Bankruptcy law can be a really complicated thing to have to navigate. Not only is the federal bankruptcy code quite complex, it is frequently superseded by state bankruptcy laws as well. One state where this is the situation is Nevada.
Of Nevada's bankruptcy laws, the laws most important to debtors are probably its laws controlling what exemptions could be made from bankruptcy liquidation. During a chapter 7 bankruptcy, a trustee will be appointed who has the job of acquiring certain kinds of income of a debtor or repossessing that debtor's assets. The income and revenue from the sale of that assets will be used to pay back creditors.
However, if the debtor could declare an exemption for that salary or assets, the debtor will be able to retain that income or property. What kinds of income and assets could be exempted are very exact and are set up by either federal or state laws. For property like an automobile or house, the amount that can be exempted will be listed as a dollar amount of equity. If the equity of your automobile or home is less than the exemptions listed, you should be able to retain that automobile or house. If not, you'll at least get that money value listed after the liquidation has taken place.
In Nevada, the exemption for homes is actually quite generous. Up to 125,000 dollars in the capital of a home can be exempted. There are some limits on this though. Only one exemption of 125,000 dollars may be made by a married couple living in that house. The exemption should also be declared before the debtor files for bankruptcy. If not, the results could be disastrous.
For normal income, a person may also exempt up to seventy five percent of his or her normal wages. However, if the debtor is in a low salary bracket, the judge may actually hike this number so more of that person's wages can be exempted.
Not the same kinds of insurance can also be exempted from bankruptcy liquidation in NV. For example, life insurance premiums could be totally protected if they do not add up to over 1000 dollars in a single year. If you aren't the one insured by the policy, you are likely to have all the life insurance revenue protected. Proceeds from an annuity contracts could also be protected as long as they do surpass 350 dollars a month. Proceeds from a fraternal benefit society or group health or life insurance are also probably to be completely protected.
The exemptions a debtor could take in Nevada aren't limited to only these few choices. Because of the complexity of the bankruptcy code, you should always consult a lawyer before you file for bankruptcy.
