New Mexico News
| See Attorney Before Filing for Bankruptcy |
| Posted by Peter Phipps (pphipps) on Jun 10 2008 at 7:50 PM |
The mortgage crisis is a massive problem for the economy and for middle America. The mortgage crisis has now expanded into a heightened state of alert for car loans and student loans. Given that Wall Street is taking hundreds of billions in write-downs, big-money will continue to be cautious even if Congress is able to fashion some limited relief.
So what's a guy to do in this time of economic stress? If your situation merits it, call a bankruptcy attorney. I highly recommend that you sit down, face-to-face, and get the facts to determine if this might be a better solution to the financial stress that you are experiencing now or on the horizon.
I stress “on the horizon,” because under the revised bankruptcy law, a potential filer might be wise to make some adjustments before filing. This is a very complicated area and best left to lawyers who actually study court decisions, and not your Jack-of-all trades's brother-in-law.
The major reasons for filing bankruptcy are job loss, cut in pay, divorce, medical bills, the birth of a new child, pay-day loans, repossession, foreclosure, court judgment, gambling, student loans, helping too many relatives with their bills, and the old favorite — credit card debt.
Speaking of credit cards, if you are carrying this type of debt, good luck. The credit card industry uses statistical models to predict your behavior; they have a good idea of what you are going to do, before you do it. Their historical models predict that you will pay them interest and not save for your retirement.
How much debt are you carrying? If your monthly debt payments (excluding mortgage) are more than 10 percent of your take-home pay, you may be headed for thin-ice.
Not sure how much debt you have? As a consumer, you are entitled to one free credit report per year under the Federal Law. Call 1-877-322-8228 or online at annualcreditreport.com (it's free and you are not obligated to “buy” a credit score).
I have found that some clients can handle the pressures of carrying debt better than others, but most clients that I see are sick and tired of the creditor calls to home, work and cell phones. The clients are also anxious and stressed out.
Generally speaking, most clients are able to file a simple Chapter 7 and keep their assets. The New Mexico homestead exemption for equity in a home is $60,000 per owner and $120,000 for a married couple. This was recently increased by the Legislature.
PERA, 401k's, and other standard pension and retirement plans are also exempt. New Mexico law and federal law provide for many other exemptions to protect your assets. Other examples of protected property are worker's compensation benefits, child support, and personal injury settlements. Of course, most exemptions have caps and other limitations, so its best to talk to an experienced lawyer before making any decisions.
How to proceed? Put all your bills into a bag or box and show them to an experienced bankruptcy attorney. Most attorneys will give you a free consultation and will answer your questions. You are under no obligation to file a case and you should not commit to do so at a first meeting. You should take a few days to think it over to determine what's best for you.
I have witnessed that when the bankruptcy is the most logical answer to burdensome debt, that the client is very happy that the US legal system has given him or her a “fresh start” in life.
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