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Below are the most-often asked questions about a Chapter 13 bankruptcy.

• Nevada Chapter 13 (same as Las Vegas Chapter 13) Bankruptcy Explained
• Advantages of a Nevada Chapter 13 Bankruptcy
• Chapter 13 Eligibility
• Chapter 13 Procedure and Timeline
• The Chapter 13 Discharge
• Alternatives to Chapter 13

Chapter 13 Bankruptcy explained

A Las Vegas Chapter 13 bankruptcy is one filed under Nevada law for residents of Las Vegas and of other nearby towns in Clark County, such as Henderson, Pahrump, Jean, Boulder City, and other nearby towns where it is not possible to file a Chapter 13 bankruptcy and Las Vegas has the closest bankruptcy court to that town. Basically, there is no real “las vegas bankruptcy.” It’s really a Nevada bankruptcy, but with the advent of the Internet many people search for information on Chapter 13 bankruptcy by looking for information on Chapter 13 preceded by the name of the town where they live, hence the often-used term “Las Vegas bankruptcy.”

A Chapter 13 Bankruptcy is also known as a “wage earner’s plan.”

Basically, filing a Chapter 13 allows you to keep earning your paycheck without giving it all up to creditors, and it allows you to keep ALL of your property, subject to a reorganization of how you make payments to your creditors for said property. Some debts are completely dischargeable under Chapter 13 bankruptcy law, but whether or not a debt is fully discharged while another must be paid back depends on each individual case and is decided by the Court.

The major difference between filing a Chapter 13 and a Chapter 7 bankruptcy is that in filing a Chapter 13, the majority of your debt does get paid back to creditors, but under terms that allow you to keep having a normal life (albeit one where you have less money for entertainment and vacations), rather that under terms that place too huge a burden on you, as they probably are now if you are considering filing a Chapter 13.

When you file a Nevada Chapter 13 Bankruptcy, you propose a repayment plan to the Bankruptcy Court. Your repayment plan includes how much you can pay each month to each creditor. All of your debt must be paid within 3 years unless the Nevada Bankruptcy Court approves a longer period. If you need longer to repay, you must show “cause,” by stating in your Bankruptcy Petition why you need longer than 3 years to repay your debts.

If the debtor’s current monthly income is greater than the applicable state median, the repayment plan generally must be for five years. This is because the court presumes that more of the debt owed can be paid back with the higher income, whereas someone with income below the state median will have less money, therefore can pay back less of the debt back to creditors.

In no case may a plan provide for payments over a period longer than five years as per Nevada bankruptcy law 11 U.S.C. §1322(d). During this time, Nevada bankruptcy law forbids creditors from starting or continuing collection efforts. A Las Vegas bankruptcy attorney can file lawsuits against creditors who do so.

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Advantages of filing a Chapter 13 Bankruptcy

• By far the biggest advantage to filing a Chapter 13 over a Chapter 7 is that it allows you to save your home from foreclosure. If you are behind in your payments, you could lose your home to foreclosure in a Chapter 7. Filing a Chapter 13 instead allows you to catch up on back payments (you must still make your regular mortgage payments as well) and to keep your home. But all payments must be made on time.
• It also allows you to reorganize how you make payments on your other secured debt, such as vehicles, boats, items purchased to improve your home, etc. All payments would be extended over the period of the Chapter 13 bankruptcy. This may, in some instances, lower your payments.
• A Chapter 13 may also protect anyone who may have co-signed on a loan for you. Ask your Las Vegas bankruptcy attorney for details on this issue.
• You’ll also have the relief of making only one payment each month, rather than dealing with numerous creditors. You make this one payment to the Bankruptcy Court Trustee who in turn pays all your creditors. Think of it as a consolidation loan.
• You have no direct contact with your creditors during the process of a Chapter 13 Bankruptcy. Creditors must contact either your bankruptcy attorney or your bankruptcy trustee.

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Las Vegas Nevada Chapter 13 Bankruptcy Eligibility

You are eligible to file a Las Vegas Chapter 13 bankruptcy even if you are self-employed or operate your own unincorporated business, provided you meet the following criteria:

• You are a current Las Vegas resident (or reside elsewhere in Clark County and you can attend the creditors’m meeting here in Las Vegas), or Las Vegas is where you spent the majority of your time during the past 180 days.
• Total unsecured debts must be under $336,900
• Total secured debts must be less than $1,010,650 11 U.S.C. § 109(e)
• You have received credit counseling* from an approved credit counseling agency, either as an individual or in a group setting, within 180 days before filing. 11 U.S.C. §§ 109, 111.
• You have taken a financial management class during your required credit counseling, you must file it with the court.
• A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a).

NOTE: You cannot file for a Chapter 13 Bankruptcy if a bankruptcy petition filed by you within the past 180 days was dismissed by the Bankruptcy Court because of failure to appear before the Court, or due to non-compliance with a Bankruptcy Court Order, or the bankruptcy was dismissed by you because creditors asked the court that property on which they hold liens be returned to them.

11 U.S.C. §§ 109(g), 362(d) and (e).

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Alternatives to a Chapter 13 Bankruptcy Filing

• Filing a Chapter 7 Bankruptcy
• Working out your own repayment plan directly with your creditors which can sometimes be done with the help of a Chapter 13 bankruptcy attorney

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Nevada State Median Yearly Income

One individual in a family:45,642
Two individuals: $57,860
Three: $65,032
Four: $67,997

Add $6,900 more per year for each individual in excess of 4

NOTE: Income means the average monthly income received over the six months just preceding the filing of your Petition, and it includes household expenses contributions by non-debtors, such as your spouse even if your spouse is not filing with you. It does NOT include social security income or certain payments made to you because you were the victim of certain crimes. 11 U.S.C. § 101(10A).

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