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How Will Bankruptcy Impact Your Life

On Behalf of | Aug 30, 2015 | Bankruptcy Law, Business Law

When times are tough, a number of people rely on credit cards to help them pay their bills. Reliance upon debt can become a burden quickly. If an individual fails to pay off their debts, they can start dealing with calls from collection agencies. Soon, legal claims can be filed against an individual if they do not have the financial means to pay for their debts. Bankruptcy can become the only option an individual has to pay off their debts and move forward with their life.

High Interest Rates and Debt

High interest rates on credit cards, personal loans, and other loans can cause serious financial strain. In some situations the only option available is to declare bankruptcy if you have previously tried working with creditors to reduce interest rates.

How Bankruptcy Impacts Your Life

If you declare bankruptcy, you will find relief from financial strain. When you declare bankruptcy, our lawyers will work with you to file the correct paperwork. Chapter 7 and Chapter 13 bankruptcy both have different methods to eliminate debt. Some individuals will pay back their debts over time, with a large percentage that is eliminated through bankruptcy. The other style of bankruptcy will pay off your debts by reclaiming some assets.

Declaring Bankruptcy in Henderson

Bankruptcy laws are designed to help individuals have a fresh start on life. Under Exemption Laws of Nevada, your assets may be protected as they are deemed “judgement proof”. Exemption laws will not protect you from interest debt and harassing phone calls from creditors until you declare bankruptcy.

Exemption laws will not protect you from collection of child support or tax debts. Any property you pledge as collateral for a money loan can be taken from you by the creditor. Nondishchargeable debts are those that you are responsible for, and no style of bankruptcy will be able to remove them.

What Kind of Bankruptcy Do You Qualify For?

Chapter 7 and Chapter 13 are the most common types of bankruptcy. Chapter 7 will allow you to eliminate most unsecured debts by providing all “non-exempt” property. Most individuals filing for Chapter 7 bankruptcy in Henderson rarely have non-exempt property or equity. Chapter 7 bankruptcies are commonly called “no asset” bankruptcies. Chapter 13 bankruptcy will take 3 to 5 years to repay as you commit to repaying a portion of your debts instead of giving up property. Chapter 13 bankruptcy requires you to follow a strict budget that is monitored by court trustees. Failure to make a monthly payment will fail Chapter 13 bankruptcy, causing you to remain with your debts if you do not convert to a Chapter 7 bankruptcy.

Nevada Bankruptcy Means Test

Before an individual can declare bankruptcy, they will need to undergo a “means test.” This test will determine which type of bankruptcy you qualify for based on the following factors:

  • Monthly income
  • Amount of debt
  • Other financial considerations

If your annual income is less than the Nevada median income of your household size, you are eligible for Chapter 7 or Chapter 13 bankruptcy. If you have a higher income level, you will need to list all your expenses to estimate your disposable income for the next five years.

Where to File for Bankruptcy in Nevada

If you have lived in Nevada for 91 days of the past six months, you can file at the proper courthouse based on your zip code. At Tony M. May, P.C., we are here to help you file the appropriate paperwork to move forward with your bankruptcy case. We will assist in making the bankruptcy process as easy as possible, and will provide assistance in meeting with the court in person. Contact our Henderson law firm for additional bankruptcy information.