Filing for bankruptcy can be scary, but it can also be a way for people who are in too much debt to start over. The purpose of Nevada’s bankruptcy laws is to help people and businesses who can’t pay their bills anymore get some relief. If you know how bankruptcy works in Nevada, including the different types of bankruptcy filings, you can figure out which one is best for you.
Laws About Bankruptcy in Nevada
Federal law governs Nevada’s bankruptcy laws, which means the process is mostly the same in all states. However, Nevada does offer some state-specific exemptions that may affect how much property you can protect in a bankruptcy filing. The U.S. Bankruptcy Court for the District of Nevada is in charge of bankruptcy cases in Nevada. People can file for bankruptcy in two main ways: Chapter 7 and Chapter 13.
Chapter 7 NV: Bankruptcy for Liquidation
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is one of the most common types of bankruptcy filings in Nevada. This type of bankruptcy allows individuals to discharge most of their unsecured debts, such as credit card balances, medical bills, and personal loans. A bankruptcy trustee is put in charge of selling off any non-exempt assets to pay off creditors in exchange for debt relief.
In Nevada, certain assets, like your home, car, and personal property, are safe up to a certain amount. But if you have a lot of non-exempt assets, you might have to sell them to pay your creditors. Chapter 7 is usually faster than Chapter 13, taking only 3 to 6 months to finish. In Nevada, you must pass the “means test” to be able to file for Chapter 7 bankruptcy. This test looks at your income and expenses to see if you really need to file for this type of bankruptcy.
Chapter 13 NV: Bankruptcy for Reorganization
In Nevada, Chapter 13 bankruptcy is called “reorganization bankruptcy.” Chapter 13 lets people with a steady income reorganize their debts and make a repayment plan that lasts 3 to 5 years instead of selling their assets. People who want to keep their property, like their home, and avoid foreclosure often use this type of bankruptcy.
If you file for Chapter 13 NV, you will work with a bankruptcy trustee to come up with a payment plan that takes into account your income, expenses, and the amount of debt you owe. The court has to approve the plan, and once it’s done, any remaining unsecured debts may be forgiven. Chapter 13 is a good choice for people who have a steady job but are having trouble making their debt payments on time. It lets you catch up on payments you missed and combine all of your debts into one monthly payment that you can handle.
Questions and Answers About Nevada Bankruptcy Laws
What are the differences between Chapter 7 and Chapter 13 bankruptcy?
The main difference between Chapter 7 and Chapter 13 bankruptcy is how they deal with debts. People with unsecured debts usually have them wiped out in Chapter 7 after they sell off non-exempt assets. In Chapter 13, debts are reorganized into a repayment plan. Chapter 7 usually goes faster, but Chapter 13 lets people keep their property and pay it off over time.
If I live in another state, can I file for bankruptcy in Nevada?
You must file for bankruptcy in the state where you have lived for at least 180 days before you file. You can file for bankruptcy in Nevada if you currently live there or have lived there for the last six months.
How long does it take to go bankrupt in Nevada?
In Nevada, the type of filing affects how long it takes to finish a bankruptcy case. Chapter 7 usually takes three to six months, but Chapter 13 can take three to five years, depending on how you plan to pay it back.
In Chapter 7 bankruptcy, can I keep my house?
If Nevada’s exemption laws cover the equity in your home, you can keep it in a Chapter 7 bankruptcy. The trustee may sell your home to pay off your debts if it has too much equity. But you might be able to work something out with your lender or look into other ways to keep the house.
Will my credit be hurt if I file for bankruptcy in Nevada?
Yes, filing for bankruptcy will hurt your credit score, but it can also help you get out of a lot of debt. After your bankruptcy case is over, you can start to rebuild your credit over time by making payments on time and using credit responsibly.
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