Bankruptcy Chapter 7
A New Mexico Chapter 7 Bankruptcy, also known as liquidation, was established for individuals. If filed and completed a Chapter 7 results in a discharge for most debts. A discharge is the final court order eliminating those debts and also operates as a protection for the debtor which prevents the creditors from taking any steps to collect those debts listed on a Chapter 7 Bankruptcy. All debts cannot be discharged in a Chapter 7 Bankruptcy, for example: taxes, in most cases, child support, divorce property settlement debts, student loans and government or court ordered fines. In addition, debts incurred as a result of injuries you may have inflicted upon someone else while intoxicated or intentional acts which have inflicted injuries upon anyone cannot be discharged in a Chapter 7 Bankruptcy. Any debts you incurred through fraud or deception cannot be discharged in a Chapter 7 Bankruptcy. Cash advances and purchases of luxury goods immediately preceding a Chapter 7 may not be discharged in a Chapter 7 Bankruptcy.
Once a Chapter 7 is filed an automatic stay is effectuated. This acts as an immediate prohibition against all creditors from taking any further acts whatsoever to collect their debts. Any creditor who wishes to proceed against you must obtain the permission of the bankruptcy court by filing a motion in New Mexico Bankruptcy Court. A hearing will sometimes be held to determine whether the automatic stay should remain in effect.
In New Mexico, Chapter 7 Bankruptcy is designed and intended to treat all creditors fairly and equally, this can only be accomplished with full disclosure of all financial information including tax information. A discharge may be denied if a debtor conceals or destroys property, alters, destroys, conceals, or falsifies records. A Debtor should include all debts on their Chapter 7 Bankruptcy Petition. The accuracy of financial information as well as income and expenses is essential to the discharge of Creditors in a Chapter 7.
Not everyone is eligible for a Chapter 7 Bankruptcy in New Mexico. Some instances that will prevent a person from filing a Chapter 7 Bankruptcy case in New Mexico are:
- When a debtor has had a prior bankruptcy case dismissed in the last 180 days for willful failure to obey a court order,
- When a debtor requested their case be dismissed in last 180 days and a creditor filed a Motion For Relief From Stay,
- When a debtor has received a discharge in a prior Chapter 7 case in last 8 years or received a Chapter 13 discharge in last 6 years( unless the debtor paid unsecured creditors at least 70% through the best efforts of your Chapter 13 plan)
- When a debtor’s income is too high with respect to the B22 means test as mentioned previously.
Chapter 7 bankruptcy requires the help of a qualified New Mexico Bankruptcy Attorney. Contact us now for a free 10 minute evaluation to see if a New Mexico Chapter 7 Bankruptcy is the right choice for you. A qualified New Mexico Bankruptcy Lawyer can help. Contact us today to determine whether Chapter 7 Bankruptcy is an option for you.