State Laws

Nevada Bankruptcy Laws

     

Bankruptcy is designed to assist in relieving those who have extraneous amounts of debt and who can only pay the minimum payments. It is also for those who have had outside interferences weigh on their finances, such as a divorce, a severe illness, a loss of employment, or a loss of a major client.

Bankruptcy laws have become stricter in recent years, far more than they ever were before. Bankruptcy could easily be handled through online do-it-yourself services in the past, but the new 2005 Bankruptcy Act has made petitioning for bankruptcy more complicated. Monthly payments have increased for payment plans and new regulations are now in place for granting bankruptcy. More paperwork is now required and the process is must more complicated and complex.

Before petitioning in Nevada individuals will need to gather all the necessary paperwork. These include tax returns from the past two years, monthly living expenses for the household, motor vehicle titles, major financial transactions, real estate deeds, secured debts, loan documents, unsecured debts, and property assets for possessions.

Filing for Bankruptcy in Nevada
All paperwork can be filed online through an Internet database with attorney assistance, through do-it-yourself online databases, or through face-to-face filing with an attorney. It is advised to consult an attorney to insure that all the necessary paperwork has been filed with all the new national stipulations.

Even for those who have filed for bankruptcy in the past, filing for bankruptcy now can be difficult. Do-it-yourself databases can be useful but at times some details may be exempt. After a petitioning, if the paperwork was incorrectly filled out or purposeful, false information was filed, the case will be dismissed by the court.

Means Test
Bankruptcy petitions are to be brought to the Nevada bankruptcy court where they will be subject to a means test. A means test will be taken for every petition for bankruptcy. This test will calculate an individual's income and personal expenses for the past six months against the income and expenses of the state of Nevada.

If an individual's expenses and income comes above the state's median then Chapter Thirteen bankruptcy will be advised. If an individual's expenses and income comes below the state's median then Chapter Seven bankruptcy will be advised. The means test is also designed to filter out those who are abusing the bankruptcy system. An abuse prevention act has also been passed to keep bankruptcy in use for only those who need its services.

Kind of Bankruptcy
Nevada has two different kinds of bankruptcy for individuals: Chapter Seven and Chapter Thirteen. Chapter Seven bankruptcy will liquidate non-exempt property through a trustee and use the acquired funds to pay creditors. This process can halt foreclosure and can relieve individuals of debts in six months or less.

Exempt items are categorized through the state of Nevada for what can be liquidated and what cannot. Chapter Thirteen bankruptcy will use an individual's current income to pay off creditors through a personal payment plan. Designated monthly payments will then be made for a maximum of five years or a minimum of three years.

See also:
Nevada Gun Laws
Nevada Divorce
Nevada DUI Laws
Nevada Misdemeanors External link (opens in new window)
Nevada Felony External link (opens in new window)
Nevada Expungement External link (opens in new window)