Defining Chapter 7 Bankruptcy
If you are going through a financial crunch, then Chapter 7 bankruptcy can take you out of it. You may also know it as straight bankruptcy, which allows an individual to get rid of unsecured debts. If you don’t have the funds to make your ends meet, let alone pay off the bills and afford monthly dues, opting for Chapter 7 might be the solution you so earnestly are looking for. While it should be your very last resort, it can really reset and straighten up your finances.
How Does It Work?
Filing for Chapter 7 bankruptcy comes with a legal stay on the debts. This means creditors cannot demand payments. Your property becomes a possession of the court on legal grounds. They assign a trustee who handles your Chapter 7 bankruptcy case. The trustee’s responsibilities include reviewing your financial position, in addition to assets, to see what you can do to deal with the debt. Speaking of this, the trustee will sell all properties that fall under the non-exempted category. Selling these assets will generate funds that the trustee will use to pay back creditors.
In addition to this, the trustee’s job is to set a meeting between the debtor and creditor where both of them must go to a court and answer questions related to Chapter 7 bankruptcy filing.
It is pertinent to mention that you don’t have to turn over the list and value of exempted properties, i.e., property that you can retain, to creditors. However, it varies from state to state.
Chapter 7 Bankruptcy Exemptions and Non Exemptions
With bankruptcy, you can take yourself out of the financial crunch and make a fresh start. For you to be able to do so, the government has set some rules, which allow owners of the exempted property. You can exercise control on this property at all times. This gives you the freedom to maintain your standards of living while resolving debts side by side.
In other words, you get to keep the government-exempted property. Meanwhile, the court-appointed trustee can sell off the property that is not exempt from paying off the creditors. This is how things work in a Chapter 7 bankruptcy!
Since we are on the topic, allow us to mention the fact that the exemptions in Chapter 7 bankruptcy come with a limit. Simply put, one can protect the properties up to a certain amount when it comes to filing for Chapter 7 bankruptcy.
Let’s walk you through an example! If the exemption limit of vehicles is $6,000, and the worth of your car is $3,000, you will get to keep that vehicle of yours.
However, if the worth is $10,000, then the trustee has the right to sell it off for $10,000. They will give your profit of $6,000 and divide the rest to pay off the creditors.
What Properties are exempted in Chapter 7 Bankruptcy?
The first thing bankruptcy applicants in Nevada ask is whether or not they would be able to keep their homes. Well, the answer to this question is yes!
Fortunately, bankruptcy laws in Nevada acknowledge that a home is more than a mere piece of property. Therefore, the laws here have ensured that the filers get to keep their home and suspend any foreclosure proceedings on a temporary basis. If explained in numbers, then you can save $550,000 – $665,000 in equity for a homestead though you must file a declaration before filing for chapter 7 bankruptcy to acquire this exemption. Nev. Rev. Stat. § § 21.090(1)(l), (m).
In addition to this, Nevada bankruptcy laws also encompass provisions that increase the owner’s ability to retain their home if and when they face foreclosure.
Nev. Rev. Stat. § § 21.090; 689.700, 645A.170, 645B.180 explains personal property exemptions for filers. These include household items like electronic appliances, clothes, furniture, and other equipment for the house’s upkeep.
Nev. Rev. Stat. § 21.090(1)(k), Nev. Rev. Stat. § 687B.270 and Nev. Rev. Stat. § 21.090(1)(ee) explains how you can protect not only your life insurance proceeds but proceeds from health insurance and private disability insurance as well, respectively.
Nev. Rev. Stat. § 21.090(1)(k) specifically encompasses how all insurance proceeds money is exempted from the bankruptcy liquidation.
When filing for bankruptcy in Nevada, an automatic stay comes into effect. This restricts creditors and puts foreclosure proceedings on hold while the case is pending.
While it is not a permanent solution, it can buy you enough time to make some permanent arrangements. For more guide, it is best to reach out to a professional attorney for a bit of expert advice.
People filing for bankruptcy often wonder if they will lose their car or get to keep it.
NRS 21.090 speaks about exempted properties when it comes to bankruptcy proceedings. Under the law, section (f) states how a car is also exempt, in addition to other things. Generally, vehicle exemption in Nevada covers a car, van, or even a truck
It is important to note that bankruptcy laws tend to change every now and then. It can be difficult to keep up with them. Therefore, it is best to always opt for a professional attorney as they stay on top of changes that occur in Nevada bankruptcy laws.
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