What Can Be Forgiven in Bankruptcy in New Mexico?

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If you or someone you know has filed for bankruptcy, it can be a difficult process. Bankruptcy can be intimidating, and you may be left wondering what the legal process looks like and who you should talk to. There can also be many personal and legal questions to sort through. One of the most pertinent questions that you may have concerns about is, “What can be forgiven in bankruptcy in New Mexico?”

Unsecured Debt

If you file for bankruptcy in New Mexico, you could eliminate your outstanding credit card debt and any other unsecured loans. These other unsecured loans can include medical bills, gym bills, overdue utility bills, and personal loans. These forms of debt are unsecured, as there is no collateral attached to them. Unsecured loans often have a higher interest rate.

It is important to consider that student loans are typically not forgiven in most bankruptcy cases. Although the loans are considered unsecured, they are often difficult to have forgiven. If you are anticipating having your student loans forgiven in bankruptcy court, you should engage an experienced bankruptcy attorney who can review your case.

Secured Debt

It is also possible for bankruptcy to eliminate your secured debt. Secured debt is any debt that is secured by an asset. Typically, secured loans can include a mortgage and car payments. If you would like to eliminate a secured loan, then you will likely have to give up the asset as well. For example, if you choose to eliminate your car loan, you will have to also give up your car.

Another example of a secured debt is a home equity line of credit. In this case, the collateral attached to the debt is the debtor’s house.

When you purchase property, you usually voluntarily agree to give the lender a lien on the asset. This is the case for houses, cars, boats, etc. A lien allows the lender to recover the property if you do not pay it. This applies to bankruptcy court as well.

Foreclosures and Evictions

It is also possible for bankruptcy to pause or even stop an eviction or a foreclosure. It is important to understand that if you are in the process of an eviction or foreclosure, a bankruptcy filing may halt the eviction, but it may not completely stop it. In most cases, once the bankruptcy proceeding has been finalized, the eviction process can resume.


Q: What Debt Can Bankruptcy Get Rid of?

A: Filing for bankruptcy in New Mexico could get rid of credit card debt, medical bills, personal loans, overdue utility payments, and, in some cases, even a mortgage or car payment. It is important to note, however, that if you do choose to eliminate your mortgage payment or car payment, you will likely have to give up your house and car. A mortgage and a car loan are considered secured loans. This means that the loan is secured by the asset.

Q: What Items Cannot Be Discharged Through Bankruptcy?

A: Items that cannot be discharged through bankruptcy are considered nondischargeable debts. These nondischargeable debts can include domestic support debts and certain taxes. Also, student loans can be difficult to discharge as well.

Domestic support debt that is not dischargeable can include spousal support, or alimony, and child support. It’s also likely that judgments for damages from drunk driving accidents won’t be dischargeable. However, dischargeable and nondischargeable debts could vary depending on the type of bankruptcy you file.

Q: What Are Three Assets That Are Not Seizable in Bankruptcy?

A: Three assets that are not seizable in bankruptcy could include your car, your house, and any necessary medical supplies. The rationale is that you may need your car to drive to work, the grocery store, the hospital, etc. You need your house to live in, and you may need the applicable household goods and appliances in the home. You may also need the necessary medical supplies to sustain your life. There are a few other assets that may be exempt from bankruptcy seizure.

Q: How Often Are Bankruptcies Denied?

A: It is not uncommon for a bankruptcy claim to be denied. Bankruptcy claims can be denied for a variety of reasons. A claim could be denied due to improper filing, filing too soon, dishonesty or fraud, or the failure to pay the necessary court fees. One way to help ensure that your bankruptcy claim is not denied is to engage the help of an Albuquerque bankruptcy lawyer. An experienced bankruptcy attorney can help review your situation and provide the proper legal advice that you need.

Q: How Is Chapter Seven Bankruptcy Different From Chapter Thirteen?

A: The main difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy is that Chapter 7 is more straightforward, while Chapter 13 is more of a repayment plan. Chapter 7 may focus more on the assets that you own, exclude the exempt assets, and discharge your debts. Chapter 13 creates a type of repayment structure around your secured debt and may discharge more of your unsecured debt. You should speak with an attorney to understand which option may be suitable for you.

Legal Experience You Can Count On

Bankruptcy can be a difficult process for anyone involved, and it can often leave debtors with many questions. It is important that you engage the help of a qualified bankruptcy attorney who has experience in helping clients go through the bankruptcy process. There can be strict filing requirements and legal deadlines that must be met under New Mexico state law. Having an experienced attorney on your side could make all the difference in your case.

At Gilchrist Law Firm, P.C., our legal team has a demonstrated history of helping individuals across the state of New Mexico successfully resolve their bankruptcy cases. Our team can provide the dedication, determination, and passion necessary to help you during your case. If you have filed for or are expecting to file for bankruptcy, reach out to our team. We can provide answers to any questions you may have. Contact our office today to see how we can assist you.

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