomfield, New Mexico

Chapter 13 bankruptcy in Bloomfield, New Mexico is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 does not absolve debt, but restructures it instead. Normally, 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 normally manageable, as long as the debtor can make some sacrifices.

Which Type of Consumer Bankruptcy Should I File in Bloomfield, New Mexico

Which Bankruptcy type to file under depends heavily on the facts of each particular case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.

In any case, you should talk with a local Bloomfield, New Mexico bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.