Question 1

1.1 Can I keep my car in the bankruptcy?

Accepted Answer

In a chapter 7 bankruptcy, the things you get to keep are called “exemptions”. The car exemption in Nevada bankruptcy law applies to the equity in the vehicle. Equity is calculated as the market value of the vehicle less the amount of the loan. If the equity in your vehicle is $15,000 or less, you can claim an exemption for the entire car. If the amount of equity in your vehicle is more than $15,000, DebtBlasters can usually exempt up to another $10,000 in equity using other available legal exemptions.

If you are married and your spouse is also filing for bankruptcy with you, then your spouse can claim a second, separate $15,000 exemption for a second vehicle. If you are married but your spouse will not be filing with you, you cannot claim your spouse’s second exemption in your case: the rule is one vehicle exemption per debtor.

If your loan monthly payment is too much, or if your vehicle has substantial negative equity, you also have the option of surrendering your car in the bankruptcy and not pay any deficiency. If you decide to surrender your car, you typically have to surrender it to the lender about four to six weeks after your bankruptcy case is filed.

If you want to keep your car, you must continue to pay your car loan both during and after bankruptcy.

If your vehicle is leased, then exemptions don’t apply and you can generally keep it so long as you can afford it. If you can’t afford it, you can get rid of it in the bankruptcy by surrendering it to the leasing company, and not pay any deficiency.

Question 2

1.2 Can I keep my house in bankruptcy?

Accepted Answer

In a chapter 7 bankruptcy, the things you get to keep are called “exemptions”. The Nevada homestead exemption applies to the equity in your residence. Equity is calculated as the market value of the house less the total amount of loans. The homestead exemption only applies to where you reside – it does not apply to raw land, second homes, property in another state, or investment property.

Nevada has a very generous homestead exemption, if you have lived in the house for more than 3 years and 4 months. If you have lived in your house for more than that length of time, then you can exempt up to $605,000 in equity.

If you have resided in the house for less than 3 years and 4 months, you can exempt up to $189,050 equity in the house. [If you have rolled over equity from one house sale to purchase another, please let DebtBlasters know, because in certain circumstances you may be entitled to the full $605,000 exemption.]

If you want to keep your home, you must continue to pay your mortgage during and after bankruptcy.

Question 3

1.3 How will bankruptcy affect my credit score?

Accepted Answer

A chapter 7 bankruptcy will remain on your credit report for 10 years from the date it is filed. Although you should expect a low credit score immediately following bankruptcy, immediately after the case ends you can begin to rebuild your credit score. Most of our customers have credit scores between 630 and 650 after one year, and between 680 and 720 after two years. Having good post-bankruptcy credit management will help to rapidly improve your scores.

Question 4

1.4 Does my spouse have to file with me? If not, how will bankruptcy affect my spouse’s credit score?

Accepted Answer

Bankruptcy is like taxes: If you are married, you can file either jointly or separately.

If you decide to file for bankruptcy without your spouse, then your spouse’s credit will not be impacted. Of course, your spouse’s credit cards and debt will not be discharged in your bankruptcy case. [Note that if you share debts with your spouse, such as a shared credit card or credit line, then only your obligation to pay the debt is erased. Creditors will still be able to go after your spouse for such shared debts.]

Question 5

1.5 I'm being garnished. When will bankruptcy stop a garnishment?

Accepted Answer

Yes, filing for bankruptcy will stop a wage garnishment. When a bankruptcy is filed, the Bankruptcy Code imposes an "automatic stay" for garnishments and other legal actions against the person who filed for bankruptcy. DebtBlasters will ask you about any recent garnishments against you, so that we can identify them in your bankruptcy forms that we file with the court. Garnishments do not stop until the bankruptcy is actually filed.

Question 6

2.1 I just got served with a lawsuit. Will bankruptcy stop the lawsuit?

Accepted Answer

Yes, a bankruptcy will stop a lawsuit. When a bankruptcy is filed, the Bankruptcy Code imposes an "automatic stay" for lawsuits against the person who filed for bankruptcy. DebtBlasters will ask you about any recent lawsuits or other legal proceedings that you are involved in, so that we can identify them in your bankruptcy forms that we file with the court.

Question 7

2.2 When will debt collection companies stop calling me?

Accepted Answer

When you become a DebtBlasters client, you can tell your creditors that you have retained bankruptcy counsel, and generally they stop calling you for several weeks, simply because it’s a waste of money for them to call you if you are about to file for bankruptcy. However, there is no law prohibiting them from calling you until your case is actually filed and you have a case number assigned.

When you file a chapter 7 bankruptcy case, the “automatic stay” of bankruptcy immediately goes into effect. The automatic stay stops creditors, lenders, and debt collectors from taking any action against you, including phone calls, bills, collection letters, lawsuits, judgments, wage garnishments, and repossessions.

Many creditors find out about your case via a Notice of Bankruptcy mailed to them by the Court, which takes a few days. Lenders then have to update their computer files to put a bankruptcy hold on your file, and then notify their collections agents. Realistically, debt collection stops within about two weeks after your bankruptcy case is filed.  
 
However, once your bankruptcy case has been filed, we recommend that you start answering collections phone calls and tell the agents that you have filed for bankruptcy. Give them your bankruptcy case number, and tell them to stop calling you and leave you alone. They will immediately update their files and stop calling you.

Question 8

2.3 When should I stop making payments on my credit cards?

Accepted Answer

Do not stop paying credit cards until you know you want to file for bankruptcy and have confirmed that you qualify to file for bankruptcy. In general, our customers stop paying all credit cards and unsecured loans once they sign up to be DebtBlasters clients.

Question 9

3.1 What is chapter 7 bankruptcy, and how does it differ from other chapters?

Accepted Answer

Chapter 7 bankruptcy, also known as a “liquidation,” is the quickest and easiest type of bankruptcy. Every chapter 7 bankruptcy case is assigned someone called a bankruptcy trustee, whose job is to sell / liquidate any fancy assets (the legal term is “nonexempt” assets) of the debtor and use the proceeds to make a one-time payment to creditors. Fortunately, almost all clients of DebtBlasters will be fully exempt, meaning that they will not have to turn over any property to the trustee. Chapter 7 bankruptcy cases last about four months.

Chapter 13 bankruptcy cases, known as “reorganizations”, are long and expensive. A debtor is in bankruptcy for three to five years, and has to make monthly payments to the Court. Chapter 13 cases typically cost around $6,000 in attorney fees.

Chapter 11 bankruptcy cases, also known as reorganizations, are long and incredibly expensive. This chapter is available for persons with substantial debt, typically over $2 million. Chapter 11 cases usually cost over $40,000 in attorney fees.

DebtBlasters only offers chapter 7 bankruptcy cases to its customers.

Question 10

3.2 Can I choose which debt is forgiven in bankruptcy?

Accepted Answer

If you file for chapter 7 bankruptcy, you are required to list all of your debts in your bankruptcy schedules and forms, even ones that you “do not want to go bankrupt on.” Bankruptcy discharges (=wipes out) your debts, which means you no longer have to pay it. But bankruptcy laws do not prohibit you from voluntarily paying debts after the discharge.

Reaffirmation is a type of agreement a debtor can make with a lender (typically a secured lender, such as a house loan or car loan) to reinstate the debt so that the loan is not subject to discharge. DebtBlasters will help you decide whether signing a reaffirmation agreement is right for you.

Question 11

4.1 How long does it take for my debts to be forgiven?

Accepted Answer

In most cases, a chapter 7 bankruptcy discharge is issued about four months after DebtBlasters files your bankruptcy case.

Question 12

4.2 When can I stop making payments on my credit cards?

Accepted Answer

Do not stop paying credit cards until you know you want to file for bankruptcy and have confirmed that you qualify to file for bankruptcy. In general, our customers stop paying all credit cards and unsecured loans once they sign up to be DebtBlasters clients.

Question 13

4.3 I have other questions about my financial situation. Can I speak with someone at DebtBlasters?

Accepted Answer

Certainly! DebtBlasters is a Nevada law firm, with an office in Las Vegas. If you have other questions that are not answered above, feel free to call our office and let us know that you are thinking about filing for bankruptcy and that you have a question about your financial situation before you decide. We’ll be happy to answer all of your questions.

Our office phone number is (702) 614-0600, and our office is open during normal business hours (M-F 9:00 a.m. to 5:00 p.m.). If it’s after hours, you can also send us an email at clientsupport@debtblasters.com and we’ll contact you the next business day.

Frequently Asked Questions

1. Keeping Your Assets, And How Bankruptcy Affects Your Credit Score

2. Relief From Creditor Pressure

3. Chapter 7 And Debt Elimination

4. More