FREQUENTLY ASKED BANKRUPTCY QUESTIONS
There are many FAQS regarding filing bankruptcy in Nevada. A Chapter 7 bankruptcy discharge is a formal liquidation of your unsecured debt. This means you are no longer responsible for the debt. A chapter 7 bankruptcy discharge wipes out most debts. There are certain debts that can not be discharged including: certain tax debt, student loans, back child support, and criminal restitution. There are some exceptions and circumstances where taxes and student loans may be discharged. You will receive your discharge typically within four months of the filing of your bankruptcy petition. It is highly recommended that you keep a copy of your discharge safe in case you need to provide it later down the road.
In both Chapters of bankruptcy, you will be ineligible for a home loan for two years after your filing date.
In a Chapter 7 Bankruptcy, you will begin receiving offers in the mail for new credit lines once your case is discharged. You may be able to finance a vehicle before your case is even discharged.
In a Chapter 13 Bankruptcy, you will need the court’s approval to get new loans during your 3-5 year payment plan. You can open new credit lines if your case is dismissed or discharged.
For both Chapters, you will need to complete a second online credit counseling course before your case is eligible for discharge. In a Chapter 7, once you attend your 341 Meeting of Creditors and complete your second credit counseling course, it is simply a matter of waiting for discharge. Your creditors will have a period of 60 days after the 341 Hearing to object to their debts being discharged in your bankruptcy. Once the 60 day period is complete, your case is eligible for discharge and it could be a few days or weeks until the court processes discharge.
In a Chapter 13, you need to make your final payment in your plan before your case will be eligible for discharge.
Most of your belongings will fall under a category of bankruptcy exemptions. In a Chapter 7 Bankruptcy, if your assets are worth less than the applicable exemption, or you have less equity in the asset than the exemption amount, you can keep it.
Some common bankruptcy exemptions used in Nevada are:
· Artwork, jewelry, musical instruments, and personal libraries: $5,000
· Farm tools and equipment: $4,500
· Household goods, furnishings, etc.: $12,000
· Wild card: $1,000
The exemption restrictions don’t apply in a Chapter 13 Bankruptcy.
For Chapter 7 Bankruptcy filers, the exemption limit for a motor vehicle in Nevada is $15,000. Check with your attorney to estimate the true value of your car and to confirm that you will be using Nevada exemptions.
For Chapter 13 Bankruptcy filers, the exemption limit doesn’t apply. If you are behind on your car payments and fear repossession, a Chapter 13 will spread your arrearages, along with the rest of the balance on your loan and some other debts, over your payment plan.
You can keep your home in a Chapter 7 bankruptcy if it is below your state’s exemption amount. In Nevada, the homestead exemption is $550,000. Your home may be worth more than $550,000 as long as you don’t have more than that amount of equity in the home. If you are in a Chapter 7 with more than $550,000 equity in your home, the trustee may order the sale of your home and contribute the excess amount to your bankruptcy creditors.
If you are behind on your mortgage payments and are worried about foreclosure, a Chapter 13 Bankruptcy may help you save your home. This Chapter allows you to spread out the past-due balance of your mortgage over the life of your payment plan, or 3-5 years. While your case is active, your creditors can’t repossess or foreclose your property.