OVERWHELMING DEBT NEEDS OVERWHELMING SUPPORT

What Is Bankruptcy?

Federal bankruptcy laws were enacted to give honest debtors who were unable to pay their debts a “fresh start.” In Chapter 7 bankruptcy, a fresh start comes from discharging debt. This discharge releases the debtor from personal liability for debts after completion of the bankruptcy. Creditors can not collect on discharged debts.
The United States Bankruptcy Court administers bankruptcies under federal law. The following govern all bankruptcies:

• United States Bankruptcy Code,
• Federal Rules of Bankruptcy Procedure, and
• Local rules of the court in which the debtor files the case.

Under the Bankruptcy Code there are six types of bankruptcy cases, named for the chapters that describe them. Chapter 7 and 13 apply to consumer bankruptcy. Your individual situation will determine the type of bankruptcy case you file.

What Is Chapter 7 Bankruptcy?

Chapter 7 is a liquidation bankruptcy that discharges (cancels) most consumer debt. A debtor (the individual filing for bankruptcy) may have to surrender non-exempt property to the trustee to pay off creditors. The trustee sells the non-exempt assets for cash. In Chapter 7, proceeds of an asset sale are distributed to pay the debtor’s creditors. Bankruptcy protects certain property, called exempt property, from creditors. The court cannot take exempt property to pay off creditors.

• Creditor – the individual or company to which the debtor owes money.
• Trustee – an officer appointed by the court who oversees the bankruptcy case.

Does Bankruptcy Stop Creditors?

A bankruptcy may stop most (not all) creditors. Filing for bankruptcy prevents creditors from taking any action to try to collect on debts. This is called a stay. When the debtor files for bankruptcy a stay is automatically entered. An automatic stay:

• Stops bill collectors from contacting the debtor,
• Stops wage garnishment,
• Temporarily stops foreclosures, and
• May delay evictions.

An automatic stay does not stop all actions. A qualified bankruptcy attorney can explain what exceptions may apply to your situation. Examples of exceptions to the automatic stay include:

• Criminal prosecutions,
• Domestic support obligations,
• Residential evictions obtained prior to the bankruptcy, and
• Most tax debts.

Does Bankruptcy Eliminate All Debts?

No, bankruptcy does not eliminate all debts. There are several protected debts that bankruptcy usually does not eliminate, including:

• Child support
• Spousal support
• Most IRS taxes
• Student loans
• Court-ordered restitution
• Court judgments for injury or death as a result of a DUI
• Fraudulently incurred debts

Who Can File for Chapter 7 in Nevada?

An experienced attorney is the best person to advise you of whether you can file for Chapter 7 bankruptcy. There are residency requirements that you must meet before you can file in Nevada. Income and debt may determine whether Chapter 7 fits your situation. The team at Anthem Bankruptcy Lawyers can advise you of your filing options.

The Means Test

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires every debtor to list their income in a “means test.” Your attorney can review the means test with you. If you cannot pass the means test, you cannot file for Chapter 7 (Chapter 13 may be your only option).

The Nevada bankruptcy “means test” was designed to prevent people who are able to pay their debts from filing Chapter 7 bankruptcy. Our experienced bankruptcy team can help you determine if you qualify to file for Chapter 7 protection in Nevada.

What if I Filed for Bankruptcy Before?

It is possible to file for bankruptcy if you previously filed for bankruptcy. Whether or not you are currently able to file for bankruptcy depends on a few factors including:

• How long ago you filed.
• Whether or not the court previously dismissed your case.
• Whether or not you received a discharge in your case.

Speak to a licensed Nevada bankruptcy attorney if you have questions about filing for a bankruptcy if you have filed bankruptcy before.

Does Filing for Bankruptcy Cost Money?

Yes, filing for bankruptcy costs money. There are administrative fees associated with the bankruptcy process including filing fees and financial counseling fees. You must pay those fees prior to filing and your attorney can advise you of the amounts. Depending on your financial situation, you may be able to request to pay fees in installments. Some fees may be waived if your income falls below a certain level.

Why File Chapter 7?

Whether you are able to file for Chapter 7 bankruptcy protection will depend on your unique financial situation. There are several reasons that Chapter 7 may apply to your situation. An experienced bankruptcy attorney is the best person to advise you on whether Chapter 7 fits your needs. The following are questions you may consider before you file for Chapter 7 protection:

• Are you a low income earner?
• Do you have a lot of dischargeable debt?
• Do you have few nonexempt assets?
• Are you current on your mortgage payments? If not, do you intend to surrender your home?
• Are you current on your car payments? If not, do you intend to surrender your car?

What Are Exemptions?

The Bankruptcy Code and Nevada law “exempt” certain assets from collection, allowing the debtor to keep the property when filing for bankruptcy. Nevada Revised Statute 21.090 contains a list of Nevada exemptions.
Nevada law exempts a wide variety of property in the bankruptcy process. Without a thorough understanding of what the law considers to be exempt, you may fail to correctly identify property. An experienced bankruptcy attorney can help you identify and retain exempt property.

Do I Need an Attorney?

Understanding whether you may qualify for either Chapter 7 or Chapter 13 bankruptcy protection is a complex legal process. Filing for the protections of bankruptcy has long-term financial and legal consequences. It is possible for an individual to file for bankruptcy without an attorney. A qualified bankruptcy attorney can answer your legal questions and provide advice specific to your situation. Remember to seek the advice of an attorney licensed to practice in your bankruptcy court. Anthem Bankruptcy Lawyers are licensed in Nevada.

What Financial Documents Will I Need?

Your individual situation will determine what financial documents you will need to provide for your attorney to review. To assess your situation, your attorney may request that you provide the following:

• Proof of income for the past six months.
• Financial (bank and credit card) statements for the past six months.
• Tax returns or tax transcript for the last two to four years. You can obtain a tax transcript request form from the IRS.
• Copies of any pending complaints and legal judgments against you (including divorce decrees).
• Credit reports

Expense records (example bills)
Your attorney may provide you with forms to list your assets, creditors, and debts.

Do I Need to Attend Financial Counseling?

Your attorney will advise you of what steps you need to take prior to filing for bankruptcy. A Chapter 7 plan requires financial counseling.

Before Filing

180 days before filing, you must obtain a Certificate of Compliance by attending credit counseling through a Department of Justice approved credit counseling agency. The Department of Justice provides a list of approved credit counseling agencies.

After Filing

Before the court discharges your debts, you are required to attend a personal financial management instructional course by an approved provider. The Department of Justice provides a list of approved providers.

Hire a Las Vegas Lawyer Before You File for Bankruptcy

Award-winning Las Vegas Anthem Bankruptcy Lawyers is a team of experienced, dedicated bankruptcy lawyers and case managers based in Henderson, Nevada. We serve clients in Henderson, Las Vegas, North Las Vegas, Summerlin, and Clark County. With over 25 years of experience, Anthem Bankruptcy Lawyers specialize in bankruptcy law cases. Contact us today at (702) 857-6000 to make an appointment for a free consultation.