Bankruptcy |
| DUMBRIGUE LAW FIRM |
| 633 South Fourth Street, 2nd Floor, Suite 9, Las Vegas, Nevada 89101 * (702) 638-0505 Office * (702) 233-0506 Facsimile |
Bankruptcy is too often looked down upon by many in our society. But this is because Bankruptcy
is also often misunderstood. It is not criminal to file for Bankruptcy. Nor does filing for Bankruptcy
make you a horrible person. Misfortunes and unforeseen circumstances happen to honest
people everyday leaving many overwhelmed and destitute with credit card bills and medical bills,
etc., that cannot be paid. Bankruptcy is an opportunity for the honest debtor to have a "fresh
start" in life.
Indeed, in Wetmore v. Markoe, 196 U.S. 68, 77, 25 S.Ct. 172, 176, 49 L.Ed. 390 (1904), the
Supreme Court said, "systems of bankruptcy are designed to relieve the honest debtor from the
weight of indebtedness which has become oppressive and to permit him to have a fresh start in
business or commercial life, freed from the obligation and responsibilities which may have resulted
from business misfortunes."
Thus, Bankruptcy should not be seen as an embarrassment because even the United States
Supreme Court recognizes that misfortunes happen to honest people.
Bankruptcy is an opportunity for you to get back on the right track so that you can be a better
citizen in our community. Bankruptcy is your right to a fresh start!
For more information, please contact our office today for a free 30-minute consultation.
is also often misunderstood. It is not criminal to file for Bankruptcy. Nor does filing for Bankruptcy
make you a horrible person. Misfortunes and unforeseen circumstances happen to honest
people everyday leaving many overwhelmed and destitute with credit card bills and medical bills,
etc., that cannot be paid. Bankruptcy is an opportunity for the honest debtor to have a "fresh
start" in life.
Indeed, in Wetmore v. Markoe, 196 U.S. 68, 77, 25 S.Ct. 172, 176, 49 L.Ed. 390 (1904), the
Supreme Court said, "systems of bankruptcy are designed to relieve the honest debtor from the
weight of indebtedness which has become oppressive and to permit him to have a fresh start in
business or commercial life, freed from the obligation and responsibilities which may have resulted
from business misfortunes."
Thus, Bankruptcy should not be seen as an embarrassment because even the United States
Supreme Court recognizes that misfortunes happen to honest people.
Bankruptcy is an opportunity for you to get back on the right track so that you can be a better
citizen in our community. Bankruptcy is your right to a fresh start!
For more information, please contact our office today for a free 30-minute consultation.
| BANKRUPTCY IN NEVADA |
| FREQUENTLY ASKED QUESTIONS ABOUT BANKRUPTCY |
What is bankruptcy? Bankruptcy allows individuals and businesses to seek relief from debts they cannot repay.
What are the different types of bankruptcy? There are four types of bankruptcy: Chapter 7, 11, 12, and 13.
Which bankruptcy filing is right for me?
Chapter 7: Individuals who choose this type of bankruptcy seek a discharge of all dischargeable debts. Chapter
7 bankruptcy involves a liquidation proceeding, in which a debtors' non-exempt property are sold and distributed
to creditors. Debts are primarily consumer debts (i.e., credit cards, personal loans, etc.). After reasonable
monthly expenses (i.e., mortgage, rent, utilities, insurance, etc.) are paid, individuals who file for Chapter 7
bankruptcy do not have sufficient money or any money at all to pay off those consumer debts.
Chapter 11: This type of bankruptcy is available to businesses who seek a reorganization of their debts.
Chapter 12: This type of bankruptcy is available to farmers and fisherman who seek to repay their debts over a
period of time.
Chapter 13: Individuals who choose this type of bankruptcy want to pay all or part of their debts because they
have non-exempt property they wish to keep. They are allowed to pay off all or part of their debts in installments
over a three to five-year period. Individuals must have a regular income and sufficient money after paying
reasonable monthly expense to pay off their debts.
Am I qualified to file for Chapter 7 under the new bankruptcy law? Under the new law, your current monthly
income is measured against your state’s median income for a family of your size. For example, the median
income in Nevada for a single wage earner is approximately $46,000. If you earn less than or equal to the
median income, you are qualified to file for Chapter 7. If you make more than the median income, you must pass
the “means test”?
What is the “means test”? The means test determines how much disposable income you have after subtracting
reasonable expenses and required debt payments. If you have sufficient disposable income, you will have to file
a Chapter 13 to repay your debts.
Do I need to take a credit counseling course before filing? Under the new bankruptcy law, individuals must
complete a credit counseling course from an approved credit counseling agency before filing for bankruptcy.
Additionally, individuals must complete a personal financial management course from an approved credit
counseling agency before they can receive a discharge.
The initial credit counseling course evaluates an individual’s financial affairs before a bankruptcy filing. The
personal financial management course ensures that a debtor receives the financial knowledge, tools, and
resources needed to live debt-free after a bankruptcy discharge.
What debts are dischargeable? Most unsecured debts are dischargeable in bankruptcy. Unsecured debts are
not tied to any property and are typically credit card debts and loans.
Secured debts are tied to a certain property, such as a car or home, and may be dischargeable in bankruptcy. In
this case, a debtor does not wish to retain the secured home and lapses in payment of that debt. As such, the
creditor with a secured interest in that secured debt has the right to take that property back (i.e., repossession of
your car or foreclosure on your home).
However, the following debts are non-dischargeable in bankruptcy:
1. Alimony
2. Child Support
3. Student loans
4. Luxury goods totaling more than $550, which were purchased within 90 days before your bankruptcy filing
5. Cash advances totaling more than $825 made within 70 days before filing
6. Government fines or penalties
7. Recent back taxes
8. Debts acquired through fraud
What am I allowed to keep? In Nevada, you may keep the following exempt property:*
1. A homestead valued up to $350,000
2. Private libraries valued up to $5,000
3. Household goods, yard equipment, and personal pictures and keepsake valued up to $12,000
4. Farm equipment, supplies, and stock valued up to $4,500
5. Money held in retirement plans, employee pension plans, or profit sharing plans
6. A vehicle valued up to $15,000
7. Tools of trade valued up to $10,000
*These are the major bankruptcy exemptions.
Can I keep my home and vehicle? A debtor may keep his/her home and/or vehicle by continuing to make timely
payments and by reaffirming the debt with the creditor. However, it is up to the creditor whether or not to reaffirm
the debt.
What happens during the Chapter 7 bankruptcy process?
1. An individual must complete a credit counseling course with an approved credit counseling agency before
filing for bankruptcy. A certificate of completion will be issued to the individual and must be filed with his/her
bankruptcy petition.
2. The bankruptcy petition, certificate, and necessary schedules are filed with the bankruptcy court.
3. A 341 Meeting of Creditors is scheduled 30 days after filing. The debtor must appear at this meeting before
a bankruptcy trustee. If the debtor fails to appear, the debtor’s case is dismissed. At this meeting, creditors are
given the opportunity to appear and to ask the debtor questions about the debtor’s financial affairs.
4. After the 341 Meeting of Creditors, the debtor must complete a personal financial management course
before the debtor can receive a discharge.
5. Generally, a debtor receives a discharge within three to four months after filing for Chapter 7.
How long does it take before I receive a discharge? Usually, a debtor receives a discharge within three to four
months after filing for Chapter 7.
I previously filed for bankruptcy. Can I file again? A Chapter 7 can be filed if a debtor received a discharge
under a prior Chapter 7 more than eight (8) years ago or received a discharge under a prior Chapter 13 more than
six (6) years ago.
A Chapter 13 can be filed if a debtor received a discharge under a prior Chapter 13 more than two (2) years ago or
received a discharge under a prior Chapter 7, 11, or 12 more than four (4) years ago.
Will filing for bankruptcy stop my creditors from contacting me? Yes. Creditors must cease from collecting
any debt from you. They cannot contact you, initiate or continue any lawsuits against you, or garnish your wages.
This process is called an “automatic stay.” However, secured creditors may seek to lift the automatic stay if you
fail to make timely payments on a secured debt. For example, a creditor holding a lien on your vehicle may seek
to lift the automatic stay and repossess your vehicle if you fail to make timely payments.
Can my employer fire me for filing bankruptcy? No. Employers are prohibited from discriminating against you
for filing bankruptcy as stated in U.S.C. Sec. 525.
How long does bankruptcy stay on my credit report? A bankruptcy is reported on your credit report for up to 10
years.
Why should I file for bankruptcy? Your decision to file for bankruptcy is personal and will be influenced by the
amount of serious debt you owe and your ability to repay them. You should consider bankruptcy if you are:
• having difficulty making timely payments on your debts;
• facing foreclosure;
• facing repossession;
• having your wages garnished; or
• unemployed.
What are the different types of bankruptcy? There are four types of bankruptcy: Chapter 7, 11, 12, and 13.
Which bankruptcy filing is right for me?
Chapter 7: Individuals who choose this type of bankruptcy seek a discharge of all dischargeable debts. Chapter
7 bankruptcy involves a liquidation proceeding, in which a debtors' non-exempt property are sold and distributed
to creditors. Debts are primarily consumer debts (i.e., credit cards, personal loans, etc.). After reasonable
monthly expenses (i.e., mortgage, rent, utilities, insurance, etc.) are paid, individuals who file for Chapter 7
bankruptcy do not have sufficient money or any money at all to pay off those consumer debts.
Chapter 11: This type of bankruptcy is available to businesses who seek a reorganization of their debts.
Chapter 12: This type of bankruptcy is available to farmers and fisherman who seek to repay their debts over a
period of time.
Chapter 13: Individuals who choose this type of bankruptcy want to pay all or part of their debts because they
have non-exempt property they wish to keep. They are allowed to pay off all or part of their debts in installments
over a three to five-year period. Individuals must have a regular income and sufficient money after paying
reasonable monthly expense to pay off their debts.
Am I qualified to file for Chapter 7 under the new bankruptcy law? Under the new law, your current monthly
income is measured against your state’s median income for a family of your size. For example, the median
income in Nevada for a single wage earner is approximately $46,000. If you earn less than or equal to the
median income, you are qualified to file for Chapter 7. If you make more than the median income, you must pass
the “means test”?
What is the “means test”? The means test determines how much disposable income you have after subtracting
reasonable expenses and required debt payments. If you have sufficient disposable income, you will have to file
a Chapter 13 to repay your debts.
Do I need to take a credit counseling course before filing? Under the new bankruptcy law, individuals must
complete a credit counseling course from an approved credit counseling agency before filing for bankruptcy.
Additionally, individuals must complete a personal financial management course from an approved credit
counseling agency before they can receive a discharge.
The initial credit counseling course evaluates an individual’s financial affairs before a bankruptcy filing. The
personal financial management course ensures that a debtor receives the financial knowledge, tools, and
resources needed to live debt-free after a bankruptcy discharge.
What debts are dischargeable? Most unsecured debts are dischargeable in bankruptcy. Unsecured debts are
not tied to any property and are typically credit card debts and loans.
Secured debts are tied to a certain property, such as a car or home, and may be dischargeable in bankruptcy. In
this case, a debtor does not wish to retain the secured home and lapses in payment of that debt. As such, the
creditor with a secured interest in that secured debt has the right to take that property back (i.e., repossession of
your car or foreclosure on your home).
However, the following debts are non-dischargeable in bankruptcy:
1. Alimony
2. Child Support
3. Student loans
4. Luxury goods totaling more than $550, which were purchased within 90 days before your bankruptcy filing
5. Cash advances totaling more than $825 made within 70 days before filing
6. Government fines or penalties
7. Recent back taxes
8. Debts acquired through fraud
What am I allowed to keep? In Nevada, you may keep the following exempt property:*
1. A homestead valued up to $350,000
2. Private libraries valued up to $5,000
3. Household goods, yard equipment, and personal pictures and keepsake valued up to $12,000
4. Farm equipment, supplies, and stock valued up to $4,500
5. Money held in retirement plans, employee pension plans, or profit sharing plans
6. A vehicle valued up to $15,000
7. Tools of trade valued up to $10,000
*These are the major bankruptcy exemptions.
Can I keep my home and vehicle? A debtor may keep his/her home and/or vehicle by continuing to make timely
payments and by reaffirming the debt with the creditor. However, it is up to the creditor whether or not to reaffirm
the debt.
What happens during the Chapter 7 bankruptcy process?
1. An individual must complete a credit counseling course with an approved credit counseling agency before
filing for bankruptcy. A certificate of completion will be issued to the individual and must be filed with his/her
bankruptcy petition.
2. The bankruptcy petition, certificate, and necessary schedules are filed with the bankruptcy court.
3. A 341 Meeting of Creditors is scheduled 30 days after filing. The debtor must appear at this meeting before
a bankruptcy trustee. If the debtor fails to appear, the debtor’s case is dismissed. At this meeting, creditors are
given the opportunity to appear and to ask the debtor questions about the debtor’s financial affairs.
4. After the 341 Meeting of Creditors, the debtor must complete a personal financial management course
before the debtor can receive a discharge.
5. Generally, a debtor receives a discharge within three to four months after filing for Chapter 7.
How long does it take before I receive a discharge? Usually, a debtor receives a discharge within three to four
months after filing for Chapter 7.
I previously filed for bankruptcy. Can I file again? A Chapter 7 can be filed if a debtor received a discharge
under a prior Chapter 7 more than eight (8) years ago or received a discharge under a prior Chapter 13 more than
six (6) years ago.
A Chapter 13 can be filed if a debtor received a discharge under a prior Chapter 13 more than two (2) years ago or
received a discharge under a prior Chapter 7, 11, or 12 more than four (4) years ago.
Will filing for bankruptcy stop my creditors from contacting me? Yes. Creditors must cease from collecting
any debt from you. They cannot contact you, initiate or continue any lawsuits against you, or garnish your wages.
This process is called an “automatic stay.” However, secured creditors may seek to lift the automatic stay if you
fail to make timely payments on a secured debt. For example, a creditor holding a lien on your vehicle may seek
to lift the automatic stay and repossess your vehicle if you fail to make timely payments.
Can my employer fire me for filing bankruptcy? No. Employers are prohibited from discriminating against you
for filing bankruptcy as stated in U.S.C. Sec. 525.
How long does bankruptcy stay on my credit report? A bankruptcy is reported on your credit report for up to 10
years.
Why should I file for bankruptcy? Your decision to file for bankruptcy is personal and will be influenced by the
amount of serious debt you owe and your ability to repay them. You should consider bankruptcy if you are:
• having difficulty making timely payments on your debts;
• facing foreclosure;
• facing repossession;
• having your wages garnished; or
• unemployed.
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