Are you worried about losing your property if you file for Chapter 7 or Chapter 13 bankruptcy? Relax. There are a number of Nevada bankruptcy exemptions in place that can help protect some or all of your property. When you file Chapter 7 bankruptcy, the exemptions allow you to keep the protected items. In addition, when you file Chapter 13 bankruptcy, the exemptions help determine how much you will have to repay creditors through your repayment plan.
Although federal law also has bankruptcy exemptions in place, Nevada has opted out of these and requires people filing for bankruptcy in-state to use these state exemptions instead. Although you may not use the federal exemptions in the state, you are entitled to federal non-bankruptcy exemptions, which protect things like veteran’s benefits and federal retirement accounts. Additionally, if you are a married couple filing for joint bankruptcy, you and your spouse may double the state’s exemptions and each claim the whole exemption figure for property that belongs to both of you.
Here are some of Nevada’s most common bankruptcy exemptions:
The exemption for your homestead is a maximum $550,000 in equity in a mobile home or home. If you wish to claim this bankruptcy exemption, you must file a homestead declaration with the county recorder’s office prior to filing for bankruptcy. The term “equity” refers to the value that you own–so if your mortgage is $500,000 and you still owe $200,000, then you have $300,000 in equity.
One of the big fears people have when filing is that they will lose all of their property in bankruptcy. Luckily, Nevada is known as a debtor-friendly state that protects many forms of personal property, including:
- Funeral service or burial plot funds held in trust
- Health aids
- Photographs and keepsakes
- 1 gun
- Mortgage impound accounts
- Criminal restitution
- Survivors’ wrongful death awards
- Refunds on income tax attributable to Nevada or federal Earned Income Credit
- Geological samples, paleontological remains, and catalogued and arranged ores, which are indicated in reference books
- Up to $5,000 of equity in art, books, jewelry and musical instruments
- Up to $12,000 of equity in furniture, appliances, household goods, electronics, clothing, yard and home equipment
- Up to $16,500 in awards for personal injury
Many people wonder if they will be able to keep their car in bankruptcy. The Nevada bankruptcy exemption for motor vehicles is up to $15,000 of equity, or unlimited equity in vehicles equipped for a disabled person. For example, someone who owns a vehicle worth $18,000 and owes $12,000 on it will have $6,000 worth of equity in the car.
Public benefits exemptions include:
- Aid to disabled, aged, blind and public assistance
- Industrial insurance (worker’s compensation)
- Compensation to crime victims
- Unemployment payments
- Children’s public assistance
- Benefits for vocational rehabilitation
- Social Security Act payments
Retirement accounts and benefits
Public employees’ retirement benefits are exempt.
Income and wages
The wages and income exemption is 75 percent of wages, or 50 times the federal minimum wage (whichever amount is greater).
Tools of the trade
- A maximum of $4,500 of equity in farm tools, trucks, equipment, seed, and stock.
- A maximum of $4,500 of equity in a prospector or miner’s dwelling, cars, working mining claim, appliances, and tools.
- A maximum of $10,000 of equity in library tools, equipment, supplies, and inventory.
- Any uniforms, arms, and accessories that you must keep.
There is a “wildcard” exemption of up to $1,000 of any personal property not already covered in the above categories.
Although Nevada’s most common bankruptcy exemptions are listed above, several other exemptions exist to protect your property. The state also periodically revises the exemption amounts. If you still have questions or are seeking more information about bankruptcy exemptions in Nevada, contact DeLuca and Associates at (702) 252-4673 to consult with a bankruptcy attorney for free.