Nevada Bankruptcy Laws should be known by every resident of the state of Nevada. Have you been receiving a lot of phone calls from credit companies lately? Or is your mailbox overflowing with credit card bills? This is an indication that you’re already way behind your payments. You may be thinking that you can always avail of the bankruptcy protection program offered by the state of Nevada, but watch out, you don’t know what you’re up against. Nevada bankruptcy laws may grant you protection, but you may lose your assets in the process.
Prior to a debtor’s bankruptcy application, a credit counseling program should be completed. The purpose of this program is to orient and help every citizen to handle their debts and budget their income. Educational materials are provided to help you avoid bankruptcy declaration. This counseling should be 6 months prior to the actual bankruptcy petition and should be from an organization recognized by the state of Nevada. While it may not sway your decision to file for bankruptcy, it will help you in the future not to commit the same mistake again.
For most citizens of Nevada, the primary bankruptcy option is Chapter 7. This bankruptcy protection is called liquidation because it eliminates all the debtor’s unsecured debt legally sanctioned by the US Bankruptcy Code. For every bankruptcy case, a trustee is randomly assigned to process the whole proceeding. It is his duty to ensure that the debtor is really qualified to avail of the program through a means test that compares the monthly income against the median income level of the state of Nevada. An income lower than what most citizens earn base on US Census data guarantees a Chapter 7 admission.
In cases where a debtor is denied the Chapter 7 protection, he still has one option left. Chapter 13 is called the debt reorganization program because the terms of your debts will be restructured to allocate some cash for the payment of your creditors. You have the court’s assurance that your assets won’t be seized by the creditors to pay your debts. You have to make monthly payments for five years and it should be outlined in the repayment plan you will propose to the court. Once the court approves this, you will have to remit your monthly payment to the trustee assigned for your case and he in turn, will distribute it to the respective creditors. An automatic stay is issued to creditors to prevent them from foreclosing your properties.
Although the federal laws have specific exemptions for each bankruptcy case, Nevada bankruptcy laws have provided their own list of exemptions that is more lenient than the federal laws. Here is a partial list of the exemptions:
• Your home or a mobile home worth $550,000;
• A single vehicle worth $2,400 if used to commute for work;
• 75% of earned, but unpaid wages for non-head of households and 85% for head of households;
• Household goods necessary for living worth $12,000;
• Books, jewelry, and musical instruments worth $5,000;
• Tools of trade worth $10,000; and
• Benefits like health proceeds, health aids, unemployment compensation and personal injury compensation.
There are more bankruptcy laws that are involved aside from the basic ones mentioned above, it is your duty to gather as much accurate information as you can, what you can’t comprehend may best be explained by a lawyer.