Declaring Chapter 7 or Chapter 13 bankruptcy may be an option to give you a fresh start financially. But in some cases, a bankruptcy trustee can sell your property in order to pay your creditors. If you have tools or equipment you need to perform your job, the possibility of having those tools sold by the bankruptcy court is unacceptable. After all, what is the point of a financial fresh start if you are unable to make a living?
Thankfully, Nevada has an extensive list of exemptions that apply to certain property when you file for bankruptcy. If your property is exempt, your unsecured creditors cannot force you to sell it in order to satisfy their claims against you. One of those exemptions applies to tools of the trade.
NEVADA TOOLS OF THE TRADE EXEMPTION
It’s not hard to see why Nevada law might exempt the items you need to earn a living. If you have tools or equipment that you rely on, allowing the bankruptcy trustee to sell them to satisfy other debts would be counterproductive.
A tool of the trade is an object you use to make your living. It can be something as simple as a screwdriver or as complex as an automobile. Like most things in bankruptcy, there are various exceptions to these rules which make discussing your options with a Nevada bankruptcy attorney a good use of your time.
Not everything related to your work is exempt. There are four different categories of tools of the trade set out by Nevada Revised Statute Section 21.090 and the maximum exemptions vary for each.
UNIFORMS, ARMS, AND ACCOUTERMENTS
There is a blanket exemption for any uniform or accouterment you are required to have by law. This includes military and law enforcement uniforms and the accouterments that go with them. The exemption also covers one service firearm if it is required for the position, with the gun selected by you.
There is also a very broad exemption for miners and prospectors. The miner must be actively working a claim for the exemption to be available, but it covers cabins, dwellings, and vehicles used to work the claim. The exemption also covers any equipment used in the process of mining or prospecting. This exemption is good for up to $4,500 in total value.
There is also an exemption for farm trucks, tools, stock, equipment, supplies and seed. You may exempt up to $4,500 of the farm equipment of your choice.
LIBRARY, SUPPLIES, INVENTORY, AND MATERIALS
Finally, there is a catch-all exemption not to exceed $10,000 in value for any equipment, supplies, tools, or professional libraries used to carry on a trade or business.
DISCUSS NEVADA EXEMPTIONS WITH AN EXPERIENCED BANKRUPTCY ATTORNEY
Tools of the trade are only one useful exemption under Nevada law. To learn about other property you own that might be exempt from bankruptcy proceedings, contact Vohwinkel Law today.