Filing for bankruptcy can be a daunting decision to make, but it may be the best option for some homeowners. If you’re thinking about filing for bankruptcy, it’s important to understand the process and your options.
This article will provide an overview of bankruptcy in Nevada and outline the steps you need to take if you decide to file. So, whether you’re considering bankruptcy or just want to know more about your options, keep reading.
What Is Bankruptcy?
Bankruptcy laws allow people to start over by liquidating assets and, in some cases, creating repayment plans for their creditors.
Bankruptcy laws serve the following purposes:
- Provide a fresh start to honest debtors by relieving them of most of their debts.
- Pay debtors in an orderly manner if there is property to repay.
Signs that You May Need to File for Bankruptcy
Knowing that bankruptcy is not suitable for everyone is important when considering it.
Here are some signs that you may need to file for bankruptcy:
- You’re being threatened with foreclosure.
- You’re frequently being called by debt collectors.
- You’re using your credit cards to pay for rent and food.
- You’re unable to work a payment plan with your creditors.
- You’re unable to stay current with your mortgage payments.
Is Filing for Bankruptcy the Only Option?
You should weigh all your options before considering bankruptcy. Two alternatives to bankruptcy are settling your debts or taking credit counseling. A financial advisor can help you decide which option is right for you.
Consolidating your debt can also reduce your monthly payments. Doing so will save money on interest and repay your debt more quickly.
In addition, you have the option of negotiating directly with your creditor. You will save yourself from bankruptcy if you are able to reach an agreement.
The Types of Bankruptcy
There are two main types of bankruptcies available for individuals in Nevada: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is usually the first option considered because it is quick to complete and does not require repayment to creditors. It is also a good option for people who have minimal work and living needs so that unnecessary luxury items won’t be lost. Lastly, you should keep in mind that you won’t be able to catch up on mortgage or car payments if you file a Chapter 7 bankruptcy.
Chapter 13 filers, on the other hand, are given three to five years to repay their debts. There are many distinctions between Chapter 13 and Chapter 7. For example, you can keep all your property while avoiding foreclosure and car repossession. Additionally, you can negotiate a payment plan with your creditor for debts that cannot be discharged in bankruptcy.
How to File for Bankruptcy in Nevada
There are some people who avoid bankruptcy because they are concerned they will not be able to afford a lawyer. Bankruptcy attorneys are expensive and the most costly part of filing for bankruptcy in Nevada. On the bright side, you don’t need an attorney to file for bankruptcy.
Below are the steps to do so.
- Gather Your Nevada Bankruptcy Documents: You will need copies of your tax returns from the previous two years and your last 60-day pay stubs.
- Take a Credit Counseling Course: Learn more about the credit counseling course here.
- Fill Out the Bankruptcy Forms: You can download the forms free through USCOURTS.gov.
- Pay Your Filing Fee: Chapter 7 bankruptcy requires a court filing fee of $338. When your income does not exceed 150% of the poverty guidelines in Nevada, you can request a filing fee waiver.
- Print Your Bankruptcy Forms: Make sure to print all forms on regular, white 8.5″ x 11″ paper using black ink.
- File the Forms With the Nevada Bankruptcy Court: Nevada’s Bankruptcy Court has offices in Reno and Las Vegas. For residents of Clark, Esmeralda, Lincoln, and Nye counties, you must file your paperwork in Las Vegas. If not, submit your forms to the Reno office.
- Mail Documents to Your Trustee: You will be assigned a trustee after filing for bankruptcy.
- Take Another Course: Attend a debtor education course within 60 days of the 341 meeting.
- Attend Your 341 Meeting: Your creditors can attend this meeting to ask questions.
What Happens After You File for Bankruptcy in Nevada?
By declaring bankruptcy, you can discharge most unsecured debts. However, student loans, child support, and alimony are not dischargeable in bankruptcy. Depending on your bankruptcy choice, you may also have to surrender some assets.
Does Bankruptcy Affect Your Credit Score?
When you file for bankruptcy, your credit report will reflect bankruptcy for seven to ten years. This may reduce your chances of getting a loan or credit line in the future.
Rebuilding Your Credit Post Bankruptcy
In spite of popular belief, bankruptcy doesn’t mean your financial future is over.
The following measures can help you rebuild your credit:
- Taking out a small loan.
- Guaranteeing on-time payments.
- Applying for a secured credit card.
- Maintaining a good payment history.
- Checking your credit report for errors.
- Becoming an authorized user on a credit card.
Sell Your House for Cash & Avoid Bankruptcy in Nevada with Favor Home Solutions
The process of filing for bankruptcy can be intimidating, and it is natural to try to avoid it at all costs. If you’re feeling overwhelmed by your debts and worried about the future, selling your home may be the best solution for you. By working with a trusted home buyer, you can avoid bankruptcy and regain your peace of mind. Contact us at Favor Home Solutions today to learn more about how we can help you sell your home quickly as-is, without agent fees, and hassle-free!