If you are considering filing for either Chapter 7 or Chapter 13 bankruptcy in Nevada, there are some exemptions specific to the state that you should be aware of. Although bankruptcy is largely governed by federal law, some exemptions and information are available on a state-by-state basis.
You retain your property and assets when filing for Chapter 13 bankruptcy. However, when filing for Chapter 7 bankruptcy, your non-exempt property and assets are liquidated, and the proceeds go to your creditors. Nevada bankruptcy exemptions prevent creditors from liquidating property and assets under Nevada Revised Statutes § 21.0901’s list of exclusions. State laws outline exclusions that enable individuals who file bankruptcy to retain essential assets, such as their home, vehicle, or work tools while going through bankruptcy.
While many exemptions are available across states, the maximum amount of the exemption is often determined by the specific state jurisdiction. These figures are updated by the state periodically. There are three important exemptions you should learn about before filing for bankruptcy in Nevada.
1. The Nevada homestead exemption
For those filing for bankruptcy in the state of Nevada, the homestead exemption allows you to protect up to $550,000 of equity in your home. Different states provide different degrees of protection. While some states measure the exemption by acreage limitations, Nevada protects property up to a specified value.
2. The Nevada motor vehicle exemption
This exemption allows you to protect a maximum of $15,000 of equity in your car, truck, van, or other vehicle. The Nevada motor vehicle exemption may enable you to claim even more if you are married and filing jointly, or if your car is equipped for a disability.
3. Nevada exemptions for married couples
Married couples who file for a joint bankruptcy in Nevada can “double” their exemption amounts. This means you and your spouse can each claim the full exemption amount for any property belonging to both of you, such as your home. Keep in mind that this exemption can only be claimed to protect property that both of you own.
Nevada updates its exemption figures periodically, so make sure you get the correct figures when you are estimating your exemptions. Verify the current exemption values by looking up the Nevada Revised Statutes on the Nevada Legislature website. For more information about Nevada bankruptcy, consider talking to Las Vegas bankruptcy lawyer Anthony Deluca.
4. Wage Ehttps://www.deluca-associates.com/xemption
You can claim a wage exemption when you file for bankruptcy in Nevada. The wage exemption allows you to keep up to 75% of your income. You can opt to protect an income value of 50 times the federal minimum wage if that’s greater than ¾ of your current income.
5. Nevada Wildcard Exemption
The wildcard exemption is an option if you have something you want to keep that isn’t covered by another exemption. You can use this exemption to protect possessions with a value of up to $10,000.
6. Personal Property Exemptions
Personal property applies to more than your home and vehicle. Your personal property includes multiple items, such as electronics, clothing, jewelry, and medical devices.
Some personal possessions are automatically exempt from liquidation during bankruptcy. Exemptions in Nevada include up to $12,000 of household goods, such as tools, furniture, yard equipment, and appliances. Other personal property exemptions include burial plots, prepaid funerals, health aides, and collections of jewelry, books, art, or other items valued at $5,000 or less. People going through bankruptcy can also use their personal property exemptions to retain one gun.
7. Tools of the Trade Exemptions
Many professionals need special resources for their occupations. The tools of the trade exemptions protect uniforms, and other items individuals must wear for work, such as arms or accouterments, from liquidation. You can also retain up to $4,500 worth of tools or equipment needed for your occupation.
This exemption also lets you keep up to $10,000 worth of professional resources, including stock for your business, your reference library, or work-related equipment.
8. Insurance Benefits Exemption
Federal bankruptcy laws automatically protect life insurance policies for members of the military. State exemptions may also apply. People often rely on insurance payments to cover necessary expenses, such as medical bills, funeral costs, and property replacement costs. It’s crucial that you talk to a bankruptcy attorney if you’re eligible to receive funds from a life, home, health, disability, or auto insurance policy to ensure you understand state and federal laws and whether you can protect your insurance benefits.
9. Pension and Retirement Exemptions
Nevada bankruptcy exemptions protect your retirement benefits. Creditors cannot claim protected accounts, including the following:
- 401 (K)s
- 403 (B)s
- ERISA-eligible pensions
- ROTH IRAs
- SEP IRAs
- SIMPLE IRAs
- Stock bonus plans
Limits apply to some protected accounts. Consequently, you may only be able to protect some of your retirement income if you have a large account with a value cap.
10. Public Benefit Exemptions
Federal and state governments provide benefits to citizens. These benefits usually focus on low-income persons or those with identified needs. For example, an individual who’s paralyzed may qualify for disability benefits.
Nevada’s bankruptcy exemptions allow you to keep most public benefits, including the following:
- Benefits for children
- Benefits of vocational rehabilitation
- Disability benefits
- Social security payments
- Stimulus payments
- Unemployment benefits
- Worker’s compensation
11. Other Exemptions
In addition to the benefits outlined already, several other assets are exempt from liquidation during bankruptcy filings in Nevada. Some examples of other exemptions include:
- Personal injury awards. Personal injury awards include economic and non-economic damages after an accident. Nevada limits the amount you can keep from personal injury awards, but it does allow you to keep over $16,000 during the bankruptcy process.
- Restitution for a crime. Sometimes, victims of crimes receive financial compensation. Creditors can’t claim these funds during bankruptcy.
- Tax credits. Individuals filing for bankruptcy retain their personal tax credits. They also retain the right to claim tax credits for their children.
- Wrongful death awards. When a person dies a wrongful death, their immediate family members may file a lawsuit seeking economic, non-economic, and punitive damages. Wrongful death awards are financial settlements issued when the case is resolved. Wrongful death awards are protected during bankruptcy cases, enabling those filing to retain the settlement funds.
Many other exemptions may apply. Since there’s an overlap between federal and state laws, it’s crucial that you talk to a bankruptcy attorney about exemptions and how the exemptions impact your case. Hiring a bankruptcy attorney limits your risks because you have an experienced legal professional who can ensure you protect all exempted assets from liquidation.
Contact a bankruptcy attorney today. You’ll receive expert insight into the assets you can retain and learn how to protect your income while discharging bankruptcy.
Nevada Law Library. (2023).