Albuquerque Chapter 7 Bankruptcy Lawyers

Albuquerque Chapter 7 Bankruptcy Attorney

Providing Chapter 7 Bankruptcy Services in Albuquerque and Throughout New Mexico

Consult with an experienced and competent Albuquerque Chapter 7 lawyer if you have found yourself overwhelmed with debt. Bankruptcy attorney, Grieta Gilchrist, can review the details of your situation and recommend the ideal course of action to resolve your debts and tend to your current bills.

Gilchrist Law Firm, P.C., is a woman-owned firm that provides Chapter 7 bankruptcy services to individuals in the Albuquerque, Rio Rancho and Santa Fe Metro areas. We regularly represent clients in Chapter 7 proceedings and we provide our clients with well-informed representation and dependable service. If you are considering personal bankruptcy, we will work closely with you to protect your financial future.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is the most straightforward and the most common form of bankruptcy. It is what most people think about when they consider bankruptcy. You will often see Chapter 7 bankruptcies referred to as “liquidation bankruptcy.” The idea behind the liquidation bankruptcy is that the individual will sell their unprotected (non-exempt) assets to pay back their unsecured debt. Unsecured debt is debt that is not secured by property; credit cards, personal loans and medical bills are all examples of unsecured debt.

The idea that an individual must sell their assets to pay back unsecured creditors is a confusing one as most individuals considering bankruptcy do not have assets to sell or have already sold the assets they have. However, it is only the assets that are unprotected, or non-exempt, that can be sold. The bankruptcy code, fortunately, does not want to strip debtors of all their things. So, under bankruptcy law, things like your personal property, vehicle, and equity in your house are protected, or are exempt from the bankruptcy process.

Not everyone is eligible for a Chapter 7 bankruptcy. To qualify for a chapter 7 bankruptcy, your income must be less than the median income for a household of the same size in the State of New Mexico. If your household income exceeds this amount, you may still qualify for a Chapter 7 if you can pass the “means test” or that you do not have sufficient disposable income to pay back your debts.

If you qualify for a Chapter 7 bankruptcy, then most – but not all – of your unsecured debts will be discharged – or eliminated. Credit card debt, personal loans, medical bills, payday loans, collection accounts and deficiency amounts from repossession of a vehicle or a foreclosure of house will most likely be discharged in a Chapter 7 bankruptcy. Student loans, most taxes, domestic support obligations (alimony or child support) and criminal fines are not dischargeable, or eliminated.

But what about my property? Will I be able to keep my car or my house?

As discussed above, only your non-exempt assets can be sold to pay back your unsecured creditors. Most property can be protected, or exempted in a bankruptcy filing. However, it is important to list all of your property or it may lose that protection. It is important to let your attorney at Gilchrist Law Firm, P.C., know about your assets as well so that she can properly analyze which exemptions to use to provide the maximum protection.

In New Mexico, debtors are allowed to use either New Mexico state exemptions or the federal bankruptcy exemptions. There are pros and cons to using each one and deciding which one to use depends on a variety of factors, such as whether you own a house and how much equity is in your house. If you do not own a home, it is usually better for the debtor to use the federal bankruptcy exemptions.

The federal “wildcard” exemption can protect personal property with a value up to $25,000.00. This wildcard exemption can be used to protect tax refunds, cash on hand, or cash in the bank. You may be able to keep your property while filing for a Chapter 7 bankruptcy, but it is important that you let your attorney at Gilchrist Law Firm, P.C. know about all of your property so that they can analyze the various options available.

Vehicles are also exempted under the New Mexico exemption statute as well as the federal bankruptcy statute, but only up to the amount of $4,000.00 In most Chapter 7 bankruptcies, debtors are able to keep their car but it depends again on the amount of the equity in the vehicle as well as the exemptions used based on all of your property.

Finally, most debts secured by property, such as a mortgage or an auto loan, will continue through the bankruptcy unchanged. It is important that you keep paying on those loans unless you want to “surrender” the property. When you surrender the property, you essentially give it back to the lender and any amount that is still owed (a deficiency) is discharged in the bankruptcy. When you meet with us, we will walk through the options regarding your secured loans.

The Bankruptcy Process

The first step in deciding whether a Chapter 7 bankruptcy is the right option for you is to contact us and schedule a free case evaluation. If it looks like a chapter 7 bankruptcy may be an option for you, we then enter into an attorney-client agreement, request that you do some “homework” as well as complete a credit counseling course. The homework is a request for your financial information.

We need to review your income (6 months worth), bank statements, your household expenses, your unsecured and secured debt as well as any information relating to prior property sales or large payments made to creditors. This is information that we need to provide in the bankruptcy petition and schedules to the bankruptcy court and to make the job as easy as possible for the trustee who is reviewing your bankruptcy.

Once we have prepared the paperwork and you have completed the credit counseling course (required for all filers), we file your paperwork. At this point, the automatic bankruptcy stay starts. Creditors cannot call you or contact you. They cannot continue with any collection activity. This stay remains in place throughout the Chapter 7 bankruptcy. About 30 days after we file your case, a meeting of creditors (or a 341 meeting) is held.

At the meeting of creditors, the trustee will ask you under oath about the information provided in your petition and schedules. This is a lot less scary than it sounds and we will be there with you at the meeting. After the meeting, the order discharging your debts is entered about 75 days after the creditors meeting. Depending on how fast you are able to get the homework and credit counseling, your case from start to finish will last between 4-6 months.

FAQs

Q: What Does It Mean to File for Chapter 7 Bankruptcy?

A: Declaring, or filing for, bankruptcy is typically the last option for individuals unable to resolve their debts. This legal process allows a person (or a company) to effectively start over financially when having significant difficulty in repaying debt.

One way to accomplish this is by eliminating some or all debts, which is what a Chapter 7 bankruptcy entails. This type of bankruptcy is the most straightforward approach, often referred to as liquidation or a “fresh start” bankruptcy.

Q: What Are the Exemptions for Chapter 7 in New Mexico?

A: Bankruptcy exemptions are assets protected from being sold to pay off creditors. New Mexico citizens can choose between state or federal exemptions, depending on what may be most beneficial.

State bankruptcy exemptions include a homestead worth up to $150,000, household goods up to $75,000, up to $5,000 worth of jewelry, up to $10,000 worth of vehicles, personal property up to $15,000, up to a week’s worth of minimum wage, and up to $15,000 in the tools of your trade, and more.

Q: What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

A: The main difference between Chapter 7 and Chapter 13 bankruptcy is the manner through which the debtor seeks some relief from their debt. Chapter 7 entails discharging qualifying debts and paying off the rest by liquidating your nonexempt assets while Chapter 13 is the restructuring or reorganization of your debts, allowing you to make smaller payments over a longer period of time in order to pay off an outstanding debt.

Q: What Are the Downsides of Filing for Bankruptcy?

A: As with any legal matter, there are potential disadvantages that may come when filing for bankruptcy so it’s important to consult with an experienced lawyer so you understand all implications and possible issues that may arise before deciding that the pros outweigh the cons.

Downsides to bankruptcy include the lowering of your credit score for several years after the fact, you may lose some of your unprotected assets, and having to wait several years before being eligible for bankruptcy again.

Q: What Debts Can Be Gotten Rid of in New Mexico?

A: If eligible and filing for a Chapter 7 bankruptcy in New Mexico, the court may choose to discharge your debts if the statute of limitations has passed, the debt is below a certain amount, or the liability otherwise qualifies for dismissal. This may include debt from your medical bills, credit cards, foreclosure or repossession deficiencies, lawsuits, missed rent or mortgage payments, and other debts.

Bankruptcy Attorney Grieta Gilchrist Can Help

Gilchrist Law Firm, P.C., has helped numerous clients get out of overwhelming debt or into a stronger financial position. Our team can determine if bankruptcy is the right option for you and guide you throughout the process. If you are interested in learning more, contact us here and we will set up a free evaluation.