Can I Keep My Assets if I File for Bankruptcy in Nevada?

A common concern among people filing for bankruptcy is whether they can retain their car, home, and other assets. In most cases, you can keep your assets if you file for bankruptcy. Nevada laws outline essential assets that an individual should retain even when going through bankruptcy. These are known as exemptions. Assets like your primary residence, car, work tools, household appliances, and some other material possessions can be protected from creditors up to a certain dollar value.

At Randolph Law Firm, we can design a strategy that helps you maximize your exemptions in Nevada. Find out more about protecting assets from bankruptcy using Nevada exemptions below. Then, call our bankruptcy lawyers to get your case started.

How Does Asset Retention Work During Bankruptcy?

How a bankruptcy filing affects your property is one of the top questions to ask a bankruptcy lawyer. A myth many people believe is that you lose everything when going through bankruptcy. While the bankruptcy trustee overseeing your case can liquidate some of your assets to pay off creditors, Nevada law has exemptions that allow you to protect a certain amount of property and keep them off limits for creditors. You can keep property covered by these exemptions throughout the bankruptcy process.

These exempt assets include property that’s necessary for working or living. Assets that can’t be exempted from bankruptcy proceedings are known as non-exempt assets. Nevada law exempts a diverse range of property. When used properly, these exemptions can help you keep most or all of your assets. You’ll end up paying creditors above what they’re entitled to if you don’t take advantage of exemptions.

Some states allow bankruptcy filers to choose between using federal and state exemptions. If you file for bankruptcy in Nevada, you must use the state’s exempt property rules unless you moved to the state recently.

Does Asset Retention Apply in All Chapters of Bankruptcy?

Bankruptcy exemptions play a critical role in both Chapter 7 and Chapter 13 bankruptcies. However, the rules that apply to these bankruptcies with regard to exemptions are slightly different.

In a Chapter 7 bankruptcy, you can keep all your exempt property. Your bankruptcy trustee will accumulate and sell your non-exempt assets. The trustee will distribute proceeds from the sales to your creditors.

You don’t have to sell exempt or non-exempt property when filing for Chapter 13 bankruptcy. You can keep all your assets provided you keep up with your repayment plan. Under a Chapter 13 bankruptcy, you’ll have a repayment plan that will allow you to pay part of your debts over three to five years.

The plan can include payments you’re behind on, such as car and mortgage payments, to protect you from losing the property. Creditors in a Chapter 13 bankruptcy aren’t supposed to be worse off than creditors in a Chapter 7 bankruptcy. As a result, the value of your non-exempt assets, which would’ve been sold in a Chapter 7 bankruptcy, is included in Chapter 13 plan payments.

Exempt vs. Non-Exempt Assets in Nevada

There are some distinctions when considering exempt and non-exempt assets in Nevada.

What Are Common Exempt Assets in Bankruptcy?

There are many exemptions available in Nevada that can be beneficial to your situation. The most commonly used ones include:

• Homestead exemption: You can use this exception to protect up to $605,000 of your equity in your house or mobile home. For example, suppose your home is worth $700,000, and you still owe $200,000 on your mortgage. Your equity in the house is $500,000. You can use the homestead exemption to protect the house since your home equity is less than the homestead exemption amount. You have to record a homestead declaration before claiming this exemption.
• Motor vehicle exemption: Nevada allows you to protect up to $15,000 (or $30,000 for married couples) of equity in your motor vehicle. Therefore, you can generally keep your car if you stay current on payments and your equity in the car is less than $15,000. There’s a special exception for people with disabilities. You can protect unlimited equity in a vehicle if it’s equipped to help a disabled person.
• Income and tools of the trade exemptions: You can exempt 82% of a disposable income of $770 a week or less, 75% of disposable earnings higher than $770 a week, or 50 times the federal minimum hourly wage, whichever is greater. Nevada also lets you exempt up to $10,000 of your equity in the professional equipment, tools, books, and supplies you need to do your trade or business.
• Retirement exemptions: Most pension and retirement benefits are exempt from bankruptcy. You can keep ERISA-qualified pension plans or stock bonus plans up to $1 million. The retirement benefits of public employees are fully exempt.
• Personal property exemptions: Nevada provides a number of bankruptcy exemptions for personal property you own. For example, household goods like appliances, furniture, clothing, and yard equipment valued at up to $12,000 are exempt. You can exempt jewelry, art, musical instruments, and books of up to $5,000 in value. All health aids are exempt. You can keep personal injury compensation of up to $16,150.
• Wildcard exemption: The Nevada wildcard exemption can exempt up to $10,000 in assets for an individual debtor and $20,000 for a couple. You can apply the wildcard exemption toward protecting assets that would otherwise be non-exempt. It’s critical to use the wildcard exemption wisely, as it can be significantly helpful in protecting your financial interests. A bankruptcy lawyer can help you get the most out of this tool.

What Are Considered Non-Exempt Assets?

Non-exempt assets typically include items considered non-essential or luxurious. These may include a second home or vacation property, second cars, luxury clothing, boats, significant cash, stocks, and bonds beyond the exemption limits, antiques, family heirlooms, collections of precious coins or stamps, valuable artwork, and expensive jewelry exceeding the exemption limit.

How to Determine the Value of Exempt Assets

When you file for bankruptcy, you must list all your assets and include a value estimate of each. It’s crucial to establish accurate values of your property and legal exemptions before filing for bankruptcy.

The current value is the standard you should use to value your assets. For personal property like household goods, your valuation should be based on how much it would cost to replace the items with others of the same condition and age. For any real property, you’ll need to determine what you could sell it for today, which is the fair market value. You’ll also need to review your actual equity in your property, which is the difference between a property’s fair market value and the amount you owe on it.

Websites can help you estimate the value of your property. Online real estate marketplaces like Zillow and Realtor can give a rough estimate of your home’s market value. Car valuation websites like Kelley Blue Book and Edmunds, and local car dealerships, can help you determine the retail value of vehicles.

Professional appraisals are also an option. Having artwork, collectibles, and jewelry professionally appraised could be hugely beneficial. You could also hire a professional car appraiser to examine your car and place a value on it. A full home appraisal can help you establish your home’s value more accurately, particularly if your home is close to Nevada’s homestead exemption cutoff.

How a Bankruptcy Lawyer Can Help You

Overvaluing and undervaluing your assets and failing to apply exemptions to your belongings properly could have serious consequences, such as losing property you could’ve kept, being forced to pay for it, being charged with bankruptcy fraud, and denial of discharge. You could avoid such issues by consulting a bankruptcy lawyer in your area. An experienced Las Vegas bankruptcy lawyer has in-depth knowledge of Nevada’s exemption laws and will help you value your property correctly and properly apply for and get all the available exemptions.

Without competent legal advice, the chapter you file for could be wrong for your situation and result in having the trustee sell your assets involuntarily and limit the extent of relief bankruptcy provides. A bankruptcy attorney will review your case comprehensively and advise you on the type of bankruptcy or debt relief solution that’s most appropriate for your situation. If you’re married, an attorney will advise whether an individual or joint bankruptcy filing makes more sense for your circumstances.

How much does a bankruptcy lawyer cost? The complexity of your bankruptcy case is a significant determinant. It generally costs more to hire a bankruptcy lawyer in a Chapter 13 case than a Chapter 7 case because Chapter 13 cases are usually more complex.

The bankruptcy court doesn’t give legal advice. Let Randolph Law Firm bankruptcy lawyers guide you from start to finish to make claiming exemptions and the other steps involved in going through a Nevada bankruptcy a lot simpler.