- First off, you have to figure out if you qualify for Chapter 7 bankruptcy and how much it's going to cost you to file in Nevada.
- Next, it's worth exploring any alternatives to Chapter 7 bankruptcy. You want to make sure you're making the right decision for your situation.
- Lastly, if you do decide to go ahead with Chapter 7 bankruptcy, there are some specific things you need to know about how it works in Nevada.
Chapter 7 bankruptcy is the most common type of bankruptcy in the whole United States I wouldn't be surprised if the majority of the 7,892 bankruptcies filed in Nevada between July 2020 and June 2021 were Chapter 7 bankruptcies.
You can use this Nevada Chapter 7 Calculator below to get an estimate of whether you qualify and how much it might cost you.
Let's dive in and find out why Chapter 7 is such a popular choice in Nevada.
1) How Chapter 7 Bankruptcy Works in Nevada
So, we've been chatting with a lot of people lately, and it seems like there are two big concerns on their minds:
- How quickly can they find some relief from their overwhelming debt?
- How much is this whole debt relief thing gonna cost them?
When comparing different ways to get out of debt, Chapter 7 bankruptcy is usually the cheapest and fastest option compared to Chapter 13 bankruptcy, debt negotiation, debt management, and debt payoff planning.
How Fast Do You Get Relief in A Chapter 7 Bankruptcy in Nevada?
In Nevada, you can usually get a Chapter 7 bankruptcy discharge in as little as 120 days or four months.
When deciding to file a Chapter 7, you may hear the term "no-asset" in the Chapter 7 case. This means you may not have a house or any other valuable assets exceeding Nevada's bankruptcy exemptions. So, if you don't own any assets, this can be beneficial in Chapter 7, making it less complex. Remember that every case is unique, so you'll want to consult with an attorney if you are considering filing.
There are some challenges you'll need to navigate along the way. It's important to understand the ins and outs of the process and make sure you meet all the requirements. There are professionals out there who can guide you through bankruptcy laws and help you make the best decisions for your financial future. Just remember, every situation is unique, so it's a good idea to consult with a bankruptcy attorney to understand the specific benefits and challenges you may encounter along the way.
How Much Does It Cost To File Chapter 7 Bankruptcy in Nevada?
Filing for Chapter 7 bankruptcy nationwide usually costs between $500 and $3000. However, this price is going to depend on where you file.
Believe it or not, the cost of Chapter 7 bankruptcy can even vary depending on where you file within Nevada. For instance, if you're filing in Reno, you might end up paying a bankruptcy attorney fee of $1,300. But if you're filing in Henderson, that fee could be $1,500.
In certain cases, you may be able to reduce the cost of filing for bankruptcy by obtaining a filing fee waiver. Check out the Nevada filing fee waiver for more information.
How Do I Qualify For Chapter 7 Bankruptcy in Nevada?
A Chapter 7 bankruptcy is designed for those who cannot repay some debts. However, before you can file, you must go through an income evaluation to see if you qualify for a Chapter 7 bankruptcy. This evaluation is called the means test.
Unsecured debts are debts that don't have any collateral attached to them. So, if you file a Chapter 7 bankruptcy, you can discharge medical bills, personal loans, particular old income tax debts, old utility bills, credit card debts, and most personal judgments. A Chapter 7 bankruptcy is like a fresh start, allowing you to get back on your feet. If you manage to pass the Nevada bankruptcy means test then your unsecured debts can be wiped away.
What about secured debts in Chapter 7?
If you're looking to wipe out secured debts, such as car loans and mortgages, Chapter 7 may be able to help. However, you'll have to give up the asset to your creditor and they will have to consider it as payment in full for what you owe.
Now, let's dive into what it takes to qualify for Chapter 7 bankruptcy.
IMPORTANT: Chapter 7 Qualification via Nevada Means Test
The Bankruptcy Means Test calculates your average monthly and annual income. It compares your income against the median income of other households in Nevada.
If your average or median income is below the median income in Nevada, you might qualify for Chapter 7 bankruptcy. That means you could be on your way to financial freedom! To figure out if you meet the requirements for Chapter 7 bankruptcy, try out this Nevada Chapter 7 Bankruptcy Means Test Calculator below.
Help! My Income Exceeded The Chapter 7 Means Test Allowable in Nevada
If your income is higher than the average income in your state, you might need a look at part 2 of the means test or consider an alternative option.
The means test consists of two parts, so it's not a straightforward pass-or-fail situation. Even if you don't meet the requirements in the first section, you still have a chance to qualify for Chapter 7 bankruptcy by meeting the criteria in the second section.
To find out more about how to pass the Chapter 7 means test when your income exceeds the median, you can check out this helpful resource.
Chapter 7 Bankruptcy Nevada Income Limits
The Bankruptcy Means Test is a way to determine if you qualify for bankruptcy based on your income. The figures are adjusted periodically, so be sure to look at the latest Nevada median income limit. For bankruptcy cases filed on or after April 1, 2024, the Nevada median income looks something like this:
- Add $9,000 for each additional family member.
Be sure to double-check the US Trustees website for the most up-to-date figures when you're calculating the Means Test.
Will I lose my belongings if I file Chapter 7 bankruptcy? Understand Nevada bankruptcy exemptions
These exemptions prevent the sale of your property during a Chapter 7 liquidation case. But here's the thing, if your property isn't protected by these exemptions, it might be sold.
In Nevada, they have the Nevada bankruptcy homestead exemption, which determines how much of your home's equity you can safeguard. The amount varies depending on your age and marital status.
- If you're single under or over the age of 65, you can protect up to $605,000.
- For married under or over the age of 65, the exemption is also at $605,000.
The Nevada-specific homestead bankruptcy exemption has some additional requirements. You need to record a homestead declaration before filing for bankruptcy.
If you're curious about the federal bankruptcy exemptions, you can find them in the 11 U.S. Code §522. The National Consumer Law Center lists federal bankruptcy exemptions on its website. However, Nevada doesn't allow you to use these federal exemptions, so keep that in mind.
Always make sure you're using the most up-to-date information when looking into bankruptcy exemptions. Stay informed!
Chapter 7 Bankruptcy Pros and Cons
Like any debt relief option, Chapter 7 bankruptcy has its upsides and downsides. Let's dive into the pros and cons.
Pros
- Affordable debt relief solution
- You can receive a discharge in about 120 days.
- Fresh start that allows you to discharge the debt.
- You may be able to keep your home and belongings due to exemptions.
- It can put a stop to debt collection lawsuits. No more constant phone calls, threatening letters, or fear of legal action.
- No more deficiency. This is when you owe more on a loan than what your collateral is worth and the difference is called a deficiency, but a Chapter 7 can wipe it away.
- Provides relief for unaffordable unsecured debts.
Cons
- There are income requirements for qualification that you need to meet.
- You may potentially lose your home and other belongings if your assets exceed the exemption limit.
- It'll have a negative credit report impact for 10 years.
- It may have a negative credit score impact.
- If you have non-dischargeable debt it may not be able to be wiped away. These are debts such as student loans and taxes that may not be able to be included.
- Difficult to prevent foreclosure
Now that we've covered the pros and cons, let's move on to explore some alternatives to Chapter 7 bankruptcy in Nevada.
2) Alternatives to Chapter 7 Bankruptcy in Nevada
Chapter 7 bankruptcy is a popular option for those in financial distress, but what if you don't qualify for Chapter 7? Or maybe you've got too many assets to protect? Or perhaps you just don't want to go down that road. Well, there are alternatives to Chapter 7 bankruptcy that you can explore.
a) Chapter 13 Bankruptcy
What are some alternatives to Chapter 7 bankruptcy? Well, there are a couple worth considering. One option is to consider Chapter 13 bankruptcy over Chapter 7 Bankruptcy. With a Chapter 13 bankruptcy, you can restructure your debts into a more manageable monthly plan. This means you may be able to afford your house and car payments easier.
There are many benefits to a Chapter 13 bankruptcy. First off, it can put a stop to foreclosures, repossessions, and even wage garnishments. You can also catch up on mortgage payments, past-due car payments, and tax debt over three to five years through the bankruptcy plan. Chapter 13 bankruptcy might also allow you to reduce unpaid child support and alimony. However, it's important to note that you must continue making your regular domestic support payments to stay in Chapter 13. In a Chapter 13 plan, some people may be able to lower their car loan payments and potentially get rid of second mortgages, as long as they meet certain requirements.
So, if you're above the income limit for Chapter 7, Chapter 13 bankruptcy is here to offer you a fresh start and a chance to regain control of your financial life.
Can you afford Chapter 13 bankruptcy?
A Chapter 13 repayment plan can be complex, so you may want to ask an attorney about it. There are the attorney fees as well as a repayment plan that looks at non-exempt equity and disposable income to determine how much, if any, of the debt you may pay back. Feel free to check out the Chapter 13 calculator to get an estimate.
To figure out if you can potentially handle a Chapter 13 bankruptcy, you might want to try out the Chapter 13 calculator below to help you estimate whether you can manage the monthly payment.
ADD CALCULATOR HERE
b) Debt Relief
If you're thinking of going the debt settlement route, there are a few things to keep in mind. First off, consider the impact it might have on your credit score.
When you partner with a debt settlement firm, they will make you fall behind on the accounts you choose to include by about 6 months. They will then negotiate with your creditors on a lower overall amount you pay back over 2-4 years. This may hurt your credit score since you have to fall behind.
Ultimately, it is up to your creditors if they want to agree or deny negotiations, so there is quite a bit of risk involved. If they agree, then you pay the lower amount through an escrow account, but they will expect you to keep up on all the payments. However, if the creditors disagree, they may try to sue you. However, you can choose which accounts to include in the program. There also may be potential taxes on the forgiven debt, so be sure to consult with the firm to understand more about the process.
c) Debt Management
Debt management companies focus on negotiating lower interest rates and the program usually lasts for about 3 to 5 years. Credit counseling is generally a more expensive option compared to the others. Some creditors, like some personal loan lenders, may not want to work with a debt management company. There is also a potential impact on your credit score.
Debt management can be a good option for those who have a bunch of high-interest credit card debt. The firm will work to significantly lower those so you can pay on the principle.
If you're considering debt management in Nevada, it may be a suitable option if you have a significant amount of high-interest credit card debt. By reducing your interest rate from, let's say, 22-30% to a more manageable 10%, you can make your debt more affordable. This can be a beneficial solution for individuals in this particular situation.
d) Debt Payoff Planning
Debt can feel like a never-ending cycle, with interest piling up faster than you can say "financial hardship." But don't worry, you have options, such as debt payoff planning.
Debt payoff planning involves cutting down on expenses and putting any cash flow you have toward your debts to avoid interest charges. This isn't a one-size-fits-all solution. Depending on the size of your financial hardship, it may not be feasible for everyone. Payoff planning means you are paying the full amount back, so it's helpful if you can afford your debt but want to pay it off more efficiently.
There is an app called the Savvy debt payoff planner that will help you prioritize your debts by combining efficient methods to create a plan to pay things off as quickly as possible. On average, it saves folks around $2,000 in interest.
So, if you're ready to take control of your finances and kiss that debt goodbye, give the Savvy debt payoff planner a whirl. Trust me, your future self will thank you!
3) Specific Nevada Chapter 7 Bankruptcy Information:
Let's take a closer look at some key aspects of filing Chapter 7 bankruptcy in Nevada that may help you make up your mind. First off, Chapter 7 bankruptcy is often referred to as "liquidation bankruptcy." It's a process where a person's non-exempt assets are sold to pay off their debts. The good news is that many of your debts can be completely wiped away, giving you a fresh start.
One major advantage of Chapter 7 bankruptcy is that it provides immediate relief from creditor harassment. You know those annoying phone calls and threatening letters demanding payment? Well, they'll finally come to an end. Plus, any pending lawsuits or wage garnishments will be put on hold. Chapter 7 bankruptcy is relatively quick compared to other forms of bankruptcy. In most cases, the process takes around three to six months from start to finish. That means you can get back on your feet and start rebuilding your financial life sooner than you might think.
One important factor is the eligibility criteria. Not everyone can file for Chapter 7 bankruptcy. You'll need to pass a means test to determine if your income is below the state median. Additionally, it's crucial to understand that Chapter 7 bankruptcy may not discharge all of your debts. Certain obligations, such as child support, alimony, student loans, and recent taxes, are generally not eligible for discharge. So, it's essential to evaluate your situation and consult a bankruptcy attorney to fully grasp which debts can be eliminated.
Remember, it's always wise to seek professional advice and weigh the pros and cons before taking any major financial step.
Credit Counseling and Debtor Education Courses
When you're going through the bankruptcy process, there are a couple of courses you need to take which are required if you want a discharge.
The first course you need to take is a credit counseling course. This has to be done before you file your bankruptcy case. It's designed to guide you and help you understand your financial situation better.
The second course is called a debtor education course. It's meant to educate you on financial management and give you the tools you need to make better financial decisions in the future and get back on your feet after the bankruptcy.
The United States Trustee's Office has approved certain companies in Nevada that offer these bankruptcy courses. You can find a list of these companies on the UST website and these courses can be completed online. There is a small fee involved, but they're designed to help you navigate through the bankruptcy process and improve your financial future.
Nevada Bankruptcy Court Locations
When filing for bankruptcy, you will have to attend the 341 meetings of creditors. A lot of these meetings have been happening over the phone or through Zoom. But, if you have a meeting that needs to happen in person, it's important to know where the courthouse is.
Here are the court locations for filing bankruptcy in Nevada, based on the bankruptcy district.
District of Nevada
- 333 Las Vegas Blvd South, Las Vegas, NV 89101.
Chapter 7 Bankruptcy Trustees Nevada
Here are the bankruptcy trustees in Nevada broken down by bankruptcy district. Below, you'll find the names and phone numbers of the bankruptcy trustees in Nevada:
- Ryan A. Andersen: (702) 522-1992
- Robert E. Atkinson: (702) 617-3200
- Christopher Burke: (775) 333-9277
- Marianne Eardley: (775) 738-2043
- Troy Fox: (702) 382-1007
- W. Donald Gieseke: (775) 742-9107
- Shelley D. Krohn: (702) 421-2210
- Christina W. Lovato: (775) 851-1424
- Lenard E. Schwartzer: (702) 307-2022
- Brian D. Shapiro: (702) 386-8600
Before you jump into filing a bankruptcy case, it's crucial to review Nevada's local bankruptcy rules. These rules may have a few differences from the Federal Bankruptcy Rules. Take advantage of this list of Chapter 7 bankruptcy trustees in Nevada, and don't forget to brush up on those local rules.
Conclusion
Now that you've got a better understanding of Chapter 7 bankruptcy in Nevada, let's dive into some useful tools and resources. If you're curious about whether you qualify and want to estimate the cost, you can try out the Chapter 7 bankruptcy means test calculator below.
While most folks choose to work with a bankruptcy attorney for both Chapter 7 and Chapter 13 bankruptcies, there is an option to file on your own. Filing bankruptcy without an attorney is possible, although it comes with its fair share of challenges. If you're curious about this route, you can learn more about it by visiting the link below.
Filing bankruptcy without an attorney