Over much of its history, KARA encountered financial difficulties, which ultimately forced the station to cease operations and declare bankruptcy.
[15] Creditors that sought and obtained judgments against the radio stations in late 1967 included the Albuquerque law firm of Franks and deVesty, which received $6,000,[16] and Broadcast Music, Inc., which won more than $1,000.
[17] Alongside the money woes came a lawsuit from Star Broadcasting, the owners of KBNM-FM, claiming that KARA would not allow any mail labeled "KARA-FM" to be delivered to their station.
[19] KARA ceased broadcasting on May 18, 1968; the Federal Communications Commission dismissed the station's license renewal application that November.
[20] Even after going silent, KARA faced legal actions for debts it owed to creditors, including the United Press International wire service, which sought a judgment of more than $22,000 against the station in August.