Chapter 7

In a Chapter 7 bankruptcy, a consumer is able to have many or all of his or her debts canceled by a bankruptcy trustee. In some cases, a bankruptcy trustee will sell some of the person’s property to cover debt owed to creditors. A Chapter 7 bankruptcy is also called a “straight” or “liquidation” bankruptcy because the law provides that the debt owed by the consumer is liquidated instead of re-organized into a Chapter 13 repayment plan.

To be eligible for a Chapter 7 bankruptcy, you must not have filed a Chapter 13 bankruptcy within the last six years or a Chapter 7 bankruptcy within the last eight years. In addition, you are eligible only if it is not feasible that you complete a Chapter 13 repayment plan. The “means test” determines whether a consumer’s income is low enough to file a Chapter 7 bankruptcy. However, you may still qualify under the means test even with a significant income. You should consult with us to determine whether you qualify for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. This is an important matter to be considered at the outset of our representation.

In a New Mexico Chapter 7 bankruptcy, the New Mexico federal bankruptcy court will appoint a person called a “bankruptcy trustee” to assess your finances and determine how to resolve your debts among your current assets under both federal and New Mexico law. The trustee’s staff will examine you and your financial transactions during the previous year.

A lawyer will be able to assist you in filing the necessary bankruptcy forms. These forms will:

• Describe your property
• Identify current income and monthly living expenses
• Reveal debts, exempt property, property you owned and money you spent during the previous two years
• Provide information about property you sold or gave away during the previous two years

Our bankruptcy lawyers will explain bankruptcy, what it involves and its effects. We can help you find other solutions that are available to you to erase your debt and the consequences of these options.

If you do decide to file for Chapter 7 bankruptcy in New Mexico, our attorneys assist you with every stage of the process from obtaining the mandatory credit counseling certificates to preparing your petition to prevent creditors from contacting you.

If you are considering filing for bankruptcy, contact our New Mexico bankruptcy lawyers to help guide you through every step of this significant life decision.