There are many aspects that are affiliated with financial matters. Some common reasons include heavy debt, illness, divorce, foreclosure, or losing one’s job.
In fact, the average credit card debt in Nevada is a whopping $5,620 per person. In addition, foreclosure rates are also as staggering, one out of every 5,990 NV homes is currently in foreclosure.
If you have found yourself in similar situations, then you are more than likely facing other personal issues that come with dealing with debt. The fear of losing your automobile, home or your income can drain a person emotionally. You may have even considered Filing for Bankruptcy .
If you are thinking “Is Bankruptcy Best For Me?” you are undoubtedly not alone. Around a million people file bankruptcy each year in the US. Bankruptcy is a tool provided by the US Government to help struggling Americans find relief from substantial debt. You may want to research bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy gives people the chance to resolve their debt while still working with lenders in a legal capacity. It is initiated by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by an individual or married couples jointly. When the bankruptcy is settled, the filer will ‘exit’ and will have a chance for a fresh start on their finances.
During a bankruptcy, a trustee is appointed to oversee the particulars of the case. His or her responsibilities differ and depend on whether the individual has filed for Chapter 13 or Chapter 7 bankruptcy.
Did you know that Nevada ranks #7 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 403 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
People in Nevada, who claim bankruptcy, can choose to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Take a look at the descriptions below for more information:
In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.
The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.
A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. The individual will be allowed to keep his or her valuable assets over a 3- to 5-year period.
In order to decide which type of bankruptcy an individual will file, they will have to assess their ability to repay using the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:
- income and expenses
- household size and composition
- debt-to-income ratio
If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.
What Are Bankruptcy Exemptions?
The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- Real property or mobile home up to $550,000. Spouses may not double. Must record a homestead declaration before filing for bankruptcy (115.020).
- Motor vehicle up to $15,000 (no limit if equipped for the disabled)
- Household goods, wearing apparel, furniture, appliances, home and yard equipment up to $12,000 total.
- Books, jewelry, musical instruments, and works of art up to $5,000 total; all pictures and keepsakes.
- Medically-prescribed health aids.
- Personal injury compensation up to $16,150.
- Wrongful death awards for survivors.
- Restitution received for a criminal act.
- Earned state and federal income tax credit refunds.
- Stock in certain closely-held corporations.
- Metal-bearing ores, geological specimens, paleontological remains or art curiosities (must be arranged, classified, cataloged, and numbered in reference books).
- Mortgage impound accounts.
- Funeral service contract money and burial plot purchase money held in trust.
- The greater of the following: 50 times the federal minimum hourly wage per week or minimum of 75% of disposable weekly earnings. Judge may approve more for low-income debtor.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- IRAS and Roth IRAs to $1,283,025.
- Public employees.
- Aid to blind, aged and disabled; public assistance.
- Public assistance for children.
- Unemployment compensation.
- Vocational rehabilitation benefits.
- Industrial insurance (worker’s compensation).
Tools of Trade
- Tools, materials, library, equipment, inventory and supplies up to $10,000; farm trucks, equipment, tools, stock and seed up to $4,500; cabin or dwelling of a miner or prospector, cars, implements and appliances for mining and a mining claim you work up to $4,500; arms, uniforms, and accoutrements you are required to keep.
- Life insurance policy or proceeds.
- Life insurance proceeds if you are not insured.
- Health insurance proceeds or avails.
- Group life or health policy or proceeds.
- Annuity contract proceeds.
- Fraternal benefit society benefits.
- Private disability insurance proceeds.
- Security deposits on a rental residence. A landlord can enforce the terms of the lease or rental agreement, however.
- Alimony and child support (if ordered by a court).
- Particular business partnership property.
- $1,000 of any personal property.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
You are not required by law to hire a lawyer to declare relief. People are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not an easy task.
Filing Bankruptcy without an Attorney
A basic Chapter 7 Bankruptcy that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that may not require an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
Most of the time, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy attorney is there to represent you and not in the interest of creditors.
An attorney is also accustomed with exemption laws. In addition, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in NV, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Nevada
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In Nevada
Additional Nevada Resources
Foreclosure Help Program
Disability SSDI Benefits