Nevada’s different than the rest of the United States of America, we all know that: different laws, different history, an extremely different sensibility that’s never taken kindly to governmental oversight. However, the economic crises affecting our country have hit Nevada particularly hard, and all households that have suffered through problems with credit card balances over the past few years must come to grips with the need for resolution of out of control debt loads. Given the nature of Nevada’s citizenry – which, shall we say, may be considered exceptionally prone to gambling with family finances in the hope of a sudden turnaround of fortunes – an unfortunately large percentage of our state’s residents have themselves been cursed with debt burdens sufficiently high that they can no longer realistically anticipate a full repayment of their loans within five to seven years without unbearably depriving their households of the necessary comforts. Once that realization has been made by the entire family, there’s no other choice but to enter some heightened structure of debt management which would include a thorough examination of both the Chapter 7 and Chapter 13 programs of bankruptcy protection. Much as Nevadans may believe that they understand all that there is to know about bankruptcy by simply collecting bits of information along the way through a life spent in the United States, Chapter 7 and Chapter 13 bankruptcy protection actually have quite a few complexities that should be addressed before any decisions are finalized.
Although the citizens of a state that continues to resist state taxation upon income or similar government initiatives may instinctually loathe the very notion of bankruptcy protection, Nevada households drowning in unsecured debt balances will have no other choice but to at least consider Chapter 7 or Chapter 13 bankruptcy to assist their families through tough times. No resident of Nevada would want to have to rely upon governmental support to provide a fresh start for their loved ones, but, under financial duress with the economic prospects for our state and our nation appearing so very dire, bankruptcy may indeed be the best option for borrowers without another obvious recourse. However, over the past few years, bankruptcy protection itself has changed dramatically, and the Chapter 7 and Chapter 13 programs no longer hold the guarantee of relatively comfortable rebirth. A consumer who is unfamiliar with the state of Nevada’s regulations will be helplessly subject to becoming a victim of both the lenders and the agencies ostensibly poised to assist the overwhelmed borrower. Erroneous trust in the extent of governmental protection as well a lack of knowledge about the fundamentals of bankruptcy laws will only result in eventual heart ache as well as the winnowing of family finances. Sad business, throughout. Much as we could all agree that a better world wouldn’t need such regulations, once borrowers realize that their financial lives have become unmanageable, a course of self education about the various forms of bankruptcy should be a vital component of the Nevadan households’ attempts toward the eradication of unsecured debts.
First of all, for even those Nevadans who have friends or co-workers or family members that have declared bankruptcy prior to 2005, consider their advice next to worthless when analyzing the potential success of bankruptcy declaration. The Bankruptcy Abuse Prevention and Consumer Protection Act, signed into law just under four years ago, greatly limits the power of Nevada trustees when analyzing individual bankruptcy petitions. As most Nevadans already know, two separate forms of bankruptcy protection exist which are utilized by consumers. There’s the Chapter 7 debt liquidation program that erases all of the unsecured bills legally authorized under the current United States Bankruptcy Code (which, the last decade, does not include student or educational loans even if they were privately held) and the Chapter 13 debt re-organization program which, more similar in nature to the re-structuring of debts allowed businesses who take out Chapter 11 protection in order to give the owners time to find sufficient funds to prevent legal forfeiture, does not actually reduce the balances owed but features an Automatic Stay that should at least ensure home owners wouldn’t need worry that their primary residence face foreclosure or forbearance. To be certain, Chapter 13 protection yet holds some meaning for those Nevada borrowers who have temporarily fallen upon hard times but do not wish to see their assets fall to seizure by the courts. However, under the rigorously defined stipulations of the United States Bankruptcy Code following the BAPCA legislation, even those Nevadans previously unfamiliar with the Chapter 13 maneuver may find themselves helplessly dumped into the program.
In Nevada and the rest of the country, the initial bankruptcy proceedings haven’t changed all of that much even after the recent congressional alterations of the law: things have just been unnecessarily complicated. The borrowers will have to work through an ever more complex series of documents – including the original bankruptcy petition, a listing of household assets, and the so called creditor matrix which compiles each and every potential lender whether their debts are unsecured or tied to collateral – and then endure the 341 meeting (named for the section of the US Bankruptcy Code in which the details of the proceedings are laid down) as the trustee chosen by the Nevada county courts analyzes the particular case file and oversees an interrogation by representatives of the lenders. Presuming the accuracy of the data written into the actual bankruptcy paperwork to be above reproach, this meeting is potentially the most important aspect of declaration, but, for ordinary Nevada consumers, there shouldn’t be much to worry about. Indeed, under normal circumstances, the creditors won’t send anyone to the 341 meeting unless the debts are exceptionally large, but, nevertheless, the obligation should not be overlooked. Depending upon the specific area of Nevada in which the borrowers reside, the location of this meeting can change so all bankruptcy applicants must be sure to talk to their attorneys or, if they’re attempting bankruptcy declaration without assistance, the appropriate officials to make sure they have the correct address (though it should also appear on the official notification sent out to all applicants from the appropriate Nevada county clerk following their acceptance of the petition).
Once again, for Nevadan borrowers who have had prior experience with bankruptcy protection, they may quite reasonably dismiss both the documented declaration and the 341 meeting as little more than a formality. Throughout the long history of bankruptcy protection in Nevada and the rest of the United States, the leading element of qualification for the debt elimination program had always been the borrowers’ demonstrated inability to repay the loans that they had taken out. Under the new federal statutes, though, borrowers will only be deemed eligible for Chapter 7 bankruptcy protection if they make less than what the US Department of Census has determined to be the median income for wage earners within their state. As of the date of this writing (though, nature of the beast, this shall fluctuate greatly as the seasons pass), single Nevadans shall have to prove that they made less than forty five thousand dollars, a Nevada family of two shall have to have made less than fifty seven thousand dollars, it’s sixty five thousand dollars for a three member household, sixty seven thousand dollars for a four member household, and curious Nevada debtors should add an addition sixty nine hundred dollars for every member thereafter. To underline the repercussions of what this could mean for borrowers in Nevada who’ve done well for their families in the years prior to filing for bankruptcy protection, even consumers who’ve seen their incomes sharply trail off during the current recessionary period or households that have, for one reason or another, been forced to absorb debts that would dwarf even the highest earnings should not assume that their requests would be formally judged legitimate. The Nevadan borrowers filing for bankruptcy who do not navigate their way toward Chapter 7 debt elimination bankruptcy protection will inevitably end up having the Nevada court trustee filter them into the Chapter 13 program, and very few of the borrowers of our state go through Chapter 13 bankruptcy without defaulting after a poor month’s luck.
Chapter 13 bankruptcies are tough on every family that attempts the strategy. The trustee chosen by the Nevada courts will be called upon to draw up a budget that takes every available dollar for the repayment of the secured and unsecured creditors, and, since the trustee will be legally required to calculate said budget utilizing the expenses calculated by the Internal Revenue Service as the average cost of living for a Nevadan household (no matter the truth of the Nevadan household’s genuine experience nor their paper trail of receipts), borrowers who diligently plough the Chapter 13 furrow may have to pull their children out of school or even move to a different area of Nevada. Even worse, with the Bankruptcy Abuse Prevention and Consumer Protection Act legislation guiding the hands of the trustee, Nevadans that do prove their legitimacy will find the courts picking through their household for anything newly considered an asset under the BAPCA regulations. Aiding the people legally found to be citizens of our state, the Nevada Bankruptcy Code provides their own exemptions for the debtors’ property which are considerably more agreeable to deserving families than what the federal exemption slate provides. Under the Nevada statutes, borrowers are allowed to maintain their primary residence (whether real property or mobile home) so long as the appraisal value’s less than three hundred and fifty thousand dollars. Furthermore, each borrower’s allowed one fire arm, portraits and keepsakes, a library to a value of fifteen hundred dollars, household goods (everything from linen to lawn mowers to furniture) worth less than twelve thousand dollars, and a motor vehicle worth no more than fifteen thousand dollars above the attached financial liability. There are far more exemptions specifically mentioned within the Nevada code – many of which, such as the mineral collections or paleontological studies, could only be appreciated by the residents of our state – but the litany of exemptions offered by the Nevada authorities would dwarf the entirety of this article.
Suffice to say, no matter how relatively blessed the problem debtors of Nevada may consider themselves compared to the rest of the nation, the Chapter 7 debt elimination solution’s still more than a bit risky for any Nevada households that don’t want the county courts determining which of their possessions could be deemed (to use only one of the highly subjective portions of the formal Nevada Bankruptcy Code verbiage) keepsakes. Because of all of this, many of the Nevada borrowers have looked upon different avenues of debt resolution, but, as the credit card providers continue to fund ad campaigns that both glorify the pleasures of reflexive spending and castigate Chapter 7 bankruptcy protection as a needless luxury, too many fall prey to the temptations of Consumer Credit Counseling or debt consolidation mortgage loans which only buoy borrower procrastination and aid the escalation of compound interest. Far better for Nevada consumers worried both about their mounting credit card debt loads as well as the dangers of bankruptcy to look into the debt settlement negotiation program. This plan utilizes the fears of Chapter 7 debt liquidation still lingering among lender representatives to force an immediate cut of the balances owed – by as much as two thirds, according to Nevada consumers who’ve successfully attempted the treatment – through a series of negotiations that also promise the settlement clientele will repay everything remaining in a matter of years. Debt settlement won’t work for every Nevada consumer, the standards of the program are sufficiently high that the most desperate borrowers may sincerely be better off taking advantage of whatever protections that Chapter 7 bankruptcy still offer, but, given that free consultations with certified settlement specialists are offered twenty four hours a day through internet sites, each Nevada household should take the time necessary to discover the truth for themselves.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
