Reno Bankruptcy Attorney
Bankruptcy can help people who can no longer pay their creditors get a fresh start and, as an affordable Reno bankruptcy attorney, we can help you file your bankruptcy. If you are considering bankruptcy, call us first to determine the correct course of action. Here are some tips on how bankruptcy law affects you.
We are the attorneys in Reno that will stay with you through the entire bankruptcy process, giving you the skills and confidence to successfully move on when you receive your discharge. We understand the Bankruptcy courts for the District of Nevada and can help make the process as easy as possible.
Filing for Bankruptcy
Chapter 7 bankruptcy is a proceeding in which the debtor’s non-exempt assets, if any, are sold by the Chapter 7 Trustee. The proceeds of the liquidation are distributed to creditors according to the priorities established in the Bankruptcy Code.
In most consumer cases, all assets are exempt; therefore, there are “no assets” to liquidate to pay creditors. In order to qualify to file a Chapter 7 you must pass a means test which is calculated by comparing the debtor’s average income for the previous six (6) months annualized, to the median income for households of the same size in the debtor’s state of residence.
Chapter 7 will stop creditors from harassing you upon the filing of a petition. The petition creates a legal hurdle to collection actions by creditors. If your Chapter 7 case sails through without any complications, you will most likely receive a discharge of your debts in approximately 90 days from the filing date.
Some debts such as student loans, alimony, child support, and some taxes are not dischargeable.
Chapter 11 bankruptcy generally provides for reorganization, usually involving a business. A plan of reorganization is proposed to keep the business going and to pay creditors over time. Individuals can also seek relief under Chapter 11 which is somewhat similar to Chapter 13.
Consumers who do not qualify to file a Chapter 13 (their secured and unsecured debts are over the limits imposed by 11 U.S.C & 109(3)) sometimes seek protection under Chapter 11. Chapter 11 bankruptcy cases can be quite complex and expensive.
Chapter 13 bankruptcy is designed for individuals with regular income. A plan is devised to repay all or part of their debts over a period of three to five years. The proposed payment plan is dictated by the means test and must provide unsecured creditors an amount equal to the debtor’s monthly disposable income multiplied by 36 (for those with incomes below their state median) or by 60 (for those incomes above their state median).
Plan payments can be the same over the life of the plan or increase at various intervals. Priority creditors must be paid in full, i.e. taxes and support payments while payments to other creditors may be little or even nothing. After completion of the plan, the debts are discharged unless the debt is non-dischargeable, i.e. criminal restitution, domestic support, or student loans that were not paid in full through the plan.