Types of Bankruptcy in Nevada
Many people struggling with debt in Las Vegas assume bankruptcy is a one-size-fits-all option. In reality, there are many types of bankruptcy that address a wide variety of situations. An experienced bankruptcy lawyer in Las Vegas can discuss your specific circumstances and goals to help you determine which type of bankruptcy may be most appropriate for your situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common type, and it can be filed by individuals who meet certain requirements, or by businesses needing a court-supervised wind down. The process involves a “liquidation” (sale) of non-exempt assets in order to pay debts. While at first this might sound like you’re going to lose everything you’ve worked for, the reality is most people have little to no non-exempt assets left if they are considering bankruptcy. For example, most people get to keep their home, their vehicle, and almost all their personal possessions. An individual chapter 7 bankruptcy can discharge you of your debts and wipe the slate clean.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is an option available to individuals who don’t meet the requirements for chapter 7, have significant non-exempt assets, or need to ‘reorganize’ their finances. This process involves a repayment plan that allows your debts (and sometimes only a portion of your debts) to be paid back over a 3-to-5-year period. With this option, you are not required to liquidate assets. The repayment plan is based on your income and reasonable household expenses, and the bankruptcy court ensures it’s realistic and proposed in good faith. This is a great option for people who need the benefit of time to accomplish things like catching up on past-due mortgage or vehicle payments, or repaying tax debts.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is commonly used by businesses in Nevada to ‘reorganize’ debts with repayment plans while continuing their ongoing business operations. Chapter 11 can be complex, costly, and time consuming, often involving repayment plans that take more than five years to complete. This may be the only option for a business to reorganize unless it qualifies for relief as a “small business” under Subchapter V of Chapter 11 of the bankruptcy code.
Subchapter V Bankruptcy
Subchapter V bankruptcy was created for small businesses and small business owners in Nevada, allowing them to “reorganize” more quickly and less expensively than through traditional Chapter 11. Unlike traditional Chapter 11, the Subchapter V process involves only a 3-to-5-year plan of reorganization, and the business’ owners typically stay in complete control of operations while retaining their equity. This is an ideal option for small businesses in any area of business needing to ‘reorganize’ debts while continuing business operations and servicing their customers.
Debt Settlements
While a debt settlement isn’t a type of bankruptcy, it may be a viable non-bankruptcy in some situations. Debt settlements involve negotiations with your creditors aimed at securing payoff reductions or feasible repayment agreements. If creditors realize they might receive little or nothing if you decide to file for bankruptcy, they may be more willing to negotiate these terms.
Can a Bankruptcy Lawyer in Las Vegas Help Me?
An experienced bankruptcy lawyer in Las Vegas can assess your circumstances and options, and help you choose the most appropriate type of bankruptcy based on your unique situation. Some options might be readily available, while you may be completely ineligible for others. To get a better understanding of your options, contact Larson & Zirzow today to schedule a consultation.
Sources:
nvbar.org/for-the-public/find-a-lawyer/lrs/bankruptcy-and-debt/
nvbar.org/wp-content/uploads/bankruptcy%20brochure.pdf