Nevada Bankruptcy Lawyer
The foundation for United States bankruptcy laws is found in the U.S. Constitution. Even our Founding Fathers realized that everyone deserves a second chance.
As a Nevada resident or business, you may be entitled to protections under both federal and state bankruptcy laws. Title 11 of the United States Code provides the law for bankruptcy procedures. Nevada state law guarantees your property rights within the bankruptcy process.
Individuals, married couples, and businesses are all entitled to seek bankruptcy protections so long as they meet certain conditions. Usually, individuals or married couples file for bankruptcy protection under Chapter 7 or Chapter 13 of Title 11 of the United States Code. Businesses usually file for protection under Chapter 11, with farmers or fisherman filing under Chapter 12. There are exceptions. Consult with a qualified Nevada bankruptcy attorney to determine whether bankruptcy is available to you and to determine which chapter of bankruptcy is appropriate for your individual situation.
What is a Chapter 7 Bankruptcy?
Individuals or married couples can file for bankruptcy protection under Chapter 7 if they meet the Nevada “means” test, meaning their income is below the state median income.
If you qualify, your debts are discharged, which means they go away. You never have to pay back those credit card payments. However, if you have assets in excess of the allowable exemptions, the bankruptcy trustee will seize those assets and sell them to pay your creditors.
The terms “seizure” and “liquidation” sound frightening, but if you’re eligible for Chapter 7, you likely don’t have assets in excess of the allowable exemptions, so nothing will be seized. The nickname of “liquidation bankruptcy” is often a misnomer. Nevada has very generous property exemptions.
Can I keep my house and car if I file for bankruptcy?
You can, likely, keep your house and car when filing for bankruptcy if you can pay any missed payments and make future payments, along with other financial responsibilities such as a Chapter 13 repayment plan. You will be required to reaffirm the debt of the mortgage and car.
In a Chapter 7 bankruptcy, if your equity in the house and/or car exceeds the allowable exemptions, your bankruptcy attorney may be able to help you purchase it at the fair market or wholesale price, not what you owe on it.
How do I stop creditors from calling?
As soon as you file your bankruptcy petition and it’s accepted, the court will issue a “stay.” This means that all attempts to collect debt against you must stop immediately. Phone calls, letters, law suits, foreclosures, and most garnishments will cease.
Dischargeable debts are debts that you are no longer liable for personally. The debt ends and creditors may not make any future collection attempts. The types of debt that are dischargeable differ between Chapter 7 and Chapter 13. Bankruptcy cannot discharge some debts: criminal debts, child support, alimony, most taxes, and student loans.
Reaffirmation of Debt
If you want to keep something such as your car or home during a Chapter 7 bankruptcy proceeding, you will need to sign that you will repay that debt, that it will not be discharged.
Wage Earners Bankruptcy (Chapter 13 Bankruptcy)
Chapter 13 bankruptcy proceedings are called a “wage earners bankruptcy.” This is because most debts aren’t discharged; they are reorganized in a three to five year repayment plan. You must have sufficient income (i.e. wages) to qualify for a Chapter 13 bankruptcy.
Chapter 11 Bankruptcy
If you want your business to keep functioning, but need new contract terms in order to succeed, Chapter 11 bankruptcy provides just that. Often assets are recovered, debts are either eliminated or reduced, and the terms of contracts are renegotiated. This reorganization allows the business to continue to operate.
Bankruptcy law recognizes that you need certain assets, even upon filing bankruptcy, to keep functioning and take care of your family. Exemptions or “exempt assets” are those that can’t be taken from you during bankruptcy. Nevada exemptions are quite generous.
Unsecured debt is debt that isn’t attached to collateral such as credit card debts. Conversely, “secured” debt is collateralized debt such as a car loan is secured by the car and a mortgage is secured by the home.