The question pertains to the determination of the homestead exemption amount available to debtors in New Mexico. Under New Mexico law, specifically NMSA 1978, § 39-1-20, the homestead exemption is set at a fixed dollar amount. This amount is subject to periodic adjustment by the legislature. For the period in question, the statutory homestead exemption in New Mexico is \$60,000. This exemption protects a debtor’s principal residence from seizure and sale by creditors in bankruptcy proceedings, provided the debtor meets the residency requirements. The exemption applies to the value of the equity in the home. It is crucial to understand that this is a statutory exemption, meaning it is established by legislative enactment rather than being a constitutional right that might be interpreted differently. The specific amount is a key detail for practitioners advising clients in New Mexico bankruptcy cases.

In New Mexico, as in other states, the determination of whether a debt is dischargeable in bankruptcy is governed by federal bankruptcy law, specifically the Bankruptcy Code. However, state law can influence certain aspects, particularly concerning exemptions and the nature of property. For a debt to be considered nondischargeable, it must fall into one of the categories enumerated in Section 523 of the Bankruptcy Code. These categories include certain taxes, debts for money, property, or services obtained by false pretenses, false representations, or actual fraud, as well as debts for willful and malicious injury by the debtor to another entity or to the property of another entity. In the context of a business owner in New Mexico who misappropriated client funds, the critical question is whether this action constitutes a debt for money obtained by fraud or a willful and malicious injury. Misappropriation of client funds, especially in a fiduciary capacity, is typically viewed as an act of fraud and often involves willful and malicious intent. Therefore, such a debt would likely be considered nondischargeable under Section 523(a)(2) or Section 523(a)(6) of the Bankruptcy Code. The debtor’s intent and the nature of the transaction are paramount. If the misappropriation was intentional and caused harm, it aligns with the criteria for nondischargeability.

The question pertains to the determination of a debtor’s eligibility for Chapter 7 bankruptcy relief in New Mexico, specifically focusing on the application of the “means test” as defined by federal bankruptcy law, codified in 11 U.S.C. § 707(b). The means test is a statutory calculation designed to prevent abuse of the Chapter 7 discharge by individuals with sufficient disposable income to repay their debts through a Chapter 13 plan. For a debtor to qualify for Chapter 7, their income must generally be below the median income for a household of comparable size in New Mexico, or if above the median, they must not have sufficient disposable income after accounting for certain allowable expenses. The calculation of disposable income involves subtracting allowed living expenses and applicable debt repayment amounts from current monthly income. The relevant expenses are outlined in 11 U.S.C. § 707(b)(2)(A)(ii) and (iii), which include national and local standards for food, clothing, housing, utilities, transportation, and healthcare, as well as amounts reasonably necessary for the maintenance or support of the debtor and dependents. Additionally, payments on secured and priority debts are deducted. If, after these deductions, the debtor’s disposable income is below a certain threshold, they may pass the means test. The specific threshold for disposable income, which is not a fixed number but rather a result of the calculation, is crucial. The means test presumes that if disposable income is less than a specified amount, the debtor is eligible for Chapter 7. The core of the means test is the comparison of the debtor’s income against allowable expenses to determine if they have the ability to repay a significant portion of their debts. Passing the means test is a prerequisite for most individual debtors filing for Chapter 7, unless specific exceptions apply. The calculation itself is complex and involves detailed schedules of income and expenses. The correct answer reflects the fundamental principle that a debtor’s ability to repay is assessed through a structured income and expense analysis.

In New Mexico, as in other states, the determination of whether a debt is dischargeable in bankruptcy hinges on specific provisions within the Bankruptcy Code. For debts arising from fraud or false pretenses, Section 523(a)(2) of the Bankruptcy Code provides a framework for non-dischargeability. This section generally requires the creditor to prove several elements: that the debtor made a false representation; that the debtor made the representation with the intent to deceive; that the debtor incurred the debt in reliance on the false representation; and that the creditor suffered damages as a proximate result of the reliance. For a debt to be deemed non-dischargeable under 523(a)(2)(A), which pertains to fraud or false pretenses, the creditor must demonstrate actual reliance, not just justifiable reliance. This means the creditor must show that they actually believed the debtor’s misrepresentation and that this belief was a substantial factor in their decision to extend credit or incur the obligation. The burden of proof rests entirely on the creditor. Therefore, if the creditor cannot establish that they relied on the debtor’s fraudulent statement when extending the loan, the debt would likely be dischargeable. The fact that the debtor may have made a false statement does not automatically render the debt non-dischargeable; the creditor’s reliance is a crucial, independent element that must be proven.

In New Mexico, the concept of “exempt property” is governed by both federal and state law. Debtors in New Mexico can elect to use either the federal bankruptcy exemptions or the exemptions provided by New Mexico state law. The specific exemptions available under New Mexico law are found primarily in the New Mexico Statutes Annotated (NMSA) 1978, Chapter 42, Article 10, which covers exemptions. For instance, NMSA § 42-10-3 details exemptions for homesteads, allowing a debtor to protect a certain amount of equity in their primary residence. NMSA § 42-10-4 provides for exemptions related to personal property, including household furnishings, wearing apparel, and tools of the trade. The Uniform Voidable Transactions Act, as adopted in New Mexico (NMSA 1978, Chapter 56, Article 10), also plays a role in bankruptcy by allowing trustees to recover certain transfers made before the bankruptcy filing that are deemed fraudulent or preferential. When a debtor files for Chapter 7 bankruptcy in New Mexico, the trustee liquidates non-exempt assets to pay creditors. The debtor must carefully select the exemption scheme that maximizes the property they can retain. The question revolves around a debtor’s ability to protect their primary residence in a Chapter 7 bankruptcy in New Mexico, considering the state’s specific homestead exemption provisions and the potential impact of a pre-bankruptcy transfer. The New Mexico homestead exemption under NMSA § 42-10-3 allows a debtor to exempt up to $60,000 of equity in their principal residence. If a debtor has $50,000 in equity in their home and their home is valued at $200,000, they can exempt the entire $50,000 of equity. However, if the equity were $70,000, only $60,000 would be protected by the New Mexico homestead exemption, leaving $10,000 potentially available to the bankruptcy estate. The scenario presented involves a debtor who transferred their home to a trust shortly before filing bankruptcy. This transfer could be scrutinized by the bankruptcy trustee under the Uniform Voidable Transactions Act, specifically looking for badges of fraud or intent to hinder, delay, or defraud creditors. If the transfer is deemed a fraudulent conveyance, the trustee could seek to avoid the transfer and bring the property back into the bankruptcy estate to be administered. The key legal principle here is the trustee’s power to avoid certain pre-petition transfers. The debtor’s filing date is crucial, as is the nature of the transfer and the intent behind it. A transfer made with actual intent to hinder, delay, or defraud creditors, or a transfer for less than reasonably equivalent value while the debtor was insolvent or became insolvent as a result, can be avoided. The question tests the understanding of how a pre-bankruptcy transfer of a homestead might affect the debtor’s ability to claim the New Mexico homestead exemption, particularly when the transfer could be deemed a fraudulent conveyance under state law as applied in bankruptcy. The correct answer hinges on the trustee’s ability to avoid the transfer, thereby bringing the property back into the estate and making the state exemption available for the equity.

The scenario involves a debtor in New Mexico filing for Chapter 7 bankruptcy. The debtor owns a home with significant equity and wishes to retain it. New Mexico allows debtors to utilize either the federal bankruptcy exemptions or the state-specific exemptions. For homestead exemption, New Mexico offers a choice. Under New Mexico law, the homestead exemption is \$60,000 for a single individual or married couple, and \$60,000 for a single individual living separate and apart from their spouse, or a surviving spouse. Additionally, New Mexico offers a “wild card” exemption that can be applied to any property, including the homestead, up to \$10,000. The debtor in this case has equity of \$150,000 in their home. To determine if the debtor can keep the home, we must assess if the equity is fully covered by the available exemptions. The debtor can choose the most advantageous exemption scheme. In this scenario, the debtor can utilize the \$60,000 homestead exemption. The remaining equity is \$150,000 – \$60,000 = \$90,000. The debtor can then apply the \$10,000 wild card exemption to the remaining equity. This leaves \$90,000 – \$10,000 = \$80,000 of non-exempt equity. Since there is non-exempt equity exceeding the available exemptions, this amount would be available to the Chapter 7 trustee for liquidation and distribution to creditors. Therefore, the debtor cannot keep the home free and clear of any claims from the bankruptcy estate without paying the non-exempt portion to the trustee. The question asks about the amount of equity that would be available to the trustee. This is the portion of the equity not protected by exemptions. The total equity is \$150,000. The New Mexico homestead exemption is \$60,000. The New Mexico wild card exemption is \$10,000. The total exempt equity is \$60,000 + \$10,000 = \$70,000. The equity available to the trustee is the total equity minus the total exempt equity: \$150,000 – \$70,000 = \$80,000.

The scenario involves a debtor in New Mexico seeking to reaffirm a debt secured by a motor vehicle. In bankruptcy, particularly under Chapter 7, debtors can choose to reaffirm secured debts, which means they agree to continue paying the debt according to the original agreement. This is governed by Section 524 of the Bankruptcy Code. For reaffirmation agreements to be effective, they must be approved by the court, unless the debtor is represented by an attorney who certifies the agreement is in the debtor’s best interest and does not impose an undue hardship. If the debtor is not represented by an attorney, the court must hold a hearing to determine if the agreement is in the debtor’s best interest and does not impose an undue hardship. New Mexico law, like federal bankruptcy law, does not provide a specific statutory exemption for reaffirmation agreements themselves, but rather focuses on the process and conditions for their approval. The question tests the understanding of the procedural requirements for reaffirmation of a secured debt in the context of a Chapter 7 bankruptcy, specifically when the debtor is represented by counsel. The correct procedure requires the attorney to file a declaration stating the agreement is in the debtor’s best interest and does not create an undue hardship, and the debtor must also file a statement of intention to reaffirm. The court then approves the agreement unless it finds otherwise. The key is the attorney’s certification and the debtor’s intent.

In New Mexico, as in other states, the determination of whether a debt is dischargeable in bankruptcy is governed by federal bankruptcy law, specifically the Bankruptcy Code. Section 523 of the Bankruptcy Code lists various categories of debts that are generally not dischargeable, even in a Chapter 7 bankruptcy. Among these non-dischargeable debts are those arising from certain types of fraud, false pretenses, false representations, or actual fraud, as well as debts for willful and malicious injury. A key element in establishing non-dischargeability under Section 523(a)(2)(B) is the requirement that the debtor made a materially false written statement regarding their financial condition, upon which the creditor reasonably relied. The creditor must also have extended credit on the basis of that written statement. For a statement to be considered “materially false,” it must be untrue in a significant way that would influence a reasonable creditor’s decision. “Reasonable reliance” means the creditor’s belief in the truth of the statement was objectively justifiable. Consider a scenario where Mr. Mateo, a resident of Albuquerque, New Mexico, applies for a significant business loan from a local credit union. In his loan application, which is a written document, Mateo knowingly omits any mention of a substantial outstanding judgment against him for unpaid child support, a fact he believes the credit union would not discover. He also slightly inflates the value of a key piece of equipment he lists as collateral. The credit union, after reviewing the application and conducting a cursory check that does not uncover the judgment or verify the equipment’s exact valuation, approves the loan. Later, Mateo defaults on the loan. The credit union seeks to have the debt declared non-dischargeable in Mateo’s subsequent Chapter 7 bankruptcy filing, arguing that the loan was obtained through fraud based on the written financial statement. For the debt to be non-dischargeable under Section 523(a)(2)(B), the credit union must prove by a preponderance of the evidence that Mateo made a materially false written statement concerning his financial condition, that the credit union reasonably relied on this statement, and that the credit union extended credit based on this reliance. The omission of a significant judgment and the inflation of collateral value, if proven to be material and relied upon, would satisfy these elements. The question of “reasonable reliance” is critical; if the credit union’s review was so superficial that a reasonable creditor would not have relied on the statement, or if the omitted information was readily discoverable through a standard due diligence process, reliance might not be deemed reasonable. However, the code generally presumes reasonable reliance if the statement appears plausible on its face and the creditor undertakes a standard, albeit not exhaustive, review.

In New Mexico, the determination of whether a debt is dischargeable in bankruptcy, particularly under Chapter 7, hinges on specific exceptions outlined in the Bankruptcy Code. Section 523 of the Bankruptcy Code enumerates several categories of debts that are generally not dischargeable, regardless of the debtor’s circumstances. These exceptions are crucial for protecting creditors in certain situations. For instance, debts arising from fraud, false pretenses, or false representations are typically non-dischargeable. Similarly, debts for willful and malicious injury, domestic support obligations (like alimony and child support), and most taxes are also excluded from discharge. Student loans, while often a significant burden, are dischargeable only in very limited circumstances, requiring the debtor to prove “undue hardship” through a separate adversary proceeding. The concept of “undue hardship” is a high legal standard, often interpreted narrowly by courts, and requires demonstrating a present inability to repay the loan, a likelihood of continued inability in the future, and that the debtor has acted in good faith. Without meeting this stringent standard, student loans remain a non-dischargeable obligation even after a Chapter 7 discharge.

In New Mexico, as in other states, the determination of whether a debtor can exempt certain property from their bankruptcy estate hinges on the interplay between federal and state exemption schemes. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) introduced Section 522(b)(3)(B) of the Bankruptcy Code, which allows debtors to elect to exempt property that is either exempt under federal law or exempt under the law of the debtor’s domicile, provided the debtor has resided in that state for at least 730 days (two years) prior to filing. If the debtor has not resided in a state for the full 730 days, they may use the exemption laws of the state where they resided for the 180 days immediately preceding the 730-day period, or if that period is less than 180 days, then the law of the state where they resided for the longest portion of the 180 days prior to the 730-day period. New Mexico has opted out of the federal exemption scheme, meaning debtors in New Mexico must rely exclusively on the exemptions provided by New Mexico state law or the federal exemptions that are not state-specific (like certain ERISA-protected benefits). The New Mexico exemption statutes, primarily found in the New Mexico Statutes Annotated (NMSA) Chapter 42, Article 10, provide a range of exemptions. These include exemptions for homesteads, personal property, and certain types of income. The scenario involves a debtor who has lived in New Mexico for only 15 months. This period is less than the 730-day requirement to establish domicile for the purpose of choosing the exemption scheme of their current state of residence if that state has opted out of federal exemptions. Therefore, the debtor cannot utilize New Mexico’s exemption laws exclusively. Instead, they must look to the exemption laws of the state where they resided for the 180 days immediately preceding the 15-month period in New Mexico, or the longest portion thereof if the preceding period was less than 180 days. If the debtor had resided in Texas for the 180 days prior to moving to New Mexico, and Texas also has its own set of exemptions, the debtor would be subject to Texas exemption law for that portion of the look-back period. However, the question asks about the debtor’s ability to use New Mexico exemptions *at all* given their short residency. Since New Mexico has opted out of the federal exemptions, and the debtor has not met the 730-day residency requirement, they are precluded from using New Mexico’s specific exemption statutes. They would likely be relegated to using the federal bankruptcy exemptions, unless they can establish eligibility under the look-back provisions of § 522(b)(3)(B) concerning a prior state of residence. The critical point is that direct application of New Mexico’s opted-out exemption scheme is not available due to insufficient residency.

In New Mexico, as in other states, the determination of whether certain property is exempt from seizure in a bankruptcy proceeding is governed by both federal and state exemption laws. A debtor in New Mexico can elect to use either the federal bankruptcy exemptions or the exemptions provided by New Mexico state law, unless New Mexico has opted out of the federal exemptions. New Mexico has not opted out of the federal exemptions, meaning debtors can choose between the two sets. The relevant New Mexico statutes for exemptions are primarily found in the New Mexico Statutes Annotated (NMSA) Chapter 42. Specifically, NMSA § 42-10-3 covers homestead exemptions, and NMSA § 42-10-4 addresses other personal property exemptions. The question hinges on the interpretation of “tools of the trade” and the specific limitations placed on such exemptions. New Mexico law, like many jurisdictions, provides an exemption for tools, implements, and books used in a trade or profession. However, the value of this exemption is often capped. For example, NMSA § 42-10-4(A)(3) exempts “tools, implements, and books of any trade, profession or occupation,” but the Bankruptcy Code, specifically 11 U.S.C. § 522(d)(6), provides a federal exemption for “implements, professional books, or tools of the trade of the debtor or of a dependent of the debtor.” While New Mexico debtors can choose federal exemptions, if they opt for state exemptions, they are bound by the state’s specific provisions. New Mexico’s exemption for tools of the trade under NMSA § 42-10-4(A)(3) does not have an explicit dollar cap stated within that specific subsection for the tools themselves, but rather the aggregate of certain other personal property exemptions might be limited. However, the federal exemption for tools of the trade under 11 U.S.C. § 522(d)(6) has a statutory cap of $2,525. When a debtor chooses state exemptions, the state’s specific provisions apply. New Mexico Statute § 42-10-4(A)(3) exempts “tools, implements and books of any trade, profession or occupation.” This exemption is generally interpreted broadly to include items essential for earning a livelihood. The specific question asks about the exemption for a mechanic’s tools. Under New Mexico state exemptions, the exemption for tools of the trade is generally considered to be unlimited in value, provided they are necessary and used for the debtor’s trade. This contrasts with the federal exemption for tools of the trade, which has a specific monetary cap. Therefore, if the debtor in New Mexico opts for state exemptions, the value of the mechanic’s tools, if they are indeed essential tools of the trade, would not be limited by a specific dollar amount under New Mexico state law itself, unlike the federal alternative.

The question pertains to the treatment of certain secured claims in a Chapter 13 bankruptcy proceeding in New Mexico, specifically focusing on the concept of “cramdown” under 11 U.S. Code § 1325(a)(5)(B). This section allows a debtor to keep collateral securing a claim by proposing to pay the holder of the secured claim the present value of the allowed amount of the secured claim. The present value is determined by the interest rate that would allow the creditor to receive the value of the collateral over the life of the plan. New Mexico law, like federal bankruptcy law, does not mandate a specific interest rate for cramdown purposes; rather, it is determined by a “cramdown interest rate” which reflects what a prime rate lender would charge a borrower of similar creditworthiness for a loan secured by the collateral. This rate is often derived from various sources, including national prime rates, but is ultimately a factual determination made by the court based on the specific circumstances. In this scenario, the debtor proposes a plan where the secured claim for the vehicle is paid over 60 months. The creditor’s allowed secured claim is \( \$15,000 \), and the value of the vehicle is \( \$12,000 \). The debtor must pay the creditor \( \$12,000 \) over 60 months. The question implies a need to determine an appropriate interest rate for this secured claim to ensure the creditor receives the present value of the collateral. The Bankruptcy Code does not specify a fixed rate; instead, courts look to the “cost of funds” or a rate that reflects the risk associated with the collateral and the debtor’s creditworthiness. Common methods include using the prime rate plus a risk premium, or rates from similar secured loans in New Mexico. The crucial aspect is that the rate must be sufficient to provide the creditor with the present value of the \( \$12,000 \) collateral, not the full \( \$15,000 \) claim amount, over the 60-month period. The rate should reflect the market conditions for secured lending in New Mexico.

The scenario involves a Chapter 7 bankruptcy filing in New Mexico where a debtor wishes to retain a vehicle encumbered by a purchase money security interest. The debtor has fallen behind on payments. Under the Bankruptcy Code, specifically 11 U.S.C. § 521(a)(2) and § 521(a)(6), debtors in Chapter 7 must either surrender collateral, reaffirm the debt, or redeem the collateral. Redemption, under § 722, allows a debtor to pay the secured creditor the fair market value of the collateral or the amount of the secured claim, whichever is less, in a lump sum. Reaffirmation, under § 524(c), involves an agreement to remain liable on the debt, which must be approved by the court and is subject to rescission rights. Surrender means the debtor relinquishes the collateral to the creditor. Given the debtor’s inability to make payments and the desire to keep the vehicle, reaffirmation is a viable option if the debtor can resume payments, but redemption offers a path to ownership by paying the vehicle’s current value. However, the question implies the debtor cannot afford to catch up on payments or resume them, making reaffirmation unlikely without modification. Redemption is the most direct route to keeping the vehicle if the debtor has the lump sum. If neither reaffirmation nor redemption is feasible, the debtor must surrender the vehicle. The specific New Mexico exemption laws are not directly applicable to the *method* of retaining collateral from a secured creditor, but rather to protecting unencumbered assets. The Bankruptcy Code governs the debtor’s options with secured creditors. The question asks about the *primary* legal mechanism to retain the vehicle while addressing the arrearage. Reaffirmation directly addresses continuing the debt obligation and retaining possession, provided the debtor can demonstrate the ability to make future payments and that the agreement is in the debtor’s best interest and not an undue hardship. This is the most common route for retaining a vehicle with an ongoing loan, even with arrearages, if the debtor can cure the default through the reaffirmation process or demonstrate a plan to do so.

The scenario presented involves a Chapter 7 bankruptcy filing in New Mexico. The debtor, Ms. Anya Sharma, wishes to retain her homestead, which is valued at $350,000 and encumbered by a mortgage of $200,000. She also possesses a vehicle valued at $15,000 with an outstanding loan of $10,000. New Mexico law allows debtors to exempt their homestead up to a certain value. For individuals, the homestead exemption in New Mexico is unlimited in amount, provided the property is occupied as a principal residence. This unlimited exemption applies to the equity in the home. Therefore, Ms. Sharma’s equity in the homestead is \( \$350,000 – \$200,000 = \$150,000 \). Since the New Mexico homestead exemption is unlimited, her entire equity of $150,000 is protected. For the vehicle, New Mexico law provides a motor vehicle exemption of $4,000. Ms. Sharma’s equity in the vehicle is \( \$15,000 – \$10,000 = \$5,000 \). Of this equity, $4,000 is exempt. The remaining $1,000 of equity in the vehicle is non-exempt and would be available for liquidation by the trustee. Thus, the total amount of exempt equity Ms. Sharma can protect is her entire homestead equity plus the motor vehicle exemption, totaling \( \$150,000 + \$4,000 = \$154,000 \). The question asks for the total exempt equity Ms. Sharma can protect.

The scenario involves a debtor in New Mexico seeking to reaffirm a debt secured by a motor vehicle. Reaffirmation agreements in bankruptcy are governed by Section 524 of the Bankruptcy Code. For a reaffirmation agreement to be valid and enforceable, it must meet several requirements, including being made before the discharge is granted. Furthermore, for consumer debts, the agreement must be approved by the court, or if the debtor is represented by an attorney, the attorney must file an affidavit stating that the agreement represents a fully informed and voluntary decision and does not impose an undue hardship on the debtor or a dependent of the debtor. In this case, the debtor’s attorney has filed the required affidavit, and the debtor has indicated their intention to reaffirm the debt. The key consideration is whether the agreement was filed with the court prior to the discharge order. The Bankruptcy Code, specifically Section 524(c), requires that the reaffirmation agreement be filed with the court or made in accordance with subsection (d) before the discharge is granted. If the discharge has already been entered, the opportunity to reaffirm that debt through a standard reaffirmation agreement has passed, and the debt would typically be discharged unless specific exceptions or alternative procedures are followed, which are not indicated here. Therefore, the validity hinges on the timing relative to the discharge order. The correct option is the one that reflects the requirement of filing before discharge.

The scenario presented involves a debtor in New Mexico seeking to discharge a debt incurred through fraud. In bankruptcy, specifically under Chapter 7, certain debts are generally not dischargeable. Section 523(a)(2)(A) of the Bankruptcy Code makes debts for money, property, or services obtained by false pretenses, false representation, or actual fraud, or by an extension of credit obtained by use of a statement in writing respecting the debtor’s financial condition that is materially false, in which such debtor or an authorized agent of such debtor made such statement with intent to deceive the creditor, generally non-dischargeable. The key elements to prove non-dischargeability under this section are: (1) the debtor made a materially false representation; (2) the debtor knew the representation was false; (3) the debtor made the representation with the intent to deceive the creditor; (4) the creditor justifiably relied on the representation; and (5) the creditor sustained damages as a proximate result of the false representation. In this case, the debtor, Mr. Abernathy, misrepresented his company’s financial health to Ms. Cordova to secure a personal loan. Ms. Cordova’s reliance on these misrepresentations, which led to her financial loss, establishes the basis for a non-dischargeability claim. The bankruptcy court would then adjudicate this claim, and if proven, the debt would not be discharged. Therefore, the debt is likely to be deemed non-dischargeable under Section 523(a)(2)(A) of the U.S. Bankruptcy Code.

The scenario involves a debtor in New Mexico filing for Chapter 13 bankruptcy. A key aspect of Chapter 13 is the debtor’s repayment plan, which must be confirmed by the court. Confirmation requires that the plan meet several criteria outlined in 11 U.S. Code § 1325. One such criterion is that the plan must be proposed in good faith and not be made by means of any fraudulent or deceptive practices. Another critical element is that the debtor must commit to paying to the trustee all of the debtor’s projected disposable income for the duration of the plan, which is typically three to five years. Projected disposable income is defined in 11 U.S. Code § 1325(b)(2) as income received by the debtor that is not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation. If the debtor’s income exceeds a certain threshold, the disposable income is calculated by subtracting necessary expenses from the debtor’s income. For a debtor whose income is less than the applicable state median, the disposable income is generally the amount of income that remains after deducting from the amount of the debtor’s projected income the amounts reasonably necessary for the debtor’s maintenance or support and for the debtor’s domestic support obligations. The question probes the debtor’s obligation regarding projected disposable income and the implications of failing to meet this requirement. Specifically, if the debtor’s income exceeds the New Mexico median for a family of their size, the calculation of projected disposable income becomes more stringent, requiring the deduction of expenses that are “reasonably necessary.” The failure to propose a plan that meets this requirement, or a subsequent failure to make payments under a confirmed plan, can lead to dismissal of the case or conversion to Chapter 7. In this context, the debtor’s assertion that they can only afford to pay a minimal amount due to anticipated future expenses, without demonstrating these expenses are reasonably necessary under the Bankruptcy Code’s standards, would likely lead to the court not confirming the plan as proposed. The court must ensure that the plan provides for payments that are consistent with the debtor’s ability to pay and the requirements of the Bankruptcy Code, including the commitment of projected disposable income.

In New Mexico, as in other states, the determination of whether a particular asset qualifies as exempt property in a bankruptcy proceeding is governed by both federal and state exemption laws. Debtors in New Mexico can elect to use either the federal bankruptcy exemptions or the New Mexico state exemptions, but not both. The New Mexico exemptions are found in the New Mexico Statutes Annotated (NMSA) Chapter 42, Article 10. Specifically, NMSA § 42-10-9 provides an exemption for a motor vehicle to the extent of a certain value. For the purposes of this question, we are considering the exemption limit for a motor vehicle as established by New Mexico state law. The statute provides a specific dollar amount for this exemption. If the debtor’s equity in the vehicle exceeds this statutory limit, the excess equity is considered non-exempt and may be available to the bankruptcy trustee for distribution to creditors. The question focuses on the exact statutory amount provided by New Mexico law for the motor vehicle exemption, which is a critical piece of knowledge for anyone practicing bankruptcy law in the state. The value is a fixed amount set by statute, and understanding this precise figure is essential for advising clients on asset protection in bankruptcy.

In New Mexico, as in all states, the determination of whether a debtor is eligible for Chapter 13 bankruptcy relief hinges on meeting specific “debt limits” established by federal law. These limits are adjusted periodically for inflation. For individuals filing under Chapter 13, there are two primary debt thresholds: one for secured debts and another for unsecured debts. To qualify for Chapter 13, a debtor’s total unsecured debts must not exceed a certain amount, and their total secured debts must not exceed another, higher amount. If either of these limits is surpassed, the debtor is generally ineligible for Chapter 13 and may need to consider Chapter 7 or other alternatives. These limits are crucial for ensuring that Chapter 13, which involves a repayment plan, is utilized by individuals with a manageable debt structure that can be addressed through such a plan, rather than those with overwhelming debt that might be better suited for liquidation under Chapter 7. The specific figures for these limits are set by the Bankruptcy Code and are subject to change, making it essential for practitioners to consult the most current statutory amounts. For the period beginning April 1, 2022, through March 31, 2025, the debt limits for Chapter 13 eligibility are: total secured debts not exceeding \( \$1,395,875 \) and total unsecured debts not exceeding \( \$465,275 \). A debtor whose total secured debts are \( \$1,500,000 \) and total unsecured debts are \( \$400,000 \) exceeds the secured debt limit for Chapter 13 eligibility.

In New Mexico, the determination of whether a debt is dischargeable in bankruptcy hinges on several factors, primarily outlined in Section 523 of the Bankruptcy Code. For debts arising from fraud, a creditor must typically demonstrate that the debtor made a false representation, knew it was false, intended to deceive the creditor, the creditor reasonably relied on the representation, and the creditor suffered damages as a result. Section 523(a)(2)(B) specifically addresses false financial statements. For a debt to be nondischargeable under this subsection, the creditor must prove that the debtor obtained money, property, credit, or an extension or renewal of credit by using a statement respecting the debtor’s or an insider’s financial condition, that the statement was materially false, that the debtor made it with intent to deceive, that the creditor reasonably relied on the statement, and that the statement was in writing. The debtor’s subsequent actions, such as reaffirming the debt or failing to disclose assets, can also impact dischargeability. The intent to deceive is a crucial element, and courts will look at the totality of the circumstances to infer this intent. The debtor’s financial sophistication and the nature of the misrepresentation are considered in assessing reasonable reliance. In this scenario, the creditor must establish all these elements to prove the debt is nondischargeable.

In New Mexico, as in other states, the determination of whether a debtor can reaffirm a debt in a Chapter 13 bankruptcy proceeding hinges on specific legal criteria outlined in the Bankruptcy Code. Reaffirmation agreements are contracts between a debtor and a creditor that allow the debtor to continue paying a debt outside of the bankruptcy plan, thereby retaining possession of the collateral securing the debt. For such agreements to be valid, they must be approved by the court. A key requirement for court approval, particularly when the debtor is represented by counsel, is that the agreement must not impose an undue hardship on the debtor or the debtor’s dependents. This is often assessed by comparing the debtor’s disposable income to the proposed reaffirmation payment. While specific calculations are not required for this question’s conceptual understanding, the underlying principle involves ensuring the debtor has sufficient income to meet the reaffirmed obligation without compromising their ability to pay for necessities and their bankruptcy plan obligations. The Bankruptcy Code, specifically Section 524(c), sets forth the conditions for reaffirmation, emphasizing the debtor’s informed consent and the absence of undue hardship. The debtor’s attorney must file a declaration stating that the agreement does not represent an undue hardship and is in the debtor’s best interest. If the debtor is not represented by counsel, the court must conduct a hearing and make specific findings regarding undue hardship and the debtor’s best interest. The absence of a valid reaffirmation agreement means the debt is typically discharged or handled according to the bankruptcy plan.

The question concerns the application of New Mexico’s homestead exemption in a Chapter 7 bankruptcy case. New Mexico law provides a generous homestead exemption, allowing debtors to protect a significant amount of equity in their primary residence. Under New Mexico Statutes Annotated (NMSA) § 39-1-20, a debtor can exempt up to \$60,000 in equity in a house or other dwelling used as a home. This exemption is available to any natural person who owns and occupies the dwelling as their principal residence. In a Chapter 7 bankruptcy, the trustee liquidates non-exempt assets to pay creditors. If a debtor has equity in their home exceeding the applicable exemption amount, the trustee can sell the home, pay the debtor the exempt amount, and distribute the remaining proceeds to creditors. In this scenario, Elena has \$95,000 in equity in her New Mexico home. She is filing for Chapter 7 bankruptcy. Applying the New Mexico homestead exemption of \$60,000, the amount of equity Elena can protect is \$60,000. The remaining equity, which is the total equity minus the exempt amount, is available to the bankruptcy estate for distribution to creditors. Therefore, the non-exempt equity is \$95,000 – \$60,000 = \$35,000. This \$35,000 is the portion of her home’s equity that the Chapter 7 trustee can potentially liquidate to satisfy her debts. The exemption is intended to ensure that debtors retain a basic level of housing security. It’s important to note that the exemption applies to the equity, not the total value of the home.

The scenario involves a debtor in New Mexico filing for Chapter 7 bankruptcy. The debtor owns a homestead that they occupy as their primary residence. New Mexico law, specifically NMSA 1978, § 39-1-20, provides for a homestead exemption. This exemption allows a debtor to protect a certain amount of equity in their home from creditors in bankruptcy. The statute specifies the amount of the exemption, which is adjusted periodically for inflation. For the purpose of this question, assume the current statutory exemption amount in New Mexico is \$60,000. The debtor’s home has a fair market value of \$250,000. There is a consensual mortgage on the property securing a debt of \$180,000. To determine the non-exempt equity, we subtract the mortgage balance from the fair market value to find the total equity, and then subtract the homestead exemption amount from the total equity. Total Equity = Fair Market Value – Mortgage Balance Total Equity = \$250,000 – \$180,000 = \$70,000 Non-Exempt Equity = Total Equity – Homestead Exemption Non-Exempt Equity = \$70,000 – \$60,000 = \$10,000 This \$10,000 represents the portion of the debtor’s equity in the home that is not protected by the New Mexico homestead exemption and could potentially be liquidated by the Chapter 7 trustee for the benefit of unsecured creditors. The exemption is a crucial protection for homeowners in bankruptcy proceedings in New Mexico, ensuring that a portion of their residential property remains beyond the reach of creditors. The interplay between the property’s value, secured debt, and the statutory exemption amount dictates the extent of available equity for distribution in a Chapter 7 case.

In New Mexico, as in other states, the concept of “exempt property” is crucial in bankruptcy proceedings. Debtors can protect certain assets from liquidation by creditors. The determination of what property is exempt is governed by both federal bankruptcy law and state-specific exemptions. New Mexico has opted out of the federal exemption scheme, meaning debtors in New Mexico must rely on the exemptions provided by New Mexico state law, unless the bankruptcy code specifically allows for the use of federal exemptions in certain circumstances (which is not the case for the general exemption scheme). The New Mexico Homestead Exemption is a significant protection for homeowners. Under New Mexico law, the homestead exemption allows a debtor to protect a certain amount of equity in their primary residence. The specific amount of the exemption is subject to legislative change. For a married couple filing jointly, the exemption typically applies to the marital home, and the exemption amount is often doubled for joint filers, allowing them to protect a greater portion of their equity. This doubling is not automatic for all exemptions but is a common feature for homestead exemptions to accommodate joint ownership and financial interdependence of spouses. Therefore, a married couple filing jointly in New Mexico can protect up to twice the statutory limit of their equity in their primary residence.

The scenario involves a Chapter 7 bankruptcy filing in New Mexico. The debtor, Ms. Anya Sharma, has a homestead property with a value of $300,000. She has a mortgage with a balance of $150,000. The New Mexico homestead exemption, as per NMSA 1978, § 39-1-20, allows a debtor to exempt up to $60,000 in value for a homestead. The equity in the property is calculated as the property’s value minus the secured debt: $300,000 – $150,000 = $150,000. From this equity, the debtor can claim the homestead exemption. The amount of non-exempt equity is the total equity minus the homestead exemption: $150,000 – $60,000 = $90,000. This non-exempt equity is considered property of the bankruptcy estate and is available for liquidation by the trustee to pay unsecured creditors. Therefore, $90,000 of the equity is available to the bankruptcy estate.

The scenario involves a debtor in New Mexico seeking to reaffirm a debt secured by a motor vehicle. In the context of Chapter 13 bankruptcy, reaffirmation agreements are governed by Section 524 of the Bankruptcy Code, which requires court approval unless certain conditions are met. Specifically, if the debtor is an individual who is represented by an attorney in making the decision to reaffirm the debt, and the attorney files an affidavit stating that the agreement represents a fully informed and voluntary agreement, and is in the best interest of the debtor and does not impose an undue hardship on the debtor or a dependent of the debtor, then court approval is not required. However, if the debtor is not represented by an attorney, or if the attorney’s affidavit is not filed, the court must hold a hearing to approve the reaffirmation agreement. This hearing is to ensure the debtor understands the consequences of the agreement and that it is in their best interest. The debtor must also file a statement of intention with the court, which would have been filed early in the bankruptcy case, indicating their intent to reaffirm the debt. The reaffirmation agreement itself must be filed with the court. The key element for avoiding a court hearing in this specific situation, where the debtor is represented by counsel, is the filing of the attorney’s affidavit as prescribed by § 524(c)(3) of the Bankruptcy Code. Without this affidavit, a hearing is generally mandatory for court approval of the reaffirmation agreement, even with legal representation. Therefore, the absence of the attorney’s affidavit necessitates the court hearing for approval.

In New Mexico, as in other states, the determination of whether a debtor can reaffirm a debt secured by personal property in a Chapter 13 bankruptcy case hinges on the debtor’s ability to demonstrate to the court that they can make the post-petition payments required by the reaffirmation agreement. This is not merely a matter of the debtor’s intent or desire to keep the property. Section 524(c) of the Bankruptcy Code outlines the requirements for a valid reaffirmation agreement, including that it must be made in good faith, that the debtor has not been induced by fraud or undue influence, and that the agreement is in the debtor’s best interest or necessary for a fresh start. For secured debts, a critical component is the debtor’s financial capacity to meet the reaffirmed obligations. In New Mexico, the bankruptcy courts will scrutinize the debtor’s disposable income and budget to ensure the reaffirmation is feasible. The debtor’s income must be sufficient to cover the regular expenses, the proposed reaffirmation payments, and any other ongoing obligations. If the debtor’s financial situation, as presented in their bankruptcy schedules and testimony, does not support the ability to make these payments consistently, the court is unlikely to approve the reaffirmation. The concept of “best interest of creditors” also plays a role, but the primary focus for reaffirmation of personal property is the debtor’s post-petition ability to pay.

The question pertains to the classification of certain debts in a New Mexico bankruptcy proceeding, specifically focusing on the impact of the debtor’s domicile and the nature of the debt. In New Mexico, as in most states, the determination of whether a debt is dischargeable or nondischargeable is governed by federal bankruptcy law, primarily Section 523 of the Bankruptcy Code. However, the exemptions available to a debtor, which can affect the property available to satisfy debts, are often state-specific. New Mexico allows debtors to elect either the federal exemptions or the state-specific exemptions. The exemptions in New Mexico are found in the New Mexico Statutes Annotated (NMSA) Chapter 39, Article 3. For a debt to be considered nondischargeable under Section 523(a)(5), it must be a debt for a domestic support obligation. This typically includes alimony, maintenance, or support owed to a spouse, former spouse, or child. Crucially, the character of the debt as a support obligation is determined by its purpose, not by its label in a divorce decree or separation agreement. If the payments are intended to provide necessary support, they are generally considered domestic support obligations. Debts arising from a property settlement agreement, even if incorporated into a divorce decree, are typically dischargeable unless they can be recharacterized as support. In this scenario, the ex-spouse’s obligation to pay the mortgage on the marital home post-divorce, while a contractual obligation stemming from the divorce decree, is framed as a means to ensure the ex-spouse maintains housing for the minor child. This purpose aligns with the definition of support. Therefore, this obligation is likely to be classified as a domestic support obligation under federal bankruptcy law, making it nondischargeable. The state law exemptions are relevant to what property is protected from creditors, but the dischargeability of the debt itself is a federal question. The debt’s origin in a New Mexico divorce decree and its purpose in supporting the child are the key factors.

In New Mexico, as in other states, the determination of whether a debt is dischargeable in bankruptcy hinges on specific provisions within the Bankruptcy Code. For instance, debts arising from fraud, false pretenses, or false representations are generally non-dischargeable under Section 523(a)(2) of the Bankruptcy Code. This includes situations where a debtor makes a materially false statement of fact with the intent to deceive, and the creditor reasonably relies on that statement, suffering a loss as a result. A crucial element in proving such a claim is demonstrating the debtor’s intent to deceive. This is not presumed and must be affirmatively proven by the creditor. The standard of proof for establishing non-dischargeability in a dischargeability adversary proceeding is typically a preponderance of the evidence. This means the creditor must show that it is more likely than not that the debtor’s actions meet the criteria for non-dischargeability. For example, if a debtor provides a false financial statement to obtain a loan, and the lender can prove the falsity, the debtor’s knowledge of its falsity, the intent to deceive, the lender’s reliance, and the resulting damages, the debt may be deemed non-dischargeable. This principle is fundamental to protecting creditors from debtors who attempt to unjustly benefit from bankruptcy by fraudulent means. The specific nuances of proving intent and reliance can be complex and are often litigated in bankruptcy courts across New Mexico.

The question revolves around the concept of “disposable income” as defined under Chapter 13 of the U.S. Bankruptcy Code, specifically as it applies in New Mexico. Disposable income is crucial for determining the duration and amount of payments in a Chapter 13 plan. Section 1325(b)(2) of the Bankruptcy Code defines disposable income as income received less amounts reasonably necessary to support the debtor and their dependents, and payments from the debtor’s property to the extent reasonably necessary for the maintenance or support of the debtor or a dependent. Furthermore, Section 1325(b)(3) mandates the use of the applicable median family income and the means test calculation as outlined in Section 707(b)(2), adjusted for New Mexico’s specific economic conditions and any applicable state-specific allowances. For a debtor to propose a “good faith” plan, particularly in the context of a “below median income” debtor, the plan must propose to pay unsecured creditors at least what they would receive in a Chapter 7 liquidation. However, the calculation of disposable income itself, for the purpose of determining the plan’s duration (either three or five years under Section 1325(b)(4)), relies on the debtor’s actual income and expenses, after accounting for necessary living costs and other allowed deductions. The question presents a scenario where a debtor’s income exceeds the median income for a family of four in New Mexico. Under Section 1325(b)(4), if the debtor’s income is above the applicable median family income, the plan must be for a period of five years, unless the debtor pays the full amount of allowed unsecured claims. The debtor’s disposable income, as calculated using the means test and adjusted for New Mexico living expenses, is $2,500 per month. This disposable income is then multiplied by the number of months in the plan. For above-median income debtors, the presumption is a five-year plan (60 months). Therefore, the total amount to be paid to unsecured creditors through the plan is $2,500/month * 60 months = $150,000. This figure represents the maximum potential payout to unsecured creditors based on the debtor’s disposable income over the statutory five-year period. The question is designed to test the understanding of how disposable income dictates the plan’s duration and the subsequent calculation of the total payout to unsecured creditors in New Mexico for an above-median income debtor.