Month: November 2023

Are you struggling with overwhelming debt in Nevada and seeking to be debt-free? However, you want to know how you can file bankruptcy for free. This article is meant for you; after this quick read, we hope we make filing bankruptcy affordable for your financial situation.

Types Of Bankruptcy

Understanding the types of bankruptcy individuals file is crucial if you seek a cheap bankruptcy in Nevada. Below, we cover the two most common bankruptcy chapters a person will use when filing bankruptcy.

Chapter 7 Bankruptcy

What Is A Chapter 7 bankruptcy

Chapter 7 bankruptcy, commonly referred to as “liquidation bankruptcy,” is the sale of non-exempt assets to pay off debts. The Chapter 7 bankruptcy process usually takes a few months and provides debt relief for a fresh start to those drowning in unsecured debts.

Eligibility Criteria For Chapter 7

To qualify for a Chapter 7 bankruptcy in Nevada, you must pass the means test. The means test compares your income to the median income in Nevada; hence, the name means test. You are likely eligible for Chapter 7 bankruptcy if your income is below the median.

Cost Implications

There is a filing fee for Chapter 7 bankruptcy. However, if you’re facing extreme financial hardship, you may qualify for fee waivers. It’s crucial to explore the option if you seek free bankruptcy in Nevada.

Chapter 13 Bankruptcy

What Is A Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is where you can create a repayment plan to settle your debts. These payment plans usually span three to five years and can give you an opportunity to get your financial life organized. Unlike Chapter 7 bankruptcy, it does not involve the selling of personal assets.

Eligibility Criteria For Chapter 13

The number one criterion for filing a Chapter 13 bankruptcy is having a steady income that can meet the payment plan standards. Additionally, Chapter 13 bankruptcy has debt limits, which means secured and unsecured debts must be below a certain amount.

Cost Implications

In Nevada, Chapter 13 bankruptcy has a filing fee of $313.00, according to the Nevada bankruptcy court. However, the Nevada bankruptcy court can allow you to pay the filing fee in installment payments.

Filing Bankruptcy In Nevada

Declaring bankruptcy in Nevada follows several steps, but these steps can alter between bankruptcy Chapters. Due to that fact, we provide below a general layout when you file for bankruptcy in Nevada.

• Credit Counseling – This is a mandatory requirement all individuals filing for bankruptcy must undertake. Credit counseling is meant to ensure you are aware of tips on how to deal with your situation.

• Filing A Bankruptcy Petition – Contacting a bankruptcy attorney is recommended at this stage as you must file a bankruptcy petition with the Nevada bankruptcy court.

• Automatic Stay – Once you file the bankruptcy petition, an automatic stay is initiated. This means that all creditor actions against you, like foreclosure, repossession, or wage garnishment, are halted.

• Appointed A Trustee – A court-appointed trustee is appointed to oversee your case. The job of the trustee is to oversee the case, schedule meetings with the creditors, and answer any questions the creditors may have about your financial state.

• Next Step In A Chapter 7 – In a Chapter 7 bankruptcy, the next step would be the liquidation process. This would mean the sale of any non-exempt assets to erase debt.

• Next Step In A Chapter 13 – In a Chapter 13 bankruptcy, a repayment plan will be proposed. If the payment plan is approved, it will be taken out over the agreed-upon timeframe. Most creditors will not be too harsh on the payment plan you provide.

Bankruptcy Considerations Nevada Residents Should Know

• Exemptions – Nevada has set bankruptcy exemptions that are in place to determine what property you can keep during bankruptcy. Additionally, there are federal exemptions; both Nevada and federal exemptions are important to understand when filing for bankruptcy.

• Means Test and Median Income – Ensure that you pass the means test when looking to file for bankruptcy.

• Choosing Between Chapter 7 And Chapter 13 – When looking to declare bankruptcy for free or at least cheap, you should carefully consider what chapter you are going to use to file for bankruptcy.

Options To File For Bankruptcy Free In Nevada

Legal Aid Organizations

If you’re a Nevada resident with a low income, you can access free bankruptcy assistance through various legal aid organizations. Some of these organizations are:

• Legal Aid Center of Southern Nevada

• Nevada Legal Services

• Volunteer Attorneys for Rural Nevadans

The above organizations are there to provide legal assistance to Nevadans who cannot afford private representation. If you need debt relief but can’t afford it, contact one of the groups above to get started on a bankruptcy case.

Eligibility Requirements

Organizations that provide free or cheap legal services may come with eligibility criteria. Some common requirements include:

• Income – Legal aid organizations will typically only provide to individuals with low incomes. This income amount is usually based on household income relative to federal poverty guidelines.

• Financial Hardship – Applicants for these organizations will need to demonstrate that they have a genuine financial need and an inability to afford legal services.

Pro Bono Legal Services

Pro Bono legal services are legal professionals who provide legal work without charge. These attorneys can offer their legal expertise to get you through your bankruptcy case without attorney fees.

We take a part of this text to thank all voluntary lawyers as they play a crucial role in ensuring equal access to justice and legal service.

How To Find A Pro Bono Bankruptcy Attorney

If you are looking to find a pro bono Nevada bankruptcy attorney, you can look in several places:

• Legal Aid Organizations – Some legal aid organizations in Nevada offer pro bono services. We recommend you inquire about the availability of pro bono assistance when reaching out to these programs.

• Nevada State Bar – The State Bar of Nevada offers a list of law firms that provide pro bono legal services. This list can be found here.

• Department of Justice – The DOJ provides a list of where you can find pro bono services in Nevada.

If you are seeking pro bono assistance, you should be prepared to provide information about your financial situation and the nature of why you are filing for bankruptcy.

Bankruptcy Court Fee Waivers

Court fee waivers are mechanisms that allow individuals with limited financial means to request relief from court fees associated with filing for bankruptcy. Court waiver ensures that debt relief is not blocked by a financial barrier.

Application Process

The application process for court fee waivers in Nevada involves the following steps:

• Determine Eligibility – The Nevada bankruptcy court will assess eligibility for a court fee waiver based on your income.

• Complete Forms – You can obtain and fill out Nevada fee waiver application forms here.

• Review By Court – The court will review your application and determine whether you qualify for a fee waiver. If you are denied, you may not appeal it to a higher court.

Potential Risks

When looking for a cheap bankruptcy process, there could be potential risks when filing for bankruptcy.

Limited Resources

• Legal Aid Capacity – Legal aid organizations and pro bono services have limitations on resources and capacity. Access to these organizations could be delayed, and you may get a less experienced attorney.

• Complex Case – If you have a complex bankruptcy case you may find it challenging to access a bankruptcy lawyer who is equipped with the necessary skill to handle your case.

Risks With DIY Bankruptcy

We always recommend you contact a Nevada bankruptcy lawyer and avoid attempting a do-it-yourself bankruptcy, as without a bankruptcy lawyer could result in the following:

• Incomplete Filings – A DIY bankruptcy could lead to incomplete or incorrect filings which can result in delays or additional costs.

• Loss Of Assets – You may be unaware of Nevada exemptions without the assistance of an attorney which can cause the unnecessary loss of valuable assets in a Chapter 7 bankruptcy.

• Inadequate Repayment Plan – Without an attorney, you may draft up an inadequate Chapter 13 repayment plan that does not align with your income restrictions.

Frequently Asked Questions (FAQ)

When you declare bankruptcy, one of the first thoughts that may go through your head is if you can keep your house. This is a common question many homeowners in the bankruptcy process ask themselves.

In hopes of answering this question, we provide information on Chapter 7 and 13 bankruptcy, bankruptcy exemptions, home mortgage, and the homestead exemption. By the end of this article, you’ll be a more confident and prepared homeowner in the face of bankruptcy.

Ways Individuals File For Bankruptcy

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy.” In this process, a court-appointed trustee will be assigned to sell the debtor’s non-exempt assets to repay creditors. However, many states have state exemptions that protect the selling of essential assets, such as primary residence.

Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy, a payment plan to created to pay off the creditors gradually. This period is usually over a three to five-year period, with the plan being tailored to the debtor’s financial situation. In addition, unlike in Chapter 7, individuals filing for Chapter 13 bankruptcy can often keep their assets as long as they keep up on the monthly payments agreed to.

Can You Keep Your House In A Chapter 7 Bankruptcy

The answer to whether you can keep your house in a Chapter 7 bankruptcy largely depends on the equity you have in the property and the homestead exemption in your state. The homestead exemption is the defined value of the property you are allowed to keep.

The homestead exemption amount varies from state to state, as in Nevada, according to the bankruptcy court, the amount is the first $550,000 of equity you have in your home.

How Does Equity Play in Chapter 7?

Equity plays a significant role in Chapter 7 bankruptcy and exemption rules. Equity is the market value of your property minus outstanding mortgage payments or liens. However, many states offer homestead exemptions that protect a certain amount of equity in your primary residence.

For example, if your home’s equity falls below the exempted amount, you could be able to keep your house, but on the other hand, if your equity exceeds the exemption limit, the trustee may sell your home to repay creditors.

It’s important before filing bankruptcy that you understand your state’s homestead exemption. In addition, it’s highly recommended to contact a bankruptcy attorney to navigate state exemptions and your specific details.

Can You Keep Your Home in a Chapter 13 Bankruptcy?

Unlike Chapter 7, Chapter 13 bankruptcy is the more favorable option for individuals looking to keep their house. As in a Chapter 13 bankruptcy, instead of liquidating assets to repay creditors, you make a repayment plan that is set to repay missed payments our a period of usually three to five years.

How Does Equity Affect a Chapter 13 Bankruptcy?

Equity works differently in a Chapter 13 bankruptcy than in a Chapter 7. Chapter 13 focuses on following the repayment plan and making regular payments. Here’s how equity comes into play:

• Repayment plan – The equity you have in your home will be strongly considered when making a payment plan. The plan will be based on your income, expenses, and the value of your non-exempt assets, including the equity in your home.

• Equity and Pay – The equity in your home could affect the amount you’re required to pay in the pay meant plan. If you have a significant amount of equity in your house, creditors could expect a higher repayment amount in your plan.

• Your Home – Chapter 13 bankruptcy will allow you to pay your monthly mortgage payments and any missed mortgage payments. As long as you are keeping up on mortgage payments while fulfilling the terms of the Chapter 13 plan, you can keep your house.

Like in a Chapter 7 bankruptcy, it’s important that you work with a bankruptcy attorney during a Chapter 13 bankruptcy process. This will ensure that when you declare bankruptcy using Chapter 13, you will have a payment plan that works perfectly for your situation and allows you to keep up on monthly mortgage payments.

What Chapter Should I File To Keep My House

Before you file for bankruptcy as a homeowner, it’s important to understand what bankruptcy Chapter best fits your situation. Various factors, such as your financial situation, income, and amount of equity in your home, come into play while deciding.

Below, we give you a brief guide to help you make a more informed decision:

You Should File Chapter 13 Bankruptcy If You Have

Regular Income and Mortgage Debt

• Situation – You have a regular income and want to keep your house, but you have fallen behind on your mortgage payments.

• Reason – Chapter 13 will give you the ability to create a payment plan to catch up on mortgage payments over an extended period of time while retaining your home.

Significant Equity and Valuable Assets

• Situation – You have large equity in your home and have possession of personal property with real value or value to you and want to protect it from being sold to repay missed payments.

• Reason – Chapter 13 bankruptcy will allow you to retain your assets and your house while repaying debt collectors through a structured plan.

Secured Debts

• Situation – You have secured debts like car payments and want to keep your home and other assets when filing for bankruptcy.

• Reason – The Chapter 13 bankruptcy plan will address various secured debts while you maintain possession of your assets and home.

You Should File Chapter 7 Bankruptcy If You Have

Limited Income and Exempt Equity

• Situation – You are seeking debt relief with limited income and the equity in your home falls within your state’s exemption limits.

• Reason – Chapter 7 bankruptcy can provide you with a quick discharge of unsecured debt and allow you to keep your home if the equity is protected by state exemptions.

Quick Debt Discharge

• Situation – You have minimal equity in your home and seek fast discharge of debt.

• Reason – Filing for bankruptcy using Chapter 7 is a streamlined process that may discharge eligible debts quickly, making it suitable for those with limited assets and lower equity.

Unmanageable Unsecured Debts

• Situation – If your main goal is getting rid of unsecured debt, such as medical bills or credit card debt, Chapter 7 bankruptcy may be the option.

• Reason – Chapter 7 bankruptcy is designed to give debt relief and provide you with a fresh start.

Homestead Exemption Rule Information

If we had to pick out of all bankruptcy laws, homeowners declaring bankruptcy should know it would be the homestead exemption rule. We cover all information for those who are filing for bankruptcy need to know on this bankruptcy exemption rule below.

Primary Residence Requirement

The homestead exemption will typically only apply to your primary residence.

Creditor Protection

When you file bankruptcy, the homestead exemption is designed to protect your home from being sold to pay off creditors. However, home equity plays a big part in whether you keep your home or lose it.

State-Specific Limts

Each state will have its own exemption limit that dictates the maximum value of the equity in your home. It’s important to go to your state’s bankruptcy court website to find this value.

Automatic Exemption vs. Opt-in

Some states will automatically provide a homestead exemption, while others require you to opt in or file paperwork to claim the exemption.

What To Do If You Are Behind On Mortgage Payments During Bankruptcy

In the bankruptcy filing process, if you are behind on your home mortgage payments and fear for the worse, you should take the following steps:

• Talk With Your Mortgage Lender – Reach out to the mortgage company as soon as you fall behind on a mortgage payment. Ensure you explain your situation and ask about possible options or arrangements.

• Chapter 13 Repayment Plan – If you are filing a Chapter 13, talk with your bankruptcy lawyer about modifying your repayment plan to include any missed mortgage payments.

• Loan Modification – Seek the possibility of a mortgage loan modification with your lender. This might be extending the loan term, adjusting interest rates, or making missed payments more manageable.

• Automatic Stay Protection – An automatic stay comes with bankruptcy. This means creditors, including mortgage lenders, are prevented from taking collection actions during bankruptcy, which provides you with temporary relief.

• Budget Adjustment – Revise your budget and identify areas where you can cut expenses to prioritize mortgage payments.

What To Do If I Want To Keep My Home During Bankruptcy

If your priority during bankruptcy is keeping your place of living, here are some essential steps to take:

• Determine The Equity In Your Home – Calculate the equity in your home. You can do this by subtracting the outstanding mortgage balance from your house’s current market value. This information is crucial to keeping your home.

• Consider Filing Bankruptcy Using Chapter 13 – Chapter 13 bankruptcy is a more suitable option for those with a regular income looking to keep their homes. As Chapter 13 works on a payment plan which allows you to keep your house.

• Understand Homestead Exemptions – Research the homestead exemptions in your state. These exemptions are set in place to protect your primary residence from being sold to repay creditors.

• Stay Current On Mortgage Payments – There’s no such thing as a free house; ensure you pay your mortgage if you seek to keep your home.

• Consult With A Bankruptcy Attorney – Consult with a bankruptcy lawyer. You and your lawyer will assess your unique situation, pick the best bankruptcy Chapter, and work to keep your home.

What To Do If I Want To Sell My Home During Bankruptcy

If you want to sell your home during the bankruptcy process, here are some steps to consider:

• Contact Your Bankruptcy Trustee – A bankruptcy trustee responsible for liquidating non-exempt assets in a Chapter 7 bankruptcy. Notifying your trustee if you plan on selling your home is important.

• List The Property For Sale – Contact a real estate agent to get your property on the market. However, you need to ensure that the sale complies with bankruptcy laws.

• Contact Creditors – Negotiate with creditors to determine how the proceeds will be distributed.

Talk With A Experienced Bankruptcy Attorney Today

Bankruptcy involves stress, legal loopholes, and other nonsense you should not have to bear the weight of. If you are filing for bankruptcy in Las Vegas, NV, contact The Rodney Okano Law Office today; with over 20 years of experience in bankruptcy law, we will handle your bankruptcy case with effectiveness and care.

Ensuring you come out of your bankruptcy case with an improved financial situation. Schedule a free consultation today by calling (702) 565-3060.

Frequently Asked Questions (FAQ)