That’s How Nevada Bankruptcy Law Works
Although Nevada state Bankruptcy law falls under the regulations of the 2005 Bankruptcy Act, the in-state system involves several differences, including its own bankruptcy exemptions chart. In this detailed guide, bankruptcy experts from Debtstoppers explain all the essentials of the Nevada state bankruptcy law with all its differences and catches. It’s time to get rid of stigmas related to bankruptcy and realize that it’s usually the best way to make your financial future brighter.
Nevada Bankruptcy Process
The Nevada bankruptcy process includes several essential stages that you have to pass to file successfully.
- Take the Means Test – during this test the court will figure out if you can file under Chapter 7 or Chapter 13 is necessary. The courts will analyze your income and expenses over the last 6 months prior to testing and compare the figures to the state median income. If your income is below the median, you will deserve the right to utilize Chapter 7. If your income is higher than the median income in the state, you still may achieve the right, but Chapter 13 is more probable.
- Gather paperwork – this includes itemizing all your income sources, major transactions, and all tax returns for the last 24 months, monthly living expenses, debts, assets and possessions, real estate, vehicles, and loans.
- File for bankruptcy – first, you should figure which property is exempt from seizure (see exemptions below), file the main two-page petition along with other necessary forms at the Nevada district bankruptcy court department that belongs to your area of residence. Pay the $306 fee for Chapter 7 (can be paid in installments) or $281 for Chapter 13.
Nevada Bankruptcy Exemptions
If you seek exemptions to save your home, start reading the next section right away to discover the Homestead exemption. Other available bankruptcy exemptions in Nevada are described below, and you can use them to keep some or even all of your property after filing for bankruptcy.
Personal property exemptions
If you want to keep personal property, consider the following exemptions:
- You can keep up to $15,000 of equity in a vehicle or an unlimited amount if the vehicle is equipped for a family member who has a certain disability.
- Household goods: you can keep up to $12,000 of total market value for the household items you have or even up to $24,000 if you’re married and filing for bankruptcy jointly.
- Books, art, jewelry, and musical instruments up to $5,000 (or $10,000 for married filing jointly) of combined value can be kept.
- Injury awards up to $16,150 can be kept.
Miscellaneous property exemptions
These exemptions include the following rules:
- If you are a farmer or a miner, you are eligible to keep up to $4,500 of equity value in vehicles, tools, uniforms, appliances, and other things essential for your work.
- You can also keep up to $10,000 in tools and supplies if you are a librarian.
- Business partnership property is protected under Nev. Rev. Stat. § 87.250(2c)
- Any other job that requires you to keep particular essential items is protected under Nev. Rev. Stat. § 21.090(1)(i).
Exemptions for money benefits
If you have any funds that you have to keep, you can either save them all or to the following limits, depending on your case:
- Wages and income – up to 75% of wages or 50 times the federal minimum wage. You can keep the amount that is larger.
- Any life insurance money.
- Any amount on your landlord’s security deposit.
- Any court-ordered amount for child support.
- Any court-ordered alimony amount.
- Any payments that you receive under the Social Security Act (see Nev. Rev. Stat. § 21.090(1)(y)).
You are also eligible to keep most of your insurance proceeds, including life, health, annuity contract, group life/health, fraternal benefit, and private disability insurance proceeds.
Nevada state also protects a list of public benefits and pensions, including:
- Unemployment compensations;
- Worker’s compensation under industrial insurance;
- Aid and public assistance;
- Vocational rehabilitation benefits;
- Tax-exempt retirement accounts (see 11 U.S.C. § 522);
- IRAS and Roth IRAs;
- Public employee retirement benefits.
Can You Keep Your Home When Filing for Bankruptcy in Nevada
The short answer is “yes.” Nevada law acknowledges how important a home can be in an individual’s life, so the state doesn’t consider it just another piece of property. This means you can actually keep your home as an individual but still have to ensure that your particular case allows this. First of all, you have enough time to find debt settling and payment plan stretching plans during the automatic stay, which goes into effect as soon as you file for bankruptcy under chapters 7 or 13.
Nevada Homestead Exemption
Nevada bankruptcy law offers various types of exemptions to prevent creditors from particular property liquidation and distribution. One of them is the Homestead Exemption and you can use it to keep your home. The exemption covers the following types of property:
- A certain plot of land with a house on it.
- A mobile home, regardless of the land where it’s located and the ownership of this land.
- An apartment.
If the listed property is up to $605,000 in value, you can opt for this exemption, and no one will be eligible to force you to sell your home to settle the debt. The filing procedure requires you to declare your willingness to claim the property as a homestead in writing. Sign the declaration together with all owners of the property and have it signed by the Nevada Real Estate Division attorney before filing for bankruptcy.
Use Your Rights
Now that you’re knowledgeable about the bankruptcy law in Nevada, you can tame anxiety and switch to solving the problem proactively. Remember to follow all the rules and apply for as many debt reducing and payment delaying opportunities as possible. You have the right to cut your debt but you have to be proactive to use them for your good. You should also consider Nevada’s debt negotiation procedure as a potential alternative to bankruptcy.