New Mexico bankruptcy help, with your situation in view.
If debt payments, a collection lawsuit, or a garnishment have become difficult to manage, start by understanding your options. Asa King can assess whether Chapter 7 or Chapter 13 fits, or whether filing makes sense at all.
Request a free consultation Call (870) 212-4700
New Mexico cases are filed in the U.S. Bankruptcy Court for the District of New Mexico, a single district for the whole state. Asa King handles New Mexico matters remotely from Arkansas: consultations, document review and petition preparation are by phone and video, and New Mexico clients pay the same published fees, confirmed in a written agreement before any work begins.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Attorney advertising. Contacting this office does not create an attorney–client relationship; representation begins only when a written agreement is signed.
Know the fee before you decide.
Chapter 7: $1,500 attorney fee for a standard consumer case, individual or joint, due before filing, plus the $338 court filing fee. Chapter 13: $3,500 attorney fee; $1,500 plus the $313 court fee before filing, and the $2,000 balance through the plan, subject to court approval. The attorney fee covers the two required courses. Every fee is confirmed in a written agreement; work outside the standard scope is billed separately.
How much does it cost to file Chapter 7 bankruptcy in New Mexico?
The standard attorney fee in this practice is $1,500 for a Chapter 7 case, individual or joint, due in full before filing, plus the $338 court filing fee, which is a federal fee and the same in every state. The attorney fee covers the petition and schedules, the means test, the §341 meeting of creditors, standard amendments, reaffirmation agreements and the two required courses, which our office arranges through an approved provider; adversary proceedings, contested motions, conversion and appeals are billed separately, and every fee is confirmed in a written agreement before any work starts. The court can allow the filing fee to be paid in installments. An individual Chapter 7 filer may ask the court to waive the filing fee if household income is below 150% of the applicable poverty guideline and the fee cannot be paid even in installments. The court decides whether to grant the waiver. Chapter 13 is a $3,500 attorney fee, with $1,500 plus the $313 court fee before filing and the balance paid through the plan, subject to court allowance.
Will I lose my house or my car if I file bankruptcy in New Mexico?
Chapter 7 can eliminate many unsecured debts. Some debts survive bankruptcy, and property protection depends on exemptions, equity, liens and your circumstances. New Mexico lets a filer use either the New Mexico exemptions or the federal bankruptcy exemptions. Under the New Mexico list, the homestead exemption protects $150,000 of home equity per owner, so a couple who own their home together can generally protect $300,000, and the motor-vehicle exemption protects $10,000 of equity per person; household goods, tools of the trade, retirement accounts and other items have their own limits, and the legislature adjusts the figures from time to time. If you are current on the mortgage or car loan and your equity fits within the exemptions, you can usually keep the property and continue paying for it. Asa reviews your equity and lien picture before recommending a chapter or an exemption list.
How long does Chapter 7 take in New Mexico, and what does the process look like?
Usually about three to five months from filing to discharge, with a few weeks of preparation before that. It starts with a free 20-minute consultation by phone or video, where Asa reviews your income, debts and property and tells you which path he would recommend. If Chapter 7 fits, you complete a short online credit-counseling course, send in pay stubs, tax returns and account statements, and go over the petition with Asa before it is filed in the District of New Mexico. About a month after filing you attend the §341 meeting of creditors with the trustee; Asa appears with you, and the District of New Mexico currently holds these meetings by video on Zoom. If nothing is contested, the discharge order usually follows about two months later, after you finish the second course on personal financial management.
Does filing bankruptcy stop wage garnishment in New Mexico?
Filing bankruptcy generally creates an automatic stay that pauses many collection lawsuits, wage garnishments and collection efforts. Exceptions and repeat-filing rules apply; we review what protection is available in your situation. Even before any filing, New Mexico law limits a garnishment for ordinary consumer debt to the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 40 times the federal minimum hourly wage, a larger protected cushion than the federal rule, so a garnishment taking more than that is worth having checked. Garnishments for child support and certain tax debts follow different rules, and if you had a bankruptcy case dismissed within the past year the stay may be limited or may need to be extended by the court, so tell Asa about any prior filing at the first conversation.
I'm married. Does New Mexico's community property law pull my spouse into my bankruptcy?
It matters, but it does not force your spouse to file. New Mexico is a community property state: debts taken on during the marriage are generally community debts even if only one spouse signed, and community property, including both spouses' wages, can be reached for them. When one spouse files alone, the discharge protects the community property from creditors on the discharged community debts, while the non-filing spouse's separate property stays outside the case and can still be pursued for debts that spouse is personally liable on. Whether to file alone or jointly depends on which debts are community, which are separate and what each of you owns, and it is one of the first questions Asa works through in the consultation.
Can bankruptcy discharge medical debt in New Mexico?
Medical bills are generally dischargeable. They are unsecured debt with no special protection in bankruptcy, so a Chapter 7 discharge treats a hospital bill the same as a credit card balance, whatever the amount. Some medical debt may not call for a bankruptcy at all: New Mexico's Patients' Debt Collection Protection Act bars providers and their collectors from pursuing collection, including lawsuits, garnishment and liens, against patients whose household income is at or below 200% of the federal poverty guidelines, and nonprofit hospitals must offer financial assistance. Asa checks whether those protections apply before treating medical bills as a reason to file.
What is the difference between Chapter 7 and Chapter 13?
Chapter 7 can eliminate many unsecured debts, such as credit cards, medical bills and personal loans, in a matter of months, and it is the usual fit for people whose income is at or below the New Mexico median for their household size and whose property fits within the exemptions. Chapter 13 is a three-to-five-year court-supervised repayment plan. It is the tool for catching up missed mortgage or car payments to stop a foreclosure or repossession, for keeping property a Chapter 7 trustee might sell, and for dealing with debts Chapter 7 cannot discharge, such as recent taxes or support arrears. Which chapter fits depends on income, property and what you are trying to protect, which is what the consultation sorts out.
What is the means test, and will I pass it in New Mexico?
The means test compares your household's average income over the past six months to the New Mexico median for a household your size. Income at or below the applicable state median usually means you do not need the second means-test calculation. It does not automatically establish Chapter 7 eligibility. Above-median income does not automatically rule Chapter 7 out. Above the median, allowed expenses are deducted and the result decides whether Chapter 7 is presumed abusive; if it is, Chapter 13 usually remains available. Other requirements matter in every case: the credit-counseling course, any bankruptcy case in the past eight years, your property and how the exemptions cover it, and the kinds of debt you have. Many working New Mexico families do pass the means test; it is a calculation worth having a lawyer run before assuming anything.
Which debts does bankruptcy not discharge?
Some debts generally survive bankruptcy: most student loans, recent income taxes, child support and alimony, criminal fines and restitution, debts from fraud or from injuring someone while driving drunk, and any debt you reaffirm. Liens survive too, so a mortgage or car loan has to be paid if you want to keep the property. Most other unsecured debts, including credit cards, medical bills, personal and payday loans, repossession deficiencies and old utility bills, are generally dischargeable. Sorting your debts into these two groups is one of the first things Asa does in the consultation, before you decide anything.
How will bankruptcy affect my credit?
A Chapter 7 case can appear on your credit reports for up to ten years from filing and a Chapter 13 for up to seven, and lenders will see it. How that compares with your situation now depends on what your reports already show: ongoing late payments, charge-offs, judgments and garnishments also affect credit, and after the case the discharged accounts are reported with a zero balance. Rebuilding is possible after a discharge, and many people obtain credit again over time, but nobody can promise a particular score, a particular timeline, or approval for any loan or mortgage. Asa talks through the credit consequences plainly as part of the whole-situation review.
Do I have to go to court?
In a routine case, usually not in front of a judge. New Mexico cases are filed in the U.S. Bankruptcy Court for the District of New Mexico, and the one required appearance in most cases is the §341 meeting of creditors, a short meeting with the trustee rather than a judge, which the district currently holds by video on Zoom; Asa appears with you. A hearing before a judge happens only if something is contested, such as an objection or a motion, and many of those hearings are also held remotely, so living far from Albuquerque is rarely an obstacle. Asa will tell you in advance if your case has an issue that could require a hearing.
Is bankruptcy even the right move, or should I do something else?
Sometimes the honest answer is not to file, or not yet. If your income and property are legally protected from collection, for example Social Security, disability benefits or exempt wages, a judgment against you may be hard to collect, and bankruptcy may not add much. Other times it makes sense to wait, for example because of the timing rules that apply after a prior bankruptcy case. That is why every case here starts with a free consultation that looks at your whole situation, and why Asa's recommendation can be to file now, to wait, or not to file.
If a deadline is close. A garnishment that has already started, a foreclosure sale date, a repossession, or a deadline to answer a lawsuit changes the order of work. Tick the deadline box on the form, or say so when you call (870) 212-4700, so the callback is prioritized. A filing on short notice is sometimes possible once the credit-counseling course is finished and the required documents and fee are in hand, but the earlier you reach out, the more options remain. Fees for every case are set out in a written agreement before any work begins.
Start with a free consultation.
Every case starts with a free 20-minute consultation by phone or video. Asa reviews your whole situation and tells you which path he would recommend, including not filing.
This page is general legal information for New Mexico, not legal advice about your specific situation. Laws, court fees, and exemption amounts change. For advice you can rely on, speak with a licensed attorney. Attorney advertising. Asa King, Attorney at Law, Trumann, Arkansas, is responsible for this content. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.