There are some people who think that bankruptcy is a four-letter word, but it is not. Federal law recognizes that there is little chance for some people to ever be able to get out of debt, and bankruptcy is the way they can get a fresh start. In 2020, more than 2,300 New Mexico residents took advantage of the opportunity, filing for Chapter 7, 11, or 13 bankruptcy.
The weight of debt is oppressive. You can second-guess every decision you ever made about spending the money you have, spending the money loaned to you by others, and incurring sometimes unavoidable bills. When that weight becomes too much to bear and you see no other way to get out from under it, we should talk.
At the Law Office of Jason Cline, I represent people who have found themselves in the same situation. They live in Albuquerque, Rio Rancho, Santa Fe, Los Lunas, and in other New Mexico communities. They have asked me for help and I have been pleased to provide it. Everyone is entitled to a “do-over.”
Tools are implements, and “to implement” means to use or put into action. Bankruptcy is a tool specifically designed for people to eliminate or restructure major debt to provide financial relief. However, it will not help unless you put it to use.
Delaying the filing of bankruptcy merely adds stress to your life and your relationships. Bankruptcy serves an important purpose for thousands of people every single year.
There are different types or “chapters” of bankruptcy. Among them are Chapter 7, Chapter 11, and Chapter 13.
Chapter 7 bankruptcy discharges most unsecured debt, which is debt not secured by collateral. Only those whose gross income is lower than the median income for the State of New Mexico qualify to file for Chapter 7 relief. You may not be able to retain your auto or home under Chapter 7. Whether you can protect some or all of your equity in your home will depend on where you fit under New Mexico’s Homestead Exemption law. Chapter 7 does not discharge debt such as back child support or alimony or most student loan or tax debt.
Chapter 11 bankruptcy is designed for businesses operated as sole proprietorships, corporations, or partnerships. It reorganizes tax, secured, and unsecured debt to make repayment more manageable rather than discharging debt. In most situations, Chapter 11 will allow the business to continue operating and even borrow money to keep the business afloat. If the corporation is the debtor, Chapter 11 does not put shareholders’ personal assets at risk.
Chapter 13 bankruptcy is the option for individual wage earners who don’t qualify for Chapter 7 relief. Rather than being discharged, debt is restructured, often with creditors agreeing to reduced sums, and the filer repays the debt over a specific period of time. Because you are restructuring rather than discharging debt, you can protect your secured debts, such as your home and auto.
The different types of bankruptcy all provide debt relief; however, the extent to which they do and how they work differ. How declaring bankruptcy may affect you over the long term also differs by type. For example, a Chapter 7 bankruptcy will affect your credit score for a longer period than a Chapter 13 bankruptcy will.
Filing for bankruptcy is rarely an easy decision for people to make. There are many factors to consider, based on your unique financial and employment situation. I can help you explore all the options, discuss the ramifications of filing, and help you determine which bankruptcy chapter is best for you and your circumstances.
Deciding to file for bankruptcy may be the wisest financial choice you can make. It is there to help free people from crushing debt. If you need relief, you need to take advantage of the option. I can help you, just as I have helped others struggling with debt in Albuquerque, New Mexico and throughout the state. I invite you to take advantage of my bankruptcy knowledge, legal experience, and client advocacy. Call the Law Office of Jason Cline today.