Can You Keep Your House If You File Chapter 13 in Nevada?
Losing your home is a major concern for people when filing for bankruptcy. If you are behind on your mortgage and facing foreclosure in Nevada, Chapter 13 bankruptcy is specifically designed to address that situation. In most cases, filing Chapter 13 lets you keep your house while catching up on missed payments over time.
Understanding how the process works can help you determine whether it is the right step for your circumstances.
How Chapter 13 Protects Your Home
Can you keep your house if you file Chapter 13 in Nevada? When you file, an automatic stay goes into effect immediately. This stops foreclosure proceedings and collection calls, and stops creditors from taking further action against you while your case is active. If a foreclosure sale has been scheduled, the automatic stay can stop it.
Chapter 13 also lets you propose a three to five-year repayment plan. Within that, you can include your mortgage arrears (the payments you have missed) and repay them gradually over the life of the plan. As long as you keep making your regular monthly mortgage payments going forward and stay current on your plan payments, your lender cannot foreclose.
What You Have to Do to Keep the House
Keeping your home through Chapter 13 means meeting two ongoing obligations at the same time.
First, make your regular mortgage payment each month as it comes due. Chapter 13 does not eliminate your mortgage or suspend future payments.
Second, make your monthly plan payments to the Chapter 13 trustee on time. Your plan payment covers the arrears, attorney fees, and other qualifying debts included in the plan. Missing plan payments could get your case dismissed.
Nevada’s Homestead Exemption
Nevada offers one of the most generous homestead exemptions in the country. Homeowners can exempt up to $650,000 in equity in their primary residence, which means that if your home has equity within that range, creditors cannot reach it to satisfy unsecured debts. If your home equity exceeds the exemption amount, your repayment plan may need to account for that excess to satisfy the best interest of creditors test.
What Happens If You Are Significantly Behind?
There is no minimum or maximum amount of arrears required to use Chapter 13 to save a home. Whether you are two months behind or 12, the process is the same: the arrears are included in the plan and repaid over the plan period. The total amount of the arrears is divided across the plan payments.
Second Mortgages and Liens
Chapter 13 also offers a tool that Chapter 7 does not: lien stripping. If your home’s current market value is less than what you owe on your first mortgage, a second mortgage, or junior lien may be treated as unsecured debt in Chapter 13. If the plan is completed successfully, that stripped lien can be discharged entirely.
Contact DeLuca and Associates
At risk of losing your home in Nevada? A Chapter 13 bankruptcy may give you the time and structure you need to get current and move forward. The attorneys at DeLuca and Associates have helped thousands of Nevada homeowners protect their properties through Chapter 13. Contact us today for a free consultation.
