New Mexico Bankruptcy Laws

Americans, historically, have been endowed with a proud and time honored tradition of pioneering enterprise through industry and productive risk taking. It has been our national birthright to be rewarded, by virtue of strident resolve and venture, the freedom to invest and partake in a burgeoning economic future and a real promise of prosperity. It is a national legacy and a matter of course that one’s faith in the strength of our economic system both nationally and within the state of New Mexico could actualize ideals of not only attainment and success, but also guaranteed a level of security. Should the consumer’s aspirations befall hindrances and veer off course, resulting in financial struggles, the effective means of recovery were available to one and all. The recourse a bankruptcy petition offered debt holders has been relied upon by generations of New Mexico residents in need of sanctuary during hard times, a system which was originally designed to protect house, home, and earnings. Modern times, unfortunately, reflect a different reality marked by resounding organizational changes across every facet of the business of finance, credit and revenue. The distribution of wealth is becoming increasingly unbalanced while unemployment rates in our state and the country rapidly rise along with the cost of living. The average citizen, lulled into an sense of security by now forgone patterns of unchecked progress, find themselves, in ever greater numbers, unprepared for the consequences of the swelling tempest and its resultant, unyielding conditions. The ease of borrowing on credit has become a dangerous drawback in the wake of skyrocketing interest rates, precluding, in many cases, opportunity and growth, much less the potential of repaying the obligations to the avaricious credit companies. Further complicating the issues surrounding the debt ridden are the recent fundamental changes to federal bankruptcy laws, alterations which could potentially seriously diminish one’s ability for fiscal recovery, and incur irrevocable losses to the New Mexico borrower in search of a debt relief resource.

Even clerical mistakes such as misspelling the name of a creditor or providing an incorrect address (or, most damning, an incorrect social security number) could come back to haunt New Mexico borrowers filing for bankruptcy. The accuracy of the data entered within the bankruptcy petition should be a paramount concern. No borrower wants to see their bankruptcy declaration rendered null and void days before the full discharge of all unsecured debts because a New Mexico court clerk realized that one relatively minor aspect of the paperwork was improperly recorded.

In the twelve months prior to the formal declaration of bankruptcy – the moment, after first taking and passing a government mandated credit counseling class, that the borrowers deliver their paperwork along with a two hundred and ninety nine dollar money order (cash nor credit nor personal checks are accepted) to their New Mexico county clerk – debtors must be extremely careful about how they spend their money. Logical enough that the soon to be bankrupt should not make any extravagant purchases or attempt to hide their money in various accounts or investments as most borrowers should figure out for themselves. The professional debt analysts employed by the state of New Mexico to check bankruptcy petitions shall find even the most carefully hidden assets, and attempts to defraud the government would be a monumentally foolish undertaking. However, borrowers intending to file for bankruptcy protection should also be aware of the potentially disastrous consequences that could result from even the most charitable or seemingly harmless actions. Funds given to family members – even Christmas or birthday presents for elderly parents or emergency loans to brothers and sisters fallen upon hard times; even, for that matter, loans repaid to friends and relatives – are viewed with especially harsh suspicion by state authorities, and borrowers who’ve recently gifted a notable amount of money or a particularly generous object to someone in their family may even be encouraged to wait out the appropriate amount of time before filing for bankruptcy just so they won’t be forced to mention the transaction within the Chapter 7 paperwork.

The expertise of trained professionals in such decisions should be considered utterly essential before the New Mexico borrower makes any decisions, of course, but, at the same time, all consumers reading this page who maintain any niggling curiosity about bankruptcy protection as a potential solution for their family’s towering credit obligations should be aware of the repercussions of all financial activities. By filing for Chapter 7 or Chapter 13 bankruptcy, borrowers basically cede control of their household finances to the control of the New Mexico courts – acting under United States Bankruptcy Code specifications designed to limit the ability of the New Mexico trustee to arbiter individual situations and mete out their provisions accordingly – and these officials are explicitly given the power to step in and force recipients to relinquish past gifts in order to disperse the money among the creditors affected through Chapter 7 debt elimination bankruptcy. Troubling enough when this applies to commercial lenders or utility companies, but, for family members who’ve already spent the funds given without anticipation of seizure and have no resource in which to satisfy the wishes of the bankruptcy courts, this could be disastrous for the budgets of the borrowers’ loved ones. It’s a matter of fairness, really. The current BAPCPA bankruptcy regulations were erected to prevent debtors from abusing the system to profit themselves at the expense of the rightful lenders, and the trustees have been forcibly conditioned to peer into any transactions that could be considered preferential. Trustees may even look askance at gifting or loaning possessions to friends and family, and that could seriously disturb the New Mexico citizens’ opportunity for a discharge of their appropriate debts. Even if the borrowers believe that the property in question couldn’t possibly be thought valuable, that formal estimation shall have to be made by the trustee, and agents of the court could force reclamation of the possessions for eventual auction.

If this needs to be said, New Mexico residents filing for Chapter 7 bankruptcy should take the same care listing all of their debts including even those (like student loans) that are not covered under bankruptcy protection and those (like home mortgages) that they very much want to let alone. No matter how small the debt, there’s no reason for New Mexico borrowers to avoid mention in the bankruptcy paperwork – it certainly won’t make any difference to the borrowers credit after there’s a bankruptcy on record – and, worse yet, leaving one of the lenders off the list may call the entire bankruptcy declaration into question by the judgment of the New Mexico courts. Many borrowers ignore documenting the debts that appear on credit reports as having been officially charged off, but that’s only a representation of the lenders’ contention that the loans will never be repaid in order to carve out a hefty tax break: all charged off obligations are still legally valid and could be re-sent to collection at any time. Better to just submit every single bill owed by the household for New Mexico trustee perusal or, at the least, explain every one to the attorneys involved in the bankruptcy declaration. Particularly venal creditors, upon recognition of their clients’ interest in Chapter 7 debt elimination bankruptcy, may even proclaim over the phone that all debts have been wiped clean just so the borrowers do not bother to even list the accounts upon the petition. Make no mistake, the lenders will start back up with the phone calls and threatening letters and, for especially large sums, legal suits after the official discharge of those debts originally notated has been entered into the public record. Residents of New Mexico petitioning for bankruptcy should identify every potential claim and estimate the funds that were owed if the lender delegates would not play ball.

Even in the best of circumstances, when New Mexico borrowers work with the finest attorneys available for their budgets and their particular financial household scenario fits perfectly within the limited constraints of the bankruptcy code as it now stands, efficiently discharged debts shall still pretend that they never received notice of the debts and require the former borrowers or their legal counsel to provide evidence of the bankruptcy discharge (if needs be said, borrowers must make sure that they maintain copies of all necessary documents for years following the end of the bankruptcy proceedings).

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