Frequently Asked Questions
Is Bankruptcy Right For Me?
Bankruptcy can be a scary or overwhelming proposition. People may consider it as an admission of failure or giving up. In reality, that's far from the case. For many, overwhelming debt has been accrued over time and a result of medical bills or excessive credit card interest rates or unplanned unemployment. Having debt does not make you a bad person and considering bankruptcy does not mean you've failed at anything. Bankruptcy is the opportunity for a fresh start. It can reopen economic doors and improve your quality of life. At a consultation with Dresslove Law we'll take a look at your situation and create a plan based on your unique circumstances. We'll explain the process to you and and any non-bankruptcy alternatives that may apply. Feel free to read through these FAQs below. If you have a question that is not addressed here, give us a call or message us and we'll attempt to answer it or if it's more complex, to set you up with a free consultation. Your information will always remain confidential.
What's the difference between Chapter 7 and Chapter 13 bankruptcy?
Consumer bankruptcies mainly fall into 2 different chapters (literally chapters in a code book), chapters 7 and 13. Chapter 7 bankruptcy is a liquidation. Your debt will be examined and some of it will be dischargeable (liquidated) and some of it may remain. Your assets will be looked at and valued and we'll make a determination as to whether you would be able to retain them or would potentially loose them if you filed a chapter 7. To qualify a chapter 7, you would have to pass a means test which looks at you total income. Your income would have to be less then the amount set by congress. Chapter 13 is a reorganization. A plan will be created which will allow you to repay certain debts without penalty or harassment. If you don't qualify for a chapter 7 or we can't protect certain assets, you may want to look into a chapter 13 repayment plan as an alternative. At a free consultation, the attorney will discuss the advantages and detriments of both to you and help you decide which would be a better course of action
What debts can I get rid of?
In a chapter 7 liquidation bankruptcy, most secured and unsecured debt will be dischargeable (credit cards, home loans, car loans, personal loans etc..) If the loan is secured, you may have to return the security interest however the loan itself and any amount remaining will be discharged. Some tax debts may be dischargeable (based on how old they are). Student loans are usually not dischargeable without a showing of extreme hardship. In most cases people will not be able to meet the standard of extreme hardship, however this is currently a very fluid area of law and is changing daily. For now though, most student loans will survive the bankruptcy process and you'll still be responsible for their repayment after a bankruptcy. Repayment however may be easier for you if your other loans are forgiven. Loans that you've co-signed are generally dischargeable in bankruptcy, however the other party to the loan will still be responsible for repayment. Feel free to schedule a free no obligation, no judgment consultation with Dresslove Law and we'll go over your personal situation and see what might work for you.
I'm married, does my spouse need to file too?
A married couple is not required to file bankruptcy jointly. The couple may file joint petitions or one spouse may file separately. There are advantages and disadvantages to both. In a joint filing, many of the Nevada state property exemptions are doubled and the couple can therefor keep more assets away from creditors. Additionally, filing jointly will usually result in both spouses joint and separate debts being discharged. In the alternative, if one spouse has an excess of un-exemptible separate property, it may be advantageous for the other spouse to file separately. That being said, filing separately may not keep creditors from coming after the community property of the non-filing spouse. Nevada is a community property state and most acquisitions purchased and income earned during the marriage are considered property of both spouses. A creditor may come after that property even if it is in the other spouses name or mainly used by the non-filing spouse. Give us a call or schedule a free consultation to learn more. There's no obligation and we'll attempt to answer any question you have.
What will happen to my car?
For most people, outside of home ownership, their car is one of their biggest purchases and also their largest debt. A few things can happen when you file bankruptcy. If you own the car outright, the cars value will be taken into consideration. In Nevada, the first $15,000 in equity is protectable. In other wards if your car is worth $15,000 or less, you'll likely be able to retain in through a chapter 7 bankruptcy. If the car is valued at above $15,000 the bankruptcy trustee may elect to sell the car and use the proceeds above the $15,000 to repay your creditors. It may also be possible to protect some equity in excess of $15,000 with other Nevada exemptions.
If your car is financed, the equity is reduced by the amount owed on the car loan. So if the car is worth $38,000, but you owe the bank $29,000, the equity would be the difference, or in this case, $11,000. In this case, $11,000 is under the Nevada automobile exemption ($15,000) and you would be able to retain your car through the bankruptcy.
If the trustee elects not to sell the car, you'll have a couple options. The first will be to return the car to holder of the note. You will no longer be responsible for the any amount due or past due on the loan. The second option is to reaffirm the loan so that you may keep the car after the bankruptcy. This process is usually not the best option as you will remain responsible for all past due amounts and missed payments. That being said it is always possible to work with the lender to see if they will be willing to forgive past due amounts or lower the interest rate to make reaffirmation more beneficial. Feel free to give our office a call to set up a no obligation consultation where we'll go over this process in detail and answer your questions.
Will bankruptcy stop my car from being repossessed?
The general answer is yes, for a while. In a chapter 7 bankruptcy proceeding, the court will stay all enforcement of any past due loans, including actions for repossession. This stay will give you time to decide what course of action you'd like to pursue with regard to your car. You can discharge the debt owed on your car in bankruptcy but you will ultimately end up having to return the car. The bankruptcy proceeding will give you some breathing room and time to think. In a chapter 13 repayment plan bankruptcy, you'll work out a plan to repay the arrears owed on the car. During the course of the repayment plan, you will keep the car and continue to make the new car payments as well. If you fail to make the on time plan payments, the car may once again be re-possessed by the lender. After you file bankruptcy, it may also be possible to modify the car loan terms and amounts to reduce your debt load or reduce the interest rate. Whatever your goals are, it's worth it to schedule a free consultation. You'll be advised on the pros and cons of each course of action and leave much better informed of you options.
I own my home, will I be able to keep it?
In a chapter 7 liquidation bankruptcy, the state of Nevada allows consumer filers a homestead exemption of $605,000. This means that with a little work, the first $605,000 in home equity will be retained by you. If there is equity in excess of the $605,000, the court may choose to sell the home and use the funds in excess of $605,000 to pay off your creditors. If the equity is less then $605,000, the court will most likely not go after your home and you will retain it through the Chapter 7. If you have a home loan, the creditor will still be able to foreclose on the property after the bankruptcy if you have stopped making payments or have not made up missed payments. In a chapter 13 repayment plan bankruptcy, you'll be able to retain your home while you make up for previous missed payments in a bankruptcy plan over a period of 3 to 5 years. It's important to consider that you'll need sufficient income to make the plan payments as well as the current mortgage payments.
What is lien striping and can it help me?
Lien stripping is a process where certain debts and secured loans may be stripped of their secured status and become dischargeable in bankruptcy. Many judgment liens and loans secured to personal property can have their secured status stripped away. After this happens the loans or liens may be discharged by a chapter 7 or 13 bankruptcy. Lien striping relating to a home in bankruptcy is a process where by a second or third mortgage on your home may be eliminated. Lien stripping a mortgage loan is limited to chapter 13 bankruptcies where the appraised value of your home is less then the amount of the first mortgage. In that scenario, any subsequent mortgage may possibly be eliminated (stripped.) The second or third mortgages would be stripped of their secured status, become unsecured loans and be subject to discharge at the end of the chapter 13 payment plan. If you have a home that is worth less then what you owe on it, feel free to give us a call or set up a free consultation to see if lien stripping is a viable option for you.
I'm in foreclosure, can I stay in my home?
When you file a chapter 7 or chapter 13 bankruptcy, any foreclosure proceedings that have already commenced are immediately stayed, or stopped. If you have not already been evicted or removed from the home, then any action to remove you will stop until the conclusion of the bankruptcy or the creditor is granted relief from the stay. This will give you some breathing room to decide what your next steps will be. If you file a chapter 7 liquidation bankruptcy and can not or do not want to bring your mortgage current, the foreclosure will re-commence once the bankruptcy is complete and you will still need to move out, but you no longer owe the bank for the loan. If you want to stay in the home after the bankruptcy, you'll want to file a chapter 13 repayment bankruptcy which will give you up to 5 years to repay the deficiencies on your mortgage. There are other benefits to both options. To learn more, give us a call or make an appointment for a free, no hassle no obligation consultation with our attorney.
What is foreclosure mediation?
In Nevada, property owners in default may ask to meet with a representative of their lender and a third party neutral. This meeting is designed to help both parties work out a solution that would be acceptable to the lender and the borrower. Ideally the borrower would remain in their home and the lender would modify the loan to that effect. Both parties would stay out of the court system and save money in the process. In Nevada there is no requirement that the lender modify the loan. The lender and borrower need only have good faith in the discussions. If you choose to mediate, the attorney will be there with you as your representative. They'll look out for your best interests, make sure that you are informed of the consequences of any modifications made, and they'll insure that those modifications are in you best interest. Feel free to give us a call or set up a free initial consultation for more information.
Can I get rid of my student loan debt?
The general answer is probably not. Discharge of student loans in bankruptcy is usually not allowed. That being said, it is remotely possible if the debtor can make a showing of undue financial hardship. The burden is on the debtor to show that they cannot maintain a minimum standard of living if they are forced to repay the loan, that their inability to repay is not temporary and will continue for the duration of the loan, and finally that they have made a good faith effort thus far to make payments. This is a very very difficult standard to prove to the court and is rarely met. That being said, there are other repayment avenues that our office can discuss with you. Student loan law is a very fluid area of bankruptcy at the time of writing this and court decisions pertaining to what qualifies as an "undue hardship" are constantly evolving. In the near future it's not out of the realm of possibility that the law here in Nevada will shift away from the "undue hardship" standard to a more approachable rule. Feel free to give our office a call to discuss your unique situation.
Can I get rid of my tax debt?
Getting rid of tax debt is very possible. The current bankruptcy code allows for the discharge of past tax liability if 1) the debt has been due for at least 3 years (so in 2020, 2017 tax debts may be dischargeable.) 2) your taxes for the year in question must have been filed at least 2 years before the date of the bankruptcy filing, 3) The tax in question was assessed more than 240 days before the bankruptcy filing, and 4) the court makes a determination that there was no fraud in the filings. Even if your tax liability is not dischargeable, there are other options available to you that we can discuss, such as a chapter 13 repayment plan that will let you pay off the tax debt free from harassment, collections, or wage garnishment. If you think you may meet these qualifications for discharge or have more questions, feel free to give us a call and set up a free no obligation, no commitment consultation to learn about these and other options.
Will bankruptcy stop the collections calls?
Yes. When you file for bankruptcy protection, the court will immediately issue a stay. This means that all your debts and financial obligations will be put on hold for the duration of the bankruptcy. Because your financial liabilities are on hold while the court appointed trustee decides how to proceed further, all collections attempts by creditors or collections companies must immediately stop. In fact if a creditor violates the stay and contacts you directly, they can be subject to significant court fines and penalties. Collections companies know this and will only rarely contact you after they receive notice of the bankruptcy. After you file, any contact must be made through your lawyers office or the office of the trustee. If you're being harassed by collections agents, please give our office a call and set up a free consultation. We'll walk you through your options and answer any questions you may have.
Who will know that I've filed bankruptcy?
When you file a bankruptcy, that filing becomes a public record. That means anyone can go to the bankruptcy courts website and search for your name. HOWEVER, there is no public posting that you've filed for bankruptcy protection, so only the creditors, those that you owe a financial duty to, or those who owe you money will receive notice that you've filed. If you don't owe a financial duty to someone, they will not receive notice that you've filed for bankruptcy and will usually not have a reason to look you up. Additionally, when you come in for a consultation, any information you disclose and / or options that we discuss remain confidential. No one will know you've come in for a consultation unless you want them to know. So if you owe money to your boss or a family member, they will be notified of your bankruptcy filing. If a family member / friend is a co-signer on a loan, they will receive notice of the bankruptcy. Lastly, if someone owes you money, they may be notified of the bankruptcy.
Can I rebuild my credit after bankruptcy?
Rebuilding your credit after a bankruptcy can seem daunting, however it's something that people do every day. At the conclusion of your case we'll discuss options available to you to start rebuilding your credit score. Rebuilding your credit after a bankruptcy is actually not that difficult and many people have excellent credit scores in less then 2 years. Many banks have secured credit cards which will be available to you immediately after the conclusion of your case and will start the rebuilding process. If you file a chapter 13 and continue to make payments on existing obligations for the duration of the bankruptcy, those payments will also contribute to an improvement in your score.
What are the alternatives to bankruptcy?
Bankruptcy is not a blanket fix all for everyone. In fact it might be the case that you don't need to file for bankruptcy protection, or if you do file, you might have assets that you would loose to the trustee. If those situations apply to you, you have other options. We can negotiate with your creditors to reduce your debt load or to revise the loans to reflect more amicable terms. If you are facing foreclosure on a property that would not be protected, we can work with the bank to give you time to sell that property or find another lender. What ever your situation is, feel free to contact us for a free no-hassle, no-obligation consultation. We'll go over all your options and possible solutions to your individual situation.
How long will a bankruptcy take?
Most Chapter 7 liquidation bankruptcies will take less than 6 months from filing to discharge. Chapter 7's can take longer if the filing is challenged by a creditor or you have many non-exempt assets that will have to be settled. When you come in for your initial consultation, we'll go over your individual situation and let you know the realistic time line. If you're filing a chapter 13 re-payment bankruptcy, We will work to set you up on a court approved repayment plan that can last as long as 5 years. This is designed to give you time to repay your past due amounts while continuing to make your current payments.
What will my lawyer do for me?
Your bankruptcy attorney will guide you through the bankruptcy process and advise you of your best options along the way. The attorney will start by gathering all information necessary to inform you of all your debt related options and answer any questions you may have. They'll advise you of any consequences filing may have in relation to your assets and credit . If you choose to file for bankruptcy protection, the attorney will prepare your filing documents and submit you petition to the bankruptcy court. If you're filing chapter 7 liquidation, the attorney will perform a means test analysis and inform you of any assets that may be at risk. If you don't qualify for a 7 or wish to catch up on past due mortgage payments and keep your home, the attorney will draft a chapter 13 repayment plan that works for you. Your attorney will prepare you for any court hearings and will represent you at matters related to the bankruptcy. The attorney will keep you updated on the deadlines and the progress of the filing along the way. no matter what course of action you choose, the attorney will be there to listen to you and provide you with competent professional legal advice.
Do you offer payment plans? Do you take Credit Cards?
We can work with you to set up a payment plan for our services, however according to bankruptcy court rules in the state of Nevada, the agreed upon fee for our services must be paid in full prior to the filing of the case. Work can commence on your case the moment you hire our firm, however payment will need to be made in full prior to the filing of the case.
Payment must be made by cash, check or debit card. Unfortunately we can not take credit card payments as those payments could be construed as fraudulent by the court as they were made with the knowledge that you would be filing and never in fact planned to repay the debt.
I owe back rent, will bankruptcy help?
YES! Back rent, like any other debt, is subject to discharge in a bankruptcy. If you personally acquired the debt, or co-signed on a lease for another person, a bankruptcy will in most cases get rid of that obligation. It is important to note that if you are a co-signer on a loan or someone else co-signed for you, that they will still be responsible for the back due rent even though you no longer are.
Currently, during the Covid 19 pandemic, many people have stopped paying rent due to financial hardship from loosing a job or a reduction in pay. While there is currently an eviction moratorium in place, this will not keep past due rent from accruing. If you have stopped paying rent and remain in a rental property, contact our office for a free consultation. Most likely you will remain responsible for re-payment of any back due rent and can be subject to lawsuit and wage garnishment as well as other costs and fees.
What can you do to correct errors on my credit report?
In addition to bankruptcy, credit rebuilding, our office can work with the various credit reporting agencies to repair your credit. If a debt exists on your credit report that is not yours, or the amounts are not reflective of what you really owe, we can work to have your report corrected and your score adjusted to reflect your actual credit history. We have experience correcting accounts after identity theft and can also work to have negative remarks removed and incorrect addresses or names removed
If you've been trying to correct your credit report but seem to be getting nowhere with the different agencies, give our office a call today to schedule a free consultation to hear about what options are available to you.