Filing For Bankruptcy in Nevada: What You Need To Know
Sometimes in life, it can be hard to deal with all of the responsibilities that we have heaped upon ourselves. Pretty soon, we find ourselves drowning in debt and have no idea where to turn. In cases like this, bankruptcy may be a viable option. It is a good way for good people to get out of a bad situation and can help you get a fresh start legally. Of course, there will be certain requirements that must be met; if you can meet these requests then you have a legal right to file.
First Things First
Before delving into this subject, it is important for you to know about the 2005 Bankruptcy Act. Under this act, if you intend to file for bankruptcy there are certain things that you must do, these are:
• Get credit counseling within 6 months of filing
• After filing, you must complete a financial management instructional course.
In addition, both your expenses and income will be evaluated in order to determine what your options are for filing; Chapter 7 or Chapter 13. To determine which type of bankruptcy would be best for you the courts will apply something called a means test. A means test determines whether or not you are eligible for assistance based on the value of your possessions as well as your ability to pay off your debt without any additional help.
If your average income for the past 6 months falls below the average income in Nevada, you are recommended to pursue a Chapter 7 bankruptcy; nor do you qualify for the means test. However, if your average income is higher than the average income in Nevada, the means test will be applied and will determine whether you should file for Chapter 7 or Chapter 13.
In order to begin the bankruptcy process, there is certain information that you must have on hand. These include:
1. Current income sources
2. Big financial transactions over the past two years
3. Your monthly expenses
4. Both your secured and unsecured debts
5. All of your possessions and assets
6. Real estate deeds
7. Loan documents
8. Tax returns for the past two years
9. Car title
In addition, you must determine whether or not you will require the services of an attorney.
Filing for Bankruptcy
Once you have gotten all the information you will need, you must decide which of your assets are exempt from seizure; this information should be based on the Nevada exemptions. After this is completed, a two page petition, along with a few other forms, must be filed at your local Nevada district bankruptcy court. Note- before filing for bankruptcy in Las Vegas, you might want to consider getting a business line of credit or loan. Click the link for more information.
These other forms are called schedules and will require you to explain your current financial status as well as any financial transactions that were completed within the past two years. During this process, it is important to be truthful because if the judge, or the creditors, feels that you are telling them anything less than the truth, it may jeopardize the final ruling.
The cost for filing a Chapter 13 bankruptcy is $281 and this fee cannot be waived. It costs $306 for Chapter 7, this fee cannot be waived either but, if you cannot afford paying this lump sum in full, you might have the option to pay for it in installments. Learn more about Las Vegas Credit Repair Here.
Requirements for Chapter 13
When you file for a Chapter 13 bankruptcy you must also submit a proposed payment plan. Consider the following questions to help you:
• How much do you have left over for bills after you have paid your monthly expenses?
• How do you plan to divide this money among those that you are indebted to?
Important claims like back child support and tax must be paid in full; however it’s ok to pay your unsecured debts (like medical bills and credit card debt) in part. In fact, dependent on the rulings of those involved in your case, you might be able to pay off your unsecured debt at a fraction of what you actually owe.
In addition, your payment plan must be able to hold up to following three evaluations:
• Whether or not your payment plan was delivered in good faith
• The length of time that your disposable income is paid into the plan; the minimum is 3 years.
• Your unsecured debts must be paid to creditors in the amount of, at the very least, the value of the nonexempt property that you own.
When you file for chapter 13 the money for your payment plan will, generally, be taken directly from your paycheck.
Related: Are you looking for alternatives to bankruptcy? Check out this article.
Once you have filed your petition for bankruptcy, an automatic stay will go into effect immediately. An automatic stay is an injunction that stops all action by your creditors to collect debt from you. In other words, it prevents them from making direct contact with your or staking claims on any of your property. This will also stop any foreclosure proceedings.
Once you file for bankruptcy, the court will take legal control over any debt or property that is not covered by your Nevada exemptions. Once this occurs, the court will appoint a trustee to your case in order to ensure that your creditors are paid fairly. The trustee will evaluate your paperwork thoroughly to determine if any aspects of your payment plan should be challenged.
341 Meeting of Creditors
About a month after you file for bankruptcy, your trustee will call a meeting of creditors which you are required to attend; they usually last about five minutes. If you are filing for a Chapter 7, don’t expect your creditors to be there. However, one or two might show up for the Chapter 13 meeting; especially if there are any questions about the legitimacy of your plan. Any questions or objections are intended to be resolved through negotiations between you and your creditors. But, if an agreement cannot be reached, a judge will determine what is owed.
In addition, if you have filed for a Chapter 7 and you happen to own nonexempt assets, you will be expected to give this property to the trustee once the meeting is over. If you are reluctant to part with it, you have the option of delivering its fair market value in cash.
Once the trustee has received this property, it will be sold and the funds will be distributed to your creditors. However, if the property isn’t worth much or if the trustee his having trouble selling it, you may be able to reclaim your property.
Creditors and trustees have two months to challenge your right to dismiss your debts. If there are no challengers, you will receive notice from the courts that your dischargeable debts will be cleared within a time span of approximately 6 months.
Chapter 13 Plan Confirmation
After filing your Chapter 13 payment plan you are required to attend a go before a bankruptcy judge to determine if it is feasible. If the judge is in agreement with your proposed payment plan, the balance on your dismissible debts will be removed at the end of the term.
Facing your life after bankruptcy will not be easy. In fact, it will get harder before it gets easier. Therefore, it’s important to think twice before you make this important decision.
Please note: creditprofessor.org does not provide financial, tax, or any other professional advice. This information is for entertainment purposes only. If you need professional advice, please contact a professional.