New Mexico Bankruptcy Laws
Bankruptcy is a situation where the bank is broke. If you went back to the history of the terminology, then you would realize that the bankers who initially traded from a table in the streets form the basis of the phrase bank. When they got too broke to conduct business, they would break the tables or banks thus disrupt the table. Today, and indeed from the 17th century, bankruptcy is a mechanism to control debt for both debtor and creditors. In the USA, the constitution gives power to the Federal government through the parliament to make bankruptcy laws . These are supposed to be uniform except for a few exemptions as determined by each state. Therefore the bankruptcy law in New Mexico is has special exemptions.
Bankruptcy Exemptions for New Mexico:
Exemptions on the bankruptcy law of New Mexico are found in both Chapter 7 and Chapter 13. The first law covers individual debts while the second covers corporate laws. These exemptions on bankruptcy law of New Mexico are meant to protect the debtor from becoming a pauper.
Chapter 7 Bankruptcy Law for New Mexico:
Like already mentioned, these cover individual insolvency. In New Mexico chapter 7 bankruptcy laws, a creditor cannot claim the homestead of a married or widowed debtor beyond $30,000. This is mentioned in the law 42-10-9. The debtor’s income from benevolence fund is also protected to the tune of $5,000.
Chapter 13 Bankruptcy Law for New Mexico:
Chapter13 bankruptcy laws contain general rules that protect a debtor from creditors in a business set up in New Mexico. Those who may want to recover their money from unpaid salaries of employees are limited to the tune of 75%. This is meant to ensure that the enterprise can continue to function and have a formula for regularly servicing the debt.
In all cases, the amount of debt repaid through a bankruptcy procedure is always lower. This is because the debtor is exempted from high interest charges.
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