Bankruptcy in Nevada: compare chapter 7 and 13 bankruptcy.
If your personal financial position becomes too difficult to manage and you accumulate more debt than you can possibly pay off, you may want to start looking into consulting with Chapter 7 and Chapter 13 bankruptcy lawyers in Nevada.
Bankruptcy presents one of the most efficient strategies to get out of debt. The majority of people who go this route will file for Chapter 7 or Chapter 13 bankruptcy. Which is the best option is determined by the individual’s assets and financial objectives.
Here’s a breakdown of the differences between Chapter 7 and Chapter 13 bankruptcy, as well as who each form is appropriate for. Regardless of which path you take, bankruptcy may be the wisest choice if:
• You’re facing lawsuits from creditors.
• You see no way to pay off your debt within five years.
• Monthly consumer debt payments exceed 50% of your monthly take-home pay.
Chapter 13 Bankruptcy in Nevada:
When you own property or a business that is not covered by exemptions, this may be your best alternative. The cash amount of maximum protection for your home, automobile, personal property, and other valuables is known as an exemption. If your property exceeds the exemption totals in a Chapter 7 bankruptcy, you’ll lose everything. You can figure out a payment plan to save nonexempt assets with a Chapter 13 filing.
Making a payment plan in Nevada might be a difficult task. It means that you must make regular payments to the bankruptcy court and remain under the court’s control for a period of three to five years.
If your home is in foreclosure, you can keep it if you resume paying your mortgage payments and adhere to your Chapter 13 payment plan. Another benefit is that in Nevada, you can petition for Chapter 13 protection many times without having to wait a year between filings.
However, because this is a more complicated type of bankruptcy, it will cost you more in legal expenses, and the process may take several years to complete during your payment plan.
This is a less complicated kind of bankruptcy. Once your bankruptcy is discharged, you will owe no money to the courts or creditors, and any future profits will be yours. It’s certainly a new beginning. Furthermore, because Chapter 7 is a considerably simpler process, it will cost you less in legal fees and may normally be completed in a couple of months.
When Chapter 7 Is Better Than Chapter 13
Understanding the fundamental differences between Chapter 7 and Chapter 13 bankruptcy is a good start, but it’s not nearly enough to help you decide which option is best for you. Let’s begin by examining when Chapter 7 bankruptcy is preferable to Chapter 13.
Chapter 7 is better if…
- You only have unsecured debt, such as credit card debt, medical bills, repossession balances, personal loans, and so on.
- You don’t have a steady source of income or don’t have enough to pay your living expenses, such as housing and food.
- If you can’t afford to engage a bankruptcy lawyer to represent you in court,
- If you don’t owe any non-dischargeable debts, such as alimony or child support, and you’re current on your payments,
- For at least the next three years, you’re unable to commit to a repayment plan.
When Chapter 13 Is Better Than Chapter 7
You have the option of filing for Chapter 7 or Chapter 13 bankruptcy if you have some discretionary income and are not in too much debt.
Chapter 13 is better if…
- you have multiple mortgages
- you have debts that can’t be discharged,
- you’re behind on your mortgage and want to catch up,
- you owe money to your ex-spouse from a property settlement
- you want to keep property that’s not protected by an exemption,
- you have a car loan with a high interest rate or negative equity from a trade-in
Which is better: Chapter 7 or Chapter 13?
Which form of bankruptcy is best for you depends on your financial situation and goals.
Consult with a bankruptcy professional to evaluate whether Chapter 7 or Chapter 13 bankruptcy is right for you. You’ll want to make sure that bankruptcy can handle your problem debts and that you’ll be able to take advantage of the fresh start that bankruptcy provides.
Most people choose Chapter 7 bankruptcy because it is faster and less expensive than Chapter 13. After performing the means test, which examines income, spending, and family size to establish eligibility, the great majority of filers qualify for Chapter 7. Eligible debts such as credit card bills, medical debt, and personal loans are discharged or erased under Chapter 7 bankruptcy. Other debts, such as school loans and taxes, are usually not eligible. Furthermore, Chapter 7 does not provide a way to catch up on secured loan payments, such as a mortgage or auto loan, nor does it safeguard those assets against foreclosure or repossession.
A bankruptcy trustee — an administrator who works with the bankruptcy courts to represent the debtor’s estate — may sell nonexempt things, which are items that aren’t protected during bankruptcy. The products that are not exempt vary by state.
If your income is too high to qualify for a Chapter 7 bankruptcy, Chapter 13 bankruptcy may be a better option. Some people who qualify for Chapter 7 may nonetheless file for Chapter 13 in order to keep some assets or catch up on their mortgage payments. Chapter 13 repayment plans, on the other hand, are difficult to implement because all disposable income after certain allowances must be allocated toward debt payback over a three- to five-year period.
Which is Right for You?
As you can see, there are benefits and drawbacks to both types of bankruptcy protection. As bankruptcy attorneys in Las Vegas, we can assist you in determining the best strategy for your situation.
Freedom Law Firm is here to help.
Bankruptcy is often the last but necessary resort. It is a delicate and complex proceeding, and you want someone with plenty of experience to consult you and guide you through the process and help you determine the scope of the discharge.
In many cases, unless a party in interest files a complaint objecting to the discharge, the bankruptcy court may issue a discharge order relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors.If you would like to find out whether bankruptcy is the right option for you, please request a call-back by submitting a short online form. All initial consultations are free and confidential.