Nevada Bankruptcy Exemptions & Law
Nevada Bankruptcy Law
Although U.S. bankruptcy cases are taking place in federal court under federal law, Nevada has chosen to introduce some of its own rules to protect the property of individuals filing for bankruptcy in the State. creditor protected property is called duty-free property, and should be available to you to continue your life after the bankruptcy is completed. US bankruptcy law allows states to set their own rules for forgiveness – Nevada does.
Bankruptcy law provides for tax exemptions in many states, but Nevada has decided that tax-exempt property rules must be applied when filing for bankruptcy. Fortunately, most Nevada tax exemptions are more generous than federal tax exemptions and can hold more property than they do under federal law.
Nevada’s Bankruptcy Exemptions
In Nevada, if you are married and file bankruptcy jointly, you can double most of the available exemptions unless clearly stated that you cannot do so.
Homestead exemption is limited to $550,000 inequity in a mobile home or house. A homestead declaration must be submitted to the County Recorder’s Office prior to filing bankruptcy to claim this bankruptcy exemption.
Example. Assume you own an $800,000 property with a $200,000 mortgage, leaving you with $600,000 in equity. You can register and claim the Nevada homestead exemption to safeguard all of the equity in your house if you declare Chapter 7 bankruptcy.
Equity refers to the amount of money you own.
Some property or benefits are funds that you are entitled to keep; therefore, protected within a bankruptcy case. Depending on the specific item, it can be protected fully or up to the amounts stated below.
For a week, you can deduct up to 75% of your disposable earnings of more than $770 and 82% of your disposable earnings of less than $770. Future earnings are similarly excluded as long as they are required to sustain you.
Motor Vehicle Exemption
Your equity in a car in Nevada is exempted to the tune of $15,000 every year. Whole value exemption holds true if vehicle is fitted for use by a handicapped person.
Recreational vehicles, yachts, and extra autos are not included in the motor vehicle exemption.
You have a $10,000 wildcard exemption from the State that you can use on any of your personal property.
Personal Property Exemptions
Below are the personal property exemptions in the State of Nevada]
- appliances, furniture, electronics, apparel, home goods, and yard equipment (eligible for up to $12,000 in equity)
- investment of up to $5,000 in jewelry, art, musical instruments, and literature
- health aids
- escrow and mortgage account balances
- photographs and keepsakes
- ore, fossils, and other geological specimens that are cataloged and numbered in reference books
- a burial plot or cash for a funeral ceremony kept in trust
Tools of the Trade Exemption
Your equity in professional equipment, materials, and publications that you use to carry out your trade or company might be exempted up to $10,000. Farmers may get an extra $4,500 in tax breaks on farm trucks, tools, equipment, supplies, and seeds. Finally, the State exempts you from keeping any weapons or clothes that are required by law.
The following public benefits are exempted:
- Social Security
- workers’ compensation
- unemployment compensation
- vocational rehabilitation benefits
- public assistance for children
The following pensions or retirement plans are fully protected under bankruptcy exemptions in Nevada or nonbankruptcy exemptions in the United States:
- SEP and SIMPLE IRAs, as well as defined benefit plans, are tax-exempt retirement accounts, profit-sharing, and money purchase plans.
- IRAs and Roth IRAs to the fullest extent possible (amount changes).
- Retirement perks for government employees.
- Payments for child and spousal support
- Earned income tax credit reimbursements from the state or federal government
- Wrongful death awards are required to help survivors.
- Future earnings compensation is required for your cooperation.
- Settlements of up to $16,150 for personal injuries
- Restitution to victims of crime
Conditions for Nevada Bankruptcy Exemptions
After living in Nevada for more than 180 days, you can petition for bankruptcy. However, you must dwell in Nevada for at least 730 days before filing to be eligible for Nevada exemptions. Otherwise, you’d rely on the exemptions from the prior state.
But imagine you didn’t live in any single state for the two years leading up to your bankruptcy petition. In that case, you’d use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing.
In addition, you must have acquired and owned the property for at least 1,215 days prior to filing for bankruptcy to be eligible for the full amount of the Nevada homestead exemption. If you don’t achieve this criteria, federal law limits your homestead exemption to $170,350. (this figure will adjust on April 1, 2022).
Process in Filing Bankruptcy in Nevada
Anyone considering filing for personal bankruptcy in the United States must first take a pre-bankruptcy credit counseling course that has been recognized by the United States Department of Justice-the Trusteeship Program. The course is intended to assist you in determining if bankruptcy is the best option for your debt troubles. When you file for bankruptcy, you must provide a certificate saying that you finished the program within the last 180 days.
If you have a lawyer representing you, he or she will normally file on your behalf. If you’re filing for bankruptcy on your own, you’ll begin by obtaining the appropriate forms for the United States, following the filing instructions at the Bankruptcy Court for the District of Nevada.
Cost of Bankruptcy in Nevada
It will cost you $338 to file for bankruptcy under Chapter 7. A Chapter 13 case requires a filing fee of $313. Those who cannot afford to pay the complete price in full might choose to pay in 120-day installments. You can also ask the court to waive the filing fee if you earn less than 150% of the poverty line.
Depending on where you reside in Nevada and the intricacy of your case, the cost of a personal bankruptcy attorney might vary substantially. In a straightforward Chapter 7 case, however, hiring an attorney to defend you normally costs between $800 and $1,200. It typically costs more for an attorney in a Chapter 13 case and the attorneys’ fees for a complicated Chapter 13 case can easily run $5,000 or more.
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 with, 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.