You May Be Able to Keep Your Home When Filing Bankruptcy
Under Nevada bankruptcy laws, a homeowner is allowed to keep their home as long as certain conditions are met. Rules vary depending on the type of bankruptcy filed. Nevada has some of the most lenient bankruptcy regulations in the country, but choosing the right bankruptcy plan is essential.
Choosing the Right Bankruptcy Plan
Chapter 7
In Chapter 7 bankruptcy, an appointed bankruptcy trustee liquidates non-exempt assets and uses the proceeds from the sale to pay the filer’s debts. Under Chapter 7 bankruptcy laws, debtors are allowed to keep certain property, regardless of their specific financial circumstances and the amount of debts owed. If property is secured by a loan and payments are not made, part of the debtor’s property may be subject to repossession by lien holders, however, equity in the property is protected by exemptions laws.
To qualify for a homestead exemption, the property must be worth $550,000 or less. Debtors can not exempt more than $125,000 in home equity for a house that was purchased less than three years and four months before bankruptcy was filed. Debtors who qualify for the homestead exemption must still keep mortgage payments, property taxes, and homeowner’s insurance current, or the lender can petition the court to remove the bankruptcy stay and allow a foreclosure to proceed. There are variations of these rules, so it’s important to consult with a qualified bankruptcy attorney to see how they can help you save your home while filing for chapter 7. That’s what Randolph Law Firm does to help you, save your home!
Chapter 13
In Chapter 13 bankruptcy, the court establishes a repayment plan that allows the filer to pay off debts over a three-to-five-year period. A Chapter 13 bankruptcy plan is also administered by an appointed trustee, but assets are not liquidated to pay off debts. On April 1, 2016, the upper debit limits for Chapter 13 bankruptcy increased, however, there are still restrictions on qualifying debts. To qualify for Chapter 13 bankruptcy, debtors must have less than $1,184,200 in secured loans and less than $394,725 in unsecured loans.
Once a bankruptcy is filed, the court grants an automatic stay of collection efforts, including collection on mortgage debts. The lender must stop all foreclosure efforts that have been started. A Chapter 13 repayment plan allows homeowners to catch up on past due mortgage payments over the plan’s repayment period. Debtors are allowed to prioritize their debts and make higher payments on whichever debts they choose. Chapter 13 also allows a discharge of unsecured mortgages on a home.
We realize the decision on which chapter can be difficult, but that is what our free consultation will help to identify what’s best for you and your family to get your family back on financial track. For help with filing bankruptcy and legal advice in Nevada, contact the Randolph Law Firm in Las Vegas at 702-757-7777 for a free consultation today!
