New Mexico Bankruptcy Exemptions Lawyer

New Mexico Bankruptcy Exemptions Attorney

Falling behind on bills and being in debt isn’t an uncommon experience. However, when you find yourself unable to pay off a significant amount of debt or even make a single payment for your current bills, it’s easy to feel overwhelmed and hopeless. If you are in a similar situation, consider speaking with an understanding lawyer about the legal options available to get you caught up on outstanding debts and your finances.

Qualified and experienced New Mexico bankruptcy exemptions lawyer Grieta Gilchrist is deeply familiar with assisting clients going through financial struggles with filing for and going through the legal process of bankruptcy. Gilchrist Law Firm, P.C., is located in Albuquerque and serves people throughout the state of New Mexico with all law issues regarding bankruptcy exemptions, foreclosure, credit harassment, and estate planning. Our team can provide insightful counsel and protect your rights.

Filing for Bankruptcy in New Mexico

Bankruptcy is a legal process that a person, or business, can take to wipe out most or all of their debts, particularly when the party has a significant amount of financial liabilities. Only the debts that qualify for discharge may be eliminated, such as those whose statute of limitations has passed. Filing for bankruptcy means that a party is requesting the court to provide financial relief when they are unable to pay back their debts or pay their current bills.

Time-Barred Debt and Statute of Limitations on Collection

There are various types of debt— such as a mortgage, utility bills, car payments, student loans, medical costs, etc. —that each have their own statute of limitations (SOL) or are completely independent of a statute of limitations. This means that once the SOL of an unpaid debt has transpired, the consumer no longer has an obligation to pay it off, and legally, creditors are unable to forcefully collect debt from the party, nor can creditors sue for nonpayment.

The statute of limitations is separate from a debt’s credit reporting time, the period of time that a delinquent liability remains on your credit report. It’s important to note that even after the SOL of a particular debt has expired, it’s likely that debt collectors will continue to pursue acquiring payment from you through various collection activities.

Additionally, debt collectors may opt to take you to court despite the statute of limitations having passed on a debt. The creditor cannot win the case if the SOL has passed. However, despite an SOL expiring, you still legitimately owe the debt, and any delinquent accounts will be reported to credit bureaus. The statute of limitations begins when you first miss a payment or upon receiving a demand letter for nonpayment from the creditor.

What Are the Benefits of Filing for Bankruptcy in NM?

Depending on your circumstances, filing for bankruptcy may be among your most advantageous (or only) options in order to get a handle on your outstanding debts and reach financial stability. Be sure to consult with a qualified bankruptcy attorney if you are considering taking the bankruptcy approach so you can find out if you qualify and which type would be ideal for your situation.

If you file for Chapter 7 bankruptcy, you may be able to get rid of the vast majority of your debt and effectively obtain a fresh start. Furthermore, by seeking bankruptcy, debt collectors will no longer call you or take other collection measures once you have filed your case with the court. While your case is open, creditors and collectors cannot contact you, although some exceptions to this include debt from criminal fines, spousal or child support, and delinquent taxes.

Is There Homestead Protection for Debtors in Albuquerque?

Another pro of filing for bankruptcy is that you can protect your home and other personal assets that are exempt from bankruptcy. By filing a Chapter 7 or Chapter 13 bankruptcy, your house will be temporarily protected from foreclosure while you catch up on mortgage payments or other financial liabilities.

Within bankruptcy legal matters, exemptions refer to specific types of real and personal property that are protected from seizure through bankruptcy. This means that the government cannot force you to sell the assets that qualify for exemption in order to pay back your creditors.

Each state has its own guidelines for eligible bankruptcy exemptions, and some states even allow residents to choose between state and federal exemptions, including New Mexico, depending on what would be more beneficial for the individual’s case. For both state and federal bankruptcy exemptions, many assets are only protected up to a point— a standardized price limit. These are some of the exemptions under New Mexico’s bankruptcy legislation:

• Homestead exemption up to $150,000 or $300,000 if the filing party’s spouse died within two years prior to the exemption claim and would have been eligible to claim the homestead exemption. If the state resident does not own a homestead, they may claim up to $15,000 in any real estate or personal property in lieu of the homestead exemption.
• Household goods and furnishings (e.g., furniture, appliances, clothing, electronics, necessary medical equipment, etc.) up to $75,000, up to $5,000 worth of jewelry, up to $2,500 worth of art made by the debtor or their family, up to $10,000 worth of vehicles, and any other personal tangible or intangible property up to $15,000 (up to $2,400 from a depository or investment account may be claimed as exempt).
• Alimony, separate maintenance, or child support up to the extent of what is needed to support the individual or dependent(s) under their care.
• Up to a week’s worth of (state, local, or federal) minimum wage and income otherwise exempt as defined within state legislation, up to $15,000 worth of the tools of your trade or business (necessary professional books, instruments, supplies/materials, inventory, etc.), state and federal refundable tax credits, or stimulus payments.
• Workers’ compensation for illness, unemployment, disability, or workplace incident, Social Security and veteran benefits, payments pursuant to stock bonuses, pension or retirement accounts, or educational and health savings accounts that qualify for federal tax exemption.
• Reparations paid to victims of crime, AFDC (Aid to Families with Dependent Children), Medicaid/Medicare, food stamps, and other general assistance from a government program or benevolent association beneficiary funds up to $50,000.
• The benefits, withdrawal, or cash value (for NM citizen beneficiaries) of life, accident, or health insurance or annuities up to the extent that is reasonably needed to support the person or their dependents.

Federal Bankruptcy Exemptions for New Mexico Residents

New Mexico is one of the states that gives citizens the choice to go by either the exemptions under state legislation or federal guidelines— whichever may be more advantageous depending on the assets a party has and their general circumstances. You can discuss with your bankruptcy lawyer which type of exemptions may be ideal for your situation. These are the current federal exemptions to bankruptcy, which are updated periodically:

• Up to $27,900 worth of your homestead or other real property, one motor vehicle up to $4,450 (double if married and filing jointly), household goods (furnishings, appliances, clothing, etc., up to $700 value per individual item) valued up to $14,875, up to $1,875 worth of jewelry, and “wildcard” exemption (up to $1,475 of any property plus up to $13,950 of any unused value of your homestead exemption).
• Unmatured life insurance policies, if needed for support, life insurance cash, interest or loan valued up to $14,875, life insurance proceeds, loss of future earnings or wrongful death payouts, economic damages from personal injury claims worth up to $27,900 (excluding monetary loss), and compensation received due to being a victim of a crime.
• Prescribed health aids as needed for support.
• Tools of your trade worth up to $2,800, unemployment or Social Security benefits as needed for support as well as veterans’ benefits, public assistance, disability, alimony, and child support payments.
• IRAs, Roth IRAs, Employment Retirement Income Security Act (ERISA) pensions, and 401(k)s accounts: worth up to $1,512,350 retirement accounts exempt from taxation, or retirement funds as defined within the Internal Revenue Code up to $1,512,350.

Types of Bankruptcy in Albuquerque

There are two main forms of bankruptcy a person may file for, depending on their circumstances: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is also known as “liquidation” and entails asking the court to discharge some of your outstanding debts, meaning no party can attempt to collect payment from you. This includes debts such as credit card, medical, and utility bills and missed rent or mortgage payments (protection from eviction or foreclosure not guaranteed).

Chapter 13 bankruptcy is also referred to as debt “restructuring” or reorganization, meaning that your debts won’t be discharged or go away, but instead, a payment plan is created that allows you to make smaller contributions towards paying off your financial liabilities over a longer period of time. This typically involves extending deadlines as well and may reduce the overall amount of debt you owe. The benefit of this bankruptcy is you can keep your assets bought with loans.

Professional Legal Help for Your Debt Issues

Grieta Gilchrist has extensive experience representing New Mexico clients who felt overwhelmed by their degree of debt after falling ill, losing a job, going through a divorce, having poor financial planning, or simply struggling due to the state of the economy. Contact the compassionate and dedicated team at Gilchrist Law Firm, P.C., today to schedule a meeting with a skilled bankruptcy lawyer to discuss the details of your case.