Is Bankruptcy Right for Me?
Are you drowning in debt? Are creditors trying to collect? Are you afraid of losing your house, car, or other property because you can’t keep up with the payments? Financial difficulties create stresses in all aspects of life. Maybe you have thought about bankruptcy, but don’t know where to start, or if it is even an option. Are you or a loved one contemplating or preparing to file for bankruptcy? It is important you understand how bankruptcy law applies to you. Contact the trusted Nevada attorneys at Anthem Injury Lawyers for a free consultation, online or at (702) 857-6000.
What is Bankruptcy Law?
Bankruptcies fall under federal law. The following govern all bankruptcies:
- the United States Bankruptcy Code,
- the Federal Rules of Bankruptcy Procedure, and
- the local rules of the court in which the case is filed.
Federal bankruptcy laws were enacted to give honest debtors who were unable to pay their debts a “fresh start.” In its 1934 decision, the United States Supreme Court stated that bankruptcy:
- “gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” (Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)).
In a bankruptcy proceeding, the debtor:
- can be an individual or company,
- owes outstanding debt to the creditors, and
- initiates the bankruptcy proceeding.
The creditor is the individual or company to which the debtor owes money.
What Happens in a Bankruptcy Proceeding?
During a bankruptcy proceeding a debtor declares that they are unable to pay their debts. Then, at some point, the bankruptcy court issues an order discharging certain debts. A discharge releases a debtor from personal liability for certain dischargeable debts. This means the debtor no longer has a legal responsibility to pay the discharged debts, providing the debtor with a fresh start.
Not all debts are dischargeable. A discharge prevents creditors from taking action against the debtor to collect the debts. Creditors are not allowed to communicate with the debtor regarding the debt.
Prohibited communication includes:
- telephone calls,
- letters, and
- personal contact.
Now that you have the facts about bankruptcy, you may be wondering if you need a bankruptcy lawyer. We’ll address that question in detail in a moment. Our Las Vegas bankruptcy law firm wants you to know that we offer the expertise and experience you need to navigate bankruptcy. The complexities of bankruptcy require a legal team that knows how to guide you to the result you want. Give our office a call and schedule a free consultation: (702) 857-6000.
Do I need a Bankruptcy Lawyer?
Bankruptcy is a complex legal process that has long-term financial and legal consequences under the law. It is possible for an individual to file for bankruptcy without an attorney. However, a qualified bankruptcy attorney, such as those at Anthem Injury Lawyers, can answer your legal questions and provide advice specific to your situation. Remember to seek the advice of an attorney licensed to practice in your bankruptcy court. Anthem Injury Lawyers are Nevada licensed attorneys with experience in bankruptcy court.
The Administrative Office of the U.S. Courts compiled the following list of ways your lawyer can help you with your bankruptcy case.
- Advise you on whether to file a bankruptcy petition.
- Advise you under which chapter to file.
- Advise you on whether your debts are dischargeable.
- Advise you on whether or not you will be able to keep your home, car, or other property after you file.
- Advise you of the tax consequences of filing.
- Advise you on whether you should continue to pay creditors.
- Explain bankruptcy law and procedures to you.
- Help you complete and file forms.
- Assist you with most aspects of your bankruptcy case.
If you have questions about bankruptcy law, contact the experienced team at Anthem Injury Lawyers. We are experienced bankruptcy attorneys and can answer questions specific to your individual situation. Bankruptcy has long-term financial and legal consequences and you should understand how the law applies to you. Reach us online or at (702) 857-6000 for a free consultation.
Should I File for Bankruptcy?
Only you can decide whether bankruptcy is the right choice for your situation. The American Bankruptcy Institute compiled the following Considering Bankruptcy Checklist as one tool to help you analyze your situation:
- Your wages have been garnished or your bank account has been attached.
- Most of your debts are unsecured debts like credit card bills, hospital, or doctor’s bills.
- Your total debt, not including your car or house loan, is more than you could pay, even over five or more years.
- Collection agencies are calling you at home and/or at work.
- Your payments are more than 30 days behind on more than one bill.
- There are lawsuits pending against you.
- You have high medical bills not covered by insurance.
- You owe income taxes that you are unable to pay.
- You have few assets.
- You have little or no savings.
- You have had property repossessed (such as a vehicle).
- Your mortgage lender has threatened or started foreclosure proceedings against your home.
What Happens When I File Bankruptcy?
Filing bankruptcy triggers an “automatic stay,” stopping creditors from collecting debts (without the court’s permission).
Filing bankruptcy will:
- Stop bill collectors from calling.
- Stop creditors from garnishing wages.
- Stop most pending civil court proceedings.
- Temporarily stop foreclosures and possibly delay evictions.
- Stop wages from being garnished.
What Debts Does Bankruptcy Eliminate?
Bankruptcy erases many debts, such as:
- Credit card balances
- Medical bills
- Payday loans
- Personal loans
- Mortgages (But you must keep paying if you want to keep the house.)
- Car loans (But you must keep paying if you want to keep the car.)
- Most court judgments
What Debts Does Bankruptcy Not Eliminate?
There are several federally protected debts that bankruptcy usually does not eliminate, including:
- Child support
- Spousal support
- Most IRS taxes
- Student loans
- Court-ordered restitution
- Court judgments for injury or death as a result of a DUI
- Fraudulently incurred debts
What are Bankruptcy Chapters?
The different chapters of the Bankruptcy Code govern bankruptcy filings. Under the Bankruptcy Code there are six types of bankruptcy cases, named for the chapters that describe them. Your individual situation will determine the type of bankruptcy case you file.
The six types of bankruptcy cases are:
- Chapter 7
- Chapter 9
- Chapter 11
- Chapter 12
- Chapter 13
- Chapter 15
The most commonly filed chapters are Chapter 7, 11 and 13.
Chapter 7 – Liquidation
- Only certain low-income debtors qualify based on a means test.
- A bankruptcy trustee may collect and sell your nonexempt money and assets, and use the proceeds to pay your creditors.
- Any remaining balances owed to creditors are discharged (cancelled).
- Allows the debtor to keep certain “exempt” property.
- Nevada lists exempt property under Nevada Revised Statute 21.090 Property exempt from execution.
Chapter 9 – Adjustment of Debts of a Municipality
- Only applies to municipalities, such as cities, towns and school districts.
Chapter 11 – Reorganization
- Used by commercial enterprises.
- The debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.
Chapter 12 – Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income
- Similar to Chapter 13.
- Allows a family farmer or fisherman to continue to operate the business.
Chapter 13 – Adjustment of Debts of an Individual With Regular Income
- Used by individual debtor who has a regular source of income and does not qualify for Chapter 7 relief under the means test.
- Debtor proposes a “plan” to repay creditors over time – usually three to five years.
- Debtor usually remains in possession of the estate’s property.
- Debtor, through trustee, makes payments to creditors based on the debtor’s anticipated income over the life of the plan.
- Debtor does not receive an immediate discharge of debts.
- Debtor must complete the payments required under the plan before receiving the discharge.
- Debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect.
Chapter 15 – Ancillary and Other Cross-Border Cases
- Applies where a debtor or its property is subject to the laws of the United States and one or more foreign countries.
Hire a Las Vegas Lawyer Before You File for Bankruptcy
If you’re considering declaring bankruptcy, you’ll benefit by having a bankruptcy lawyer represent you. Award-winning Las Vegas Anthem Injury Lawyers is a team of experienced, dedicated bankruptcy lawyers and case managers based in Henderson, Nevada. We serve clients in Henderson, Las Vegas, North Las Vegas, Summerlin, Reno, and Clark County. With over 25 years of experience, Anthem Injury Lawyers specializes in bankruptcy law and personal injury claims. Contact us today at (702) 857-6000 to make an appointment for a free consultation.