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One of the most common misconceptions about bankruptcy is that you lose all of your possessions. This couldn’t be farther from the truth! Bankruptcy is designed to give people who are struggling a second chance, not punish them for filing.
Nevada bankruptcy law considers a wide range of assets as exempt, which means bankruptcy filers can keep these possessions and they will not be touched by bankruptcy proceedings.
Nevada Bankruptcy Exemptions
Whether you file for Chapter 7 or Chapter 13 bankruptcy, Nevada bankruptcy law allows you to choose between two sets of exemptions. These exemptions are protected in a Chapter 7 bankruptcy and are used to determine how much you need to pay your unsecured creditors in a Chapter 13 bankruptcy.
While most states allow you to choose between state and federal bankruptcy exemptions, Nevada requires that you use the state exemptions but choose which exemption system you prefer. If you have a great deal of home equity, System 1 will likely offer greater benefit while System 2 is more beneficial for people with valuable items or assets in a bank account.
Nevada Bankruptcy Exemption: System 1
- This exemption protects up to $26,800 in equity in your main home as well as personal or real property in which you live, such as a mobile home, boat, or condo.
- Motor vehicle. This exemption protects up to $5,350 in equity in a vehicle.
- 75% of the wages paid to you within 30 days prior to filing are protected as well as public employee vacation credits.
- Tax-exempt retirement accounts such as 401(k)s, 403(b)s, SEP and SIMPLE IRAs, and defined benefit plans
- IRA and Roth IRAs up to $1,283,000
- Matured life insurance benefits or unmatured life insurance policies up to $12,200
- Health insurance and disability benefits
- Life insurance proceeds when the policy prohibits use to pay creditors
- Household items and personal items
- Jewelry, artwork, and heirlooms up to $8,000
- Bank deposits from Social Security payments up to $3,050 for a single payee ($4,575 for a married couple)
Nevada Bankruptcy Exemption: System 2
- Homestead equity up to
- Motor vehicle equity up to
- Burial plot up to $25,575 instead of a homestead
- Personal and household goods up to $650 per item
- Jewelry up to $1,525
- Tax-exempt retirement accounts, IRAs, and Roth IRAs
- Alimony and child support
- Unmatured life insurance policy other than credit
- Disability benefits
- Wildcard exemption: $1,350 plus any unused amount from the homestead or burial exemption toward any property
This does not include all exemptions allowed under Nevada bankruptcy law. The dollar amounts for these exemptions are adjusted every 3 years to account for inflation. You can view the current dollar amounts here.
Contact a Las Vegas Bankruptcy Exemptions Lawyer
Nevada bankruptcy law is very complex and it’s important to understand these exemptions as they are subject to value caps and the exemptions change frequently. An experienced bankruptcy attorney in Las Vegas can help you understand how filing for bankruptcy will affect your assets and help you retain as many assets as possible. Contact Aaron. Law Group today for a free consultation with a Nevada bankruptcy lawyer who will help you understand your options.