How Bankruptcy Works
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How Bankruptcy Works in Nevada
Bankruptcy is a legal process that allows a person who is unable to pay his or her bills and other financial responsibilities to have a fresh and new financial start. Federal law gives a person who is deeply in debt the ability to file for bankruptcy. All bankruptcy cases are dealt with in the federal court system. No matter what type of bankruptcy you are considering, there are several things you must do.
The 2005 Bankruptcy Act states that all individual debtors who file a personal bankruptcy in the state of Nevada must undergo credit counseling within six months before the date they file for bankruptcy relief. Furthermore, debtors must also complete a financial management instructional course after they file.
In addition to these two requirements, debtors must provide income and debt information to analyze. This information is used to determine if a person is able to file a Chapter 7 bankruptcy or if they must file a Chapter 13 bankruptcy instead. Attorneys will analyze the amount of income you have brought in over the past six months to determine whether you pass the maximum income allowed for a Chapter 7 bankruptcy. If your income does exceed the median, they may be required to file a Chapter 13.
After determining the type of Bankruptcy you qualify for, you will need to gather paperwork that shows your current income, any major purchases or financial transactions over the past two years, and all the assets and possessions you have. The deeds to any real property you have, the titles to your vehicles, tax returns for two years, and documents for any loans are also important documents to take with you. It is crucial to review your income, assets, and property you own to determine what is exempt from filing.
Filing for a Bankruptcy in Nevada
After gathering the appropriate documents, you can move forward with filing. You will need to file the petition for bankruptcy in your Nevada district bankruptcy court. The petition and various other forms will be needed during your initial filing. These forms, which are referred to as schedules, require you to describe your financial status and your recent financial transactions. It is crucial that you are completely forthcoming with this information as lying or hiding any information can jeopardize your ability to file.
If you are filing a Chapter 7 bankruptcy, you will need to pay the filing fee. There are some circumstances where the fee can be waived. If the fees are not waived, you may be able to pay the fee in installments. If you proceed with a Chapter 13 bankruptcy, you will need to submit a proposed repayment plan with your filing. Each repayment plan must meet the following three tests:
- The repayment plan must be delivered in good faith
- Unsecured creditors must be paid, at minimum, the same amount of money that would have been paid had a Chapter 7 bankruptcy been filed
- All disposable income must be allotted toward the plan for a period of no less than 36-months
Under Chapter 13 bankruptcy filing, payments should begin immediately.
Moving Forward after Filing
After a bankruptcy is filed, an automatic stay will be issued. This prevents your creditors from seizing property from you. It also prevents them from contacting you or requesting a lien against any of your property moving forward. An automatic stay will stop any current foreclosure proceedings.
In addition to having the automatic stay issued, the court will assume legal control of your debts and all of the property that is not exempt under Nevada law. A trustee will also be appointed by the court, who works to ensure all the creditors are paid as much as possible. The trustee will review your paperwork and can challenge any element of your case they deem necessary. Trustees often pay particular attention to a filer’s assets and exemptions to determine if things should be included in the bankruptcy filing.
At around 30-days after filing for bankruptcy, you will need to attend a 341 meeting with the trustee and the creditors. Although a few creditors may show up at a Chapter 13 filing, they rarely attend meetings pertaining to Chapter 7s. These meetings last around five minutes and provide creditors and debtors the opportunity to clarify information in the filing or to dispute certain details in a case. You will receive a notice of the date, time, and location for the meeting and you need to contact the court to verify the information before attending.
If you file a Chapter 13 bankruptcy plan, you are required to attend a hearing before a bankruptcy judge. The judge will either deny or confirm your repayment plan. If the judge confirms your plan, and you follow through with it, the balances on the dischargeable debts will be eliminated. Although you are not required to work with a bankruptcy attorney, it is crucial to understand that bankruptcy law is extremely complex. Working with an attorney during your filing can provide you with a better understanding of the bankruptcy process and help to ensure you are able to protect your legal rights and safeguard exempt assets throughout the entire process.
Contact a Bankruptcy Attorney at VegasBK in Las Vegas
The process of filing a bankruptcy can be complicated. Working with a knowledgeable legal team throughout the process will help to ensure you are aware of your rights and obligations when filing for Chapter 7 or Chapter 13 bankruptcy in the state of Nevada. Our team of Las Vegas bankruptcy lawyers at VegasBK strives to keep our clients informed throughout the bankruptcy process and to ensure the experience is as pleasant as possible, given the circumstances. Our extensive knowledge of bankruptcy laws in Nevada helps us provide effective and competent legal representation to our clients to ensure their legal rights and best interests are protected. Contact the VegasBK to see if you qualify for a Chapter 7 or a Chapter 13 bankruptcy and what you can expect moving forward.