Although people file for Chapter 7 bankruptcy everyday, many still have misconceptions and questions about what will happen to them if they file. With so much uncertainty in unclear financial situations, one of the most common questions people ask is:
Will I lose all of my property if I file for Chapter 7 bankruptcy?
Generally, no. You will not lose all of your property if you file for Chapter 7 bankruptcy. People who file for bankruptcy are entitled to keep certain property. This is known as exempt property, and can not be taken away from you if you file for bankruptcy.
With more than 33 types of exempt property available, Nevada has a reputation for being a very debtor-friendly exemption state. In almost all of the state’s Chapter 7 bankruptcy cases, the debtor is able to keep all of his or her property.
What are the most common Nevada property exemptions?
- Homestead – $550,000
- Retirement Accounts – 100% up to $500,000
- Vehicle – $15,000
- Home Furnishings – $12,000
- Clothing/Jewelry – $12,000
- Tools used in current employment – $12,000 per debtor
- Miscellaneous (typically used for cash and bank accounts) – $1,000
- Net unpaid wages owing at time of filing – 75%
The bankruptcy court only values the equity of an item to determine whether or not it is eligible for exemption. For example, if you own a car worth $10,000 wholesale, and there is a $9,000 loan against it, the car only has $1,000 of equity. If the value of your equity in the property is lower than the amount of the exemption, you will be entitled to keep the property.
Although filing for Chapter 7 bankruptcy can be a difficult and stressful time, losing all of your property is one thing you don’t need to worry about.
For answers to other common bankruptcy questions or to speak with a Chapter 7 bankruptcy attorney, contact DeLuca & Associates to schedule a consultation.
Main photo by Robert Pearce