Did you know that creditors can go after your property once you become insolvent? They can attack your assets, garnish your wages, or have your properties foreclosed. To prevent such things from happening, debtors can file for bankruptcy, which stops collection efforts, creditor harassment, and prevents you from losing any of your property, especially your home. There are several benefits to filing bankruptcy if you are unable to repay your debts.


When you review your total debt numbers and income and realize that the debts outweigh your income, you may need to consider bankruptcy to stop creditors from garnishing your wages and placing liens on any bank accounts. Once an individual files bankruptcy, the courts will place an order or an “automatic stay.” An automatic stay does not cancel one’s debt, but it does suspend any debt collection proceedings until the bankruptcy is complete or the stay is lifted. By having the stay in place, it will halt most creditor calls, wage garnishments, repossessions on your vehicles, and lawsuits, but not all. For example, creditors are still permitted to collect child support payments and any criminal cases can continue to move forward. 


If an individual is faced with losing their home in which they hold significant equity, they may be able to keep their home from foreclosure through bankruptcy. When filing a Chapter 7 or Chapter 13 bankruptcy, Nevada state law has a list of personal property exemptions and allows you to keep certain assets to help you with your new start in life. The following property is generally considered exempt:

  • Your car up to $15,000.00 of equity
  • Your house up to $605,000.00 of equity
  • Furniture and household goods up to $12,000.00
  • Wages – 75% of disposable earnings or amount equal to 50 times the federal minimum wage
  • Social Security, welfare, and unemployment benefits
  • Retirement savings


The most important effect of a bankruptcy on your credit report is that it removes your obligation to repay past debts, and that allows you to start rebuilding your credit. Even though a bankruptcy filing will remain on one’s record for 7 to 10 years, many debtors begin improving their credit rating after filing for bankruptcy since the debts have now been dissolved. You are required by law to undergo Credit Counseling within 180 days before you can start filing for bankruptcy. You must also successfully complete a personal financial management course as the pre-discharge requirement in bankruptcy. By doing so, debtors will receive education on how to rebuild credit and learn new financial strategies. Another strategy is to get a secured credit card after your bankruptcy is discharged so that you can start rebuilding your credit. If you are not able to get a secured credit card another option may be becoming an authorized user on a credit card to begin rebuilding your credit.


As mentioned above, filing bankruptcy will allow you to dissolve your obligations under certain circumstances. If you play by the court’s rules and have been on time with your payments, some remaining unsecured debt such as credit cards and medical bills may dissolve. Nevertheless, not all types of debts qualify for elimination.


Bankruptcy is not a fast or straightforward process, but it can offer the relief you need. Once your unsecured debts are removed, and your case is closed, you can move forward and start rebuilding your credit.

If you are having financial difficulty, are unable to repay your debt, and have no liquid assets, then bankruptcy can be a way out.  Debt Rescue Law can explore all options and assist you in filing for bankruptcy if need be. Give us a call at (833) 707-1234 today for a free consultation.

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