Chapter 7 Bankruptcy New Mexico: 3 Things You Need to Know

Are you facing financial difficulties and considering Chapter 7 bankruptcy in New Mexico? Here's what you need to know before taking the plunge:
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.
  1. Qualification and Cost: Before anything else, determine if you qualify for Chapter 7 bankruptcy and understand the associated costs in New Mexico. Avoid surprises by checking the details here.
  2. Exploring Alternatives: It is often wise to consider alternatives to Chapter 7 bankruptcy. Explore all your options before deciding to help make the most informed decision.
  3. Understanding Chapter 7 in New Mexico: Familiarize yourself with the specific rules and regulations of Chapter 7 bankruptcy in New Mexico. State-specific factors may impact your case, so being informed is crucial.

Chapter 7 bankruptcy is widely used in the United States, including New Mexico. With approximately 1,870 bankruptcies filed in New Mexico in the year ending June 30th, 2021, it's a common choice for individuals seeking financial relief.

For those who prefer visual aids, utilize the New Mexico Chapter 7 Calculator below to estimate your qualifications and costs.

1) How Chapter 7 Bankruptcy Works in New Mexico

How Fast Do You Get Relief in A Chapter 7 Bankruptcy in New Mexico

In New Mexico, a no-asset Chapter 7 case typically concludes in about 120 days, from beginning to end. When we say "no-asset" bankruptcy, we mean you don't possess high-value assets like expensive houses or properties surpassing New Mexico bankruptcy exemptions. Therefore, your bankruptcy case could be resolved relatively quickly if you find yourself without surplus assets.

How Much Does It Cost To File Chapter 7 Bankruptcy in New Mexico?

The cost of filing for Chapter 7 bankruptcy nationwide typically ranges from $500 to $3000. However, it's important to note that the cost may vary in New Mexico.

Even within New Mexico, the cost of Chapter 7 bankruptcy can differ depending on where you file. For instance, if you're filing in Rio Rancho instead of Las Cruces, you might end up paying a bankruptcy attorney fee of $1,250 in Rio Rancho, while in Albuquerque, the fee could be $1,500.

Furthermore, there are situations where the bankruptcy filing cost can be reduced through a filing fee waiver. It's worth exploring the New Mexico filing fee waiver information to see if you qualify for this option.

So, How Do I Qualify For Chapter 7 Bankruptcy in New Mexico?

To assess your eligibility for Chapter 7 bankruptcy, reviewing the Chapter 7 Bankruptcy New Mexico Income Limits is essential. This evaluation, known as the means test, decides whether you qualify for a bankruptcy discharge, which means your debts will be forgiven.

If you pass the means test, Chapter 7 can address most of your unsecured debts. Unsecured debts are those without collateral, including medical bills, personal loans, certain old income tax debts, past utility bills, credit card debts, and most personal judgments.

What about secured debts in Chapter 7?

If you seek to eliminate secured debts like car loans and mortgages, Chapter 7 bankruptcy could still provide a solution. However, you'll need to surrender the asset to the creditor, who will then regard it as full payment for your outstanding debt.

IMPORTANT: Chapter 7 Qualification via New Mexico Means Test

An essential part of filing for bankruptcy relief is the Bankruptcy Means Test. It's a form that compares your average monthly and yearly income to the income of other households in New Mexico.

If your income is lower than the median income in New Mexico, you might be able to get a bankruptcy discharge under Chapter 7. To see if you qualify, use the free New Mexico Chapter 7 Bankruptcy Means Test Calculator below. Just click the link, and it'll take you to the calculator.

Help! My Income Exceeded The Chapter 7 Means Test Allowable in New Mexico

If your income is higher than the average income in your state, you may need to explore the 2nd part of the Means Test. You can check out this helpful resource: passing the Chapter 7 means test when income exceeds the median.

Chapter 7 Bankruptcy New Mexico Income Limits

# of PeopleAnnual Income
  • Ten or more: Add $9,000 for each additional individual

Will I lose my belongings if I file Chapter 7 bankruptcy? Understand New Mexico bankruptcy exemptions

In Chapter 7 cases, assets not protected by exemptions may be sold off. One crucial asset for many is their home. In New Mexico, the protection amount depends on your marital status. For single individuals, the homestead exemption is $60,000. For married couples, the protection doubles and is $120,000.

Remember, this information applies to New Mexico, and rules may differ in other states. It's vital to review state-specific bankruptcy exemptions to safeguard your assets effectively—additionally, federal bankruptcy exemptions outlined in the 11 U.S. Code §522 offer further protection. You can find a comprehensive list of federal exemptions on the National Consumer Law Center website.

Chapter 7 Bankruptcy New Mexico Pros and Cons


  • Quick discharge: In approximately 120 days, you could become debt-free and start anew.
  • Property protection: Meeting exemption criteria in Chapter 7 bankruptcy might allow you to retain a significant portion of your personal property.
  • Halt to debt collection actions: Filing triggers an automatic stay, stopping legal actions against you, including creditor communications.
  • Resolution of loan deficiencies: Bankruptcy could relieve you of owing more on loan than the collateral's value.


  • Income eligibility requirements: Specific income criteria must be met to qualify for Chapter 7 bankruptcy.
  • Risk of losing assets: If your assets surpass exemption limits, you may need to surrender some property.
  • Adverse impact on credit: Chapter 7 bankruptcy remains on your credit report for ten years, affecting your ability to secure loans or favorable interest rates.
  • Non-dischargeable debts: Certain obligations like student loans and child support payments typically cannot be discharged through Chapter 7 bankruptcy.

2) Alternatives to Chapter 7 Bankruptcy in New Mexico

a) Chapter 13 Bankruptcy in New Mexico

If your income surpasses the Chapter 7 bankruptcy threshold in New Mexico, Chapter 13 bankruptcy presents an alternative for debt relief. Through Chapter 13 bankruptcy, you can restructure your debts into a more manageable monthly payment plan. This restructuring can help you retain ownership of your home and vehicles, halt foreclosure proceedings, and prevent repossessing your possessions. Additionally, it may enable you to reduce outstanding payments for child support, alimony, and car loans.

Can you afford Chapter 13 bankruptcy?

If you are considering a Chapter 13 bankruptcy, you can use this calculator to help estimate whether you can manage the monthly payment.

b) Debt Settlement

Debt settlement offers an alternative to Chapter 7 and Chapter 13 bankruptcy. With this option, a debt settlement company negotiates a reduced amount on your overall debt, potentially saving you money over time. However, it's essential to weigh its effects on your credit score and conduct thorough research to select a reputable, transparent debt settlement company.

c) New Mexico Debt Management

Another alternative to consider is debt management. Unlike debt settlement, which aims to reduce the total debt owed, debt management focuses on lowering interest rates. These programs typically span 3 to 5 years and may come at a slightly higher cost than debt settlement. Additionally, it's worth noting that not all creditors may be open to working with a debt management company.

However, if you're grappling with significant credit card debt carrying high-interest rates, debt management could reduce those rates by about 10-20%. Over time, this reduction could lead to 30-50% savings on your existing debt, enabling you to repay what you owe more effectively. Assessing your financial circumstances and determining the option that aligns best with your goals is crucial.

d) New Mexico Debt Payoff Planning

Another option to consider is debt payoff planning. While this approach demands effort and discipline, it actively reduces expenses and allocates surplus income toward debt repayment. By implementing a suitable debt payoff plan, you can make consistent monthly strides toward reducing your debt burden. Additionally, as you start paying off debts, you can compound those payments towards the remaining balances, accelerating your progress even further.

3) Specific New Mexico Chapter 7 Bankruptcy Information:

New Mexico Chapter 7 Bankruptcy Credit Counseling and Debtor Education Courses

You must undergo a few courses during the Chapter 7 bankruptcy filing process to qualify for a bankruptcy discharge. These courses are designed to provide insights into your financial situation and potential alternatives to bankruptcy. After filing your case, another mandatory course, the debtor education course, awaits. This course equips you with the skills and understanding to handle your finances more effectively.

To ensure compliance, the United States Trustee's office has endorsed specific companies in New Mexico to administer these bankruptcy courses. You can access a list of these approved companies on the UST website.

New Mexico Chapter 7 Bankruptcy Court Locations

Remembering the 341 meeting(s) of creditors as part of the bankruptcy process is essential. While many of these meetings have shifted to phone or Zoom due to the pandemic, being prepared to attend in person is still crucial. To assist with this, we'll furnish a list of court locations organized by bankruptcy districts in Arizona.

District of New Mexico

Addresses of U.S. Bankruptcy Courts and a Superior Court in different cities across the state:

  1. 333 Lomas Blvd NW, Albuquerque, NM 87102
  2. 421 Gold Ave SW, Albuquerque, NM 87102
  3. 100 N. Church Street, Las Cruces, New Mexico 88001
  4. 106 S. Federal Place, Santa Fe, NM, 87501
  5. 500 N. Richardson, Roswell, NM 88201

Chapter 7 Bankruptcy Trustees New Mexico

If you're looking for a list of Chapter 7 bankruptcy trustees in New Mexico, we'll attach a list below and provide you a link to check it out here.

  • Clarke C. Coll: (575) 623-2288
  • Yvette J. Gonzales: (505) 771-0700
  • Edward A. Mazel: (505) 433-3097
  • Philip J. Montoya: (505) 244-1152


After learning about Chapter 7 bankruptcy in New Mexico, you may feel more knowledgeable about its requirements and possible alternatives. If you're curious about whether you qualify and the potential costs, give the Chapter 7 bankruptcy means test calculator below a try.

Look at our comprehensive guide to delve deeper into the Chapter 7 bankruptcy process.

Additionally, if you're looking to save on attorney fees and are open to handling some of the process, even an article on filing bankruptcy without an attorney would be helpful. You can access it here: filing bankruptcy without an attorney.

More News Stories

April 6, 2024
Georgia Bankruptcy Means Test and Income Limit 2024

Just a quick heads up: We are all about providing information, not legal advice. We're not attorneys, but if you want to chat with a bankruptcy attorney in your city, they've got a free consultation waiting for you.

Read story
April 6, 2024
Colorado Bankruptcy Means Test and Income Limit 2024

Just a quick heads up: We are all about providing information, not legal advice. We're not attorneys, but if you want to chat with a bankruptcy attorney in your city, they've got a free consultation waiting for you.

Read story
April 6, 2024
Tennessee Bankruptcy Means Test and Income Limit 2024

Just a quick heads up: We are all about providing information, not legal advice. We're not attorneys, but if you want to chat with a bankruptcy attorney in your city, they've got a free consultation waiting for you.

Read story