What You Need to Know About Bankruptcy in Las Vegas
Bankruptcy is the judicial process that gives a debtor in good faith a “reset button” by extinguishing most of his/her debts and settles outstanding obligations in a laid out plan to the extent the debtor has available assets. Working with experienced Las Vegas Bankruptcy attorneys is always a good start in this process.
Effects of filing for bankruptcy.
In general, filing for bankruptcy sets off an “automatic stay” which prevents creditors from demanding payment of debts. Most of these creditors are enjoined from taking action during the pendency of bankruptcy proceedings without prior leave of court. But in a bird’s eye view, bankruptcy filed by individuals in Nevada can fall under two common categories: Chapter 7 and Chapter 13 bankruptcies.
Chapter 7 bankruptcy essentially liquidates a debtor’s properties to pay off creditors. However, there are exemptions provided by law which means a debtor may still keep them e.g., home equity, automobile, personal belongings, clothes, tools essential for gainful employment, pensions, public benefits, etc. Anent the remainder of the assets, those nonexempt, they will be sold by an appointed trustee, and the funds proceeding therefrom will be divvied up among the creditors, respective of their claims.
Chapter 13 bankruptcy, on the other hand, provides for a reorganization of debts by permitting the debtor to repay debts either partially or in its entirety through a repayment plan spanning from three to five years. Under this type of bankruptcy, the debtor gets to keep some or all of his/her property, but the trade-off is that the debtor must pay the appointed trustee all disposable income while the repayment plan is in effect. The collected sum will be used to pay off creditors. Once the repayment plan has been fulfilled, the remaining dischargeable debts are enxtinguished.
Who typically files for Chapter 7.
Individuals who file Chapter 7 are usually those whose incomes are at the lower brackets and with few properties to protect. Chapter 7 bankruptcy will not totally stop foreclosure of a mortgage or car repossession, and so, to keep a house or car in a Chapter 7 proceeding, regular payments must still be made. What is enticing in Chapter 7 is that it can be helpful for car owners who do not want to continue making payments for a car loan or to surrender their vehicle. Homeowners also benefit from Chapter 7 by extinguishing the balance due on their mortgages subsequent to a foreclosure.
Who typically files for Chapter 13.
Chapter 13 filers are usually those who have a regular stream of income, homeowners wishing to save their homes and who can pay their mortgages in arrears fully within three to five years, and those homeowners without equity wanting to get rid of a second mortgage.
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.