Although U.S. bankruptcy cases are taking place in federal court under federal law, Nevada has some of its own rules to protect the property of individuals filing for bankruptcy in the State.
Bankruptcy law provides for exemptions in many states, Nevada has exempt property rules must be applied when filing for bankruptcy. Fortunately, most Nevada exemptions are more generous than federal exemptions and can hold more property than they do under federal law.
In Nevada, if you are married and file bankruptcy jointly, you can double most of the available exemptions unless clearly stated that you cannot do so.
Homestead exemption is limited to $605,000 in equity in a mobile home or house.
Example. Assume you own an $800,000 property with a $200,000 mortgage, leaving you with $600,000 in equity. You can claim the Nevada homestead exemption to safeguard all of the equity in your house if you declare bankruptcy.
Equity refers to the value of ownership interest in an asset after deducting any liabilities associated with that asset.
Some property or benefits are funds that you are entitled to keep; therefore, protected within a bankruptcy case. Depending on the specific item, it can be protected fully or up to the amounts stated below.
For any workweek, you can exempt up to 75% of your disposable earnings of more than $770 and 82% of your disposable earnings of less than $770. Future earnings are similarly excluded as long as they are required to sustain you.
Any equity you may have in a car in Nevada is exempted up to $15,000. Whole value exemption holds true if vehicle is fitted for use by a handicapped person.
Recreational vehicles, yachts, and extra autos are not included in the motor vehicle exemption. There is only one motor vehicle exemption per Debtor.
You have a $10,000 wildcard exemption that can be used on any of your personal property. For joint debtors it is $10,000 per filer.
Below are some personal property exemptions in the State of Nevada:
Your equity in professional equipment, materials, and publications that you use to carry out your trade or company might be exempted up to $10,000. Farmers may get an extra $4,500 in exemptions on farm trucks, tools, equipment, supplies, and seeds.
The following public benefits are exempted:
The following pensions or retirement plans are fully protected under bankruptcy exemptions in Nevada:
After living in Nevada for more than 180 days, you can petition for bankruptcy in the state of Nevada. However, you must dwell in Nevada for at least 730 days before filing to be eligible for Nevada exemptions. Otherwise, you’d rely on the exemptions from the prior state.
But imagine you didn’t live in any single state for the two years leading up to your bankruptcy petition. In that case, you’d use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing.
In addition, you must have acquired and owned the property for at least 1,215 days prior to filing for bankruptcy to be eligible for the full amount of the Nevada homestead exemption. If you don’t achieve this criteria, federal law limits your homestead exemption to $170,350. (this figure will adjust on April 1, 2022).
Bankruptcy is often the last but necessary resort. It is a delicate and complex proceeding, and you want someone with plenty of experience to consult with, guide you through the process and help you determine the scope of the discharge.
In many Chapter 7 cases, unless a party in interest files a complaint objecting to the discharge, the bankruptcy court may issue a discharge order relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors.