If your personal financial situation becomes too challenging and you acquire more debt than you’ll ever be able to pay off, there are two legal tools in the state of Nevada for your peace of mind: Chapter 7 and Chapter 13 bankruptcy protection.
As bankruptcy lawyers Las Vegas, we can explain the difference between the two and help you decide which might be the best decision for you and your family.
The biggest difference between the two is that Chapter 13 will involve a multi-year payment plan to repay at least part of your debt, while Chapter 7 proceedings will result in an immediate restart, with no repayment. Aside from that, there are benefits and possible disadvantages to both types of bankruptcy. Let’s look closer.
This can be your best option when you own property or a business that’s not covered by exemptions. An exemption is the dollar amount of maximum protection for your home, car, personal property, and other valuables. In a Chapter 7 filing, you’ll forfeit the property if it exceeds the exemption totals. With a Chapter 13 filing, you can work out a payment plan to save non-exempt assets.
This idea of making a payment plan can be burdensome. It means that over a period of three to five years you must make regularly scheduled payments to the bankruptcy court and be under the court’s control.
If your home is in foreclosure proceedings, you can keep it as long as you restart making your house payments and keep up with your Chapter 13 payment plan. Another advantage is that in the state of Nevada you can file repeatedly for Chapter 13 protection, with no waiting period between filings.
But since this is a more complex form of bankruptcy, a Chapter 13 will cost you more in legal fees, and the process could extend for several years during your payment plan.
This is a simpler type of bankruptcy. You’ll owe nothing to the courts or creditors once your filing is discharged, and future earnings are yours. It’s truly a fresh start. Also, since it’s a much simpler process, Chapter 7 will cost you less in legal fees and the process can usually be completed in a matter of months.
However, your non-exempt property or assets will be lost, so this isn’t necessarily the best choice if you own a lot of property or a valuable business. And in Nevada, you must have a gap of at least eight years between Chapter 7 filings.
Which is Right for You?
As you can see, both types of bankruptcy protection have advantages and disadvantages. As bankruptcy lawyers in Las Vegas, we can help you determine a strategy that will work best in your circumstances. So call us as soon as you even consider the possibility of bankruptcy.