Filing bankruptcy in Nevada gives honest debtors an opportunity to recover from debt and repays creditors to the extent that a debtor’s property value or earnings permit. 9,336 bankruptcies were filed in Nevada in 2010, ranking Nevada 1st in the country for the number of bankruptcy filings per capita. 76% of Nevada’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.
Filing Bankruptcy in Nevada
Federal law regulates bankruptcy proceedings in Nevada, and as such, all bankruptcy cases are filed in the US Bankruptcy Courts located in Elko, Ely, Las Vegas and Reno.
Although the federal courts exclusively govern bankruptcy proceedings, Nevada law prohibits debtors from using the exemptions listed in the U.S. bankruptcy code and requires the use of the exemptions listed under Nevada bankruptcy law. With the guidance of a bankruptcy attorney Nevada petitioners can fully understand what personal property they are permitted to keep in bankruptcy and what must be sold.
Chapter 7 Bankruptcy, Nevada
Chapter 7 bankruptcies in Nevada are the most common bankruptcy petition filed. Chapter 7 is best suited to petitioners who do not have major assets such as investments or significant equity in a home, for the reason that a Bankruptcy Trustee may liquidate personal property that is not protected by Nevada’s bankruptcy exemptions. Liquidation is the process by which a court-appointed Trustee converts personal assets to cash to distribute among creditors. Nevada’s Chapter 7 bankruptcy law allows petitioners to keep some essential property and these exempt assets cannot be claimed by creditors looking for repayment.
The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.
Nevada Bankruptcy Exemptions
Nevada bankruptcy law assigns specific property exemptions that enable debtors to keep some personal property and assets so bankruptcy proceedings do not leave them destitute. Bankruptcy in Nevada lets petitioners choose exemptions from the state list, exclusively.
Because exemption amounts fluctuate, those initiating bankruptcy proceedings should visit a Nevada bankruptcy attorney to find out which exemptions are applicable – and most beneficial – to their current financial situation. Nevada bankruptcy exemptions include:
Nevada Homestead Exemption
- Must record homestead declaration before filing for bankruptcy
- $550,000 total: Real property or mobile home (Husband and wife may not double)
Nevada Personal Property Exemption
- $12,000 total: Appliances, household goods, furniture, electronics, clothing, home and yard equipment owned by debtor or dependent of debtor
- $5,000 total: Books, works of art, musical instruments and jewelry
- Keepsakes and pictures
- $15,000 total: Motor vehicle; no limit on vehicle equipped for disabled person
- Health aids
- Metal-bearing ores, geological specimens, art curiosities, or paleontological remains; must be arranged, classified, catalogued and numbered in reference books
- Mortgage impound accounts
- One gun
- $16,500 total: Personal injury compensation
- Interests in certain kinds of trusts
- Restitution received for criminal act
- Wrongful death awards to survivors
- Funeral service contract money held in trust
- Burial plot purchase money held in trust
- Tax refunds derived from the earned income credit
Nevada Tools of the Trade Exemption
- Arms, uniforms and accoutrements you’re required to keep
- $4,500 total: Farm trucks, stock, tools, equipment and seed
- $10,000 total: Library, equipment, supplies, tools, inventory and materials
- $4,500 total: Cabin or dwelling of miner or prospector; mining claim, cars, implements and appliances to (for working claim only)
Nevada Wage Garnishment Exemption
- 75% of disposable weekly earnings or 50 times the federal minimum hourly wage per week, whichever is more (Low-income debtors may be authorized for more)
Nevada Public Benefits Exemption
- Aid to blind, aged, disabled public assistance
- Public assistance for children
- Industrial insurance (workers’ compensation) and unemployment compensation
- Vocational rehabilitation benefits
- No limit: Payments received pursuant to the federal Social Security Act including retirement and survivors’ benefits, supplemental security income benefits and disability insurance benefits
- Crime victim’s compensation
Nevada Insurance Exemption
- Health proceeds or avails
- Fraternal benefit society benefits
- Group life or health policy or proceeds
- No limit: Annuity contract proceeds
- No limit: Life insurance policy or proceeds
- Life insurance proceeds if you’re not the insured
Nevada Pensions and Retirement Savings Exemption
- $500,000 total: ERISA-qualified benefits, deferred compensation, SEP IRA, Roth IRA or IRAs and higher education (529) savings plans
- Public employees
Nevada Miscellaneous Exemption
- Alimony and child support
- Property of business partnership
Nevada Wild Card Exemption
- $1,000 total
Chapter 13 Bankruptcy, Nevada
In 2010, 24% of petitioners filed Chapter 13 bankruptcy in Nevada. Seeking protection under Chapter 13 bankruptcy in Nevada requires a court-appointed Trustee to restructure the petitioner’s debts and implement a 3-5 year repayment plan, using the debtor’s future earnings to repay creditors. Chapter 13 petitioners in Nevada keep most – or all – of their property.
How to File Bankruptcy in Nevada
Qualifying for key property exemptions should be a chief deciding factor when bankruptcy protection is on the table as a possible solution for one’s financial problems. The most favorable outcome would be protecting major assets and discharging major debts. A Nevada bankruptcy attorney can explain bankruptcy exemption restrictions and provide guidance on the benefits and drawbacks of Chapter 7 and Chapter 13 bankruptcy.
Bankruptcy Attorney: Nevada
The bankruptcy process can be upsetting and complex for some. A Nevada bankruptcy attorney can guide petitioners through bankruptcy exemption procedures and provide expert counsel on the suitable bankruptcy options for their financial situation.