This is a confusing and stressful time in your life as you move closer to a decision to declare personal bankruptcy. As an experienced bankruptcy attorney Las Vegas, I think a good start is to provide you with a very basic glossary of the terms you'll hear or read often in coming days. Feel free to ask me for additional input on these or other words and phrases that come your way.
Bankruptcy Filing/Discharge — Filing is the act of declaring bankruptcy and initiating legal proceedings. Discharge is the point at which the courts decide that your debt is paid and the bankruptcy ends. The filing has come to a successful conclusion and you're on your way to financial recovery.
Chapter 7/Chapter 13 — These are two types of personal bankruptcy plans. In Chapter 7 proceedings, your goal is to liquidate. You'll turn over all but exempt assets and start over again, debt-free. In a Chapter 13 filing, you'll attempt to financially reorganize. You'll pay back what you owe, to the limit of your abilities according to means testing, and over a specified period of time. In Nevada, this is likely to be three to five years.
Debtor/Creditor — The debtor is the individual or entity to whom it is claimed that you owe money; you are the creditor.
Exempt/Non-Exempt Assets — Exempt assets are those that can't be taken from you in a Chapter 7 bankruptcy proceeding. In Nevada, this can include material goods such as your primary residence and vehicle, and several categories of personal property, most up to a certain dollar value. It can also include life and medical insurance plans and pensions. Non-exempt assets can be taken from you in a Chapter 7 bankruptcy. This might include homes over a certain value, a secondary residence or a second car, among others.
Means Test — This is where the bankruptcy court takes all of your financial information — income sources, debts, assets — and determines how much you can reasonably afford to repay as part of a Chapter 13 filing. You'll make monthly payments as determined by the court, over a specified period.
Secured/Unsecured Debt — Secured debt is backed by collateral, usually the return of the items themselves. This can include homes with a mortgage, which can be foreclosed upon, and cars still under loan contracts, which can be repossessed. Unsecured loans don't have collateral attached, such as credit card balances or a loan that a parent might have made.
Does this help?
There's sure to be plenty more you need to know as you begin to consider filing for personal bankruptcy. As a bankruptcy attorney Las Vegas, I'm standing by to answer all of your questions and help you move forward with confidence during this challenging time.