Any person, even the self-employed, may qualify for bankruptcy. Depending on their circumstances, individuals have two chapters under which they may file: a Chapter 7, and in some instances a Chapter 11 case or a Chapter 13 case. Our free consultation will assist you in deciding what may be the best option or whether an option other than bankruptcy may be best. A Chapter 11 case is not just for large companies. It is also for those who own businesses and have substantial assets and debts.
A Chapter 7 case is commonly known as “Liquidation.” However, that does not mean you will lose anything in bankruptcy. We carefully analyze your situation to ensure that all of your assets are protected by “exemptions” designated by applicable law. If not all are protected, we will advise you on what to do next.
A trustee is appointed, and the trustee’s main job is to look for nonexempt assets to sell to pay creditors’ claims. Again, all the debtor’s assets are frequently exempt, and there’s little or nothing for the trustee to liquidate. Then, typically, you receive a discharge about 90 days after you file for bankruptcy. A Chapter 7 case typically lasts 3–4 months, from the filing day to the discharge date.
A chapter 13 case is a payment plan, with a 3 -5-year term, depending on your gross income. The Plan is not based on the amount of your debt. It is generally based on your excess income after necessary monthly expenses. Typically, creditors initially receive a minor percentage of their debts. There are good reasons you may want to file a Chapter 13 case to pay off tax debt or remove a second mortgage from your home. Chapter 13 is also a case that allows you to run your small business without interruption.
A trustee is appointed in a Chapter 13 case, but his job is to monitor the plan, ensure the debtor pays all of his excess income into the plan, and pay creditors from the debtor’s plan payments. The bankruptcy trustee does not interfere with your daily life. Then, you receive a discharge after you have made all your payments under the plan.
Almost everyone has the “right” to file for bankruptcy, and it isn’t a decision whether your case will be denied. Instead, the court and trustee view your situation based on whether you have any non-exempt assets or excess income. Our free consultation advises you of these issues and how to assess your options before we file your case.
The state of Nevada has rather generous exemptions to protect your assets, so you are expected to retain all of them in a Chapter 7 case. In our initial consultation, we will analyze your asset situation and explain how you are protected. If you have non-exempt assets, we will advise you on your options for dealing with such assets. For example, each debtor gets one vehicle to exempt so long as it has less than $15,000 of equity; the Homestead exemption protects your residence up to $600,000 so long as you have owned the property for more than 3.3 years; necessary household items such as furniture, appliances, kitchen wares, household tools, and electronic items are exempt up to $12,000 per debtor; tax-exempt funds like 401(k)s and IRAs are exempt up to $1,000,000; family heirlooms and keepsakes, e.g., wedding rings – unlimited; tools of the debtor’s trade up to $10,000; income from work up to 75%; and each debtor gets what is characterized as a catchall exemption up to $1000 that can be asserted against anything. So, if you keep your house or car, you simply continue making regular monthly payments until paid in full, and your home or car is unaffected. If a Chapter 7 case presents difficulties for you, we will discuss the benefits of a Chapter 13 case and/or Chapter 11 case.
Income taxes can sometimes be dischargeable if they are more than three years old, from a filed return, and the debt was assessed by the IRS within 240 days before the filing of the bankruptcy.
You are required to list all of your debts in bankruptcy. Unsecured debts like medical bills, credit cards, etc., will typically be legally discharged. However, you have the right to continue to pay debts if you want to after the bankruptcy.
During our initial consultation, we will present your options to you. Not everyone wants to file bankruptcy, nor does everyone have to. We offer other suggestions and services to deal with creditors and negotiate a reasonable pay-off.
If you are in an emergency situation, for example, a foreclosure is pending on your house, your car is soon to be repossessed, or even your wages are soon to be garnished, we may file an emergency case immediately. This will put you under the protection of the bankruptcy court, so no creditor may take action against you.
There is no question that bankruptcy will affect your credit, but so does any other adverse credit information. It may take as little as two years to rebuild your credit, and you may be able to buy a home or obtain other credit. We believe that in the creditors’ view, when all of your debt is discharged, you become a better credit risk than you were before the bankruptcy, so long as you have a decent income stream (e.g., job) and are paying your necessary expenses because your discharge will have wiped out all of your other debt.
If you handle your credit responsibly after bankruptcy, with on-time payments of your auto loan, etc., you can rebuild your credit reputation in a few years. Approximately two years after discharge, most people can qualify for a home mortgage with favorable terms. Open a Low Balance Credit Card or a Secured Credit Card: The only way to rebuild your credit is to use credit. You will likely have to pay an annual fee to obtain a high-interest credit card post-bankruptcy. Start with a low-balance credit card. For example, you may be approved for a $300 limit. Credit unions are an excellent place to start. Use about 10% of your monthly credit limit, and always pay the balance in full when you get your statement. A year of on-time payments will improve your credit score. Remember to carry a balance and stay within 10% of your available credit.
Review your credit reports at AnnualCreditReport.com (free service) to ensure your old account statuses match the bankruptcy outcomes. Annual Credit Report links you to the 3 major credit bureaus. You can receive them once a year for free.
No two clients are the same, and charging everyone the same fee would be unfair. In our free consultation, we discuss your situation to determine how simple or complex it is and quote you a reasonable fee. We can work out payment terms if necessary.