Spending To Prepare For Your Nevada Bankruptcy Filing
Our Nevada Bankruptcy Firm Goes Over Purchases That Won’t Cause Problems With Your Chapter 7 Bankruptcy Trustee
Las Vegas Bankruptcy Lawyer takes a look at things to definitely not purchase when preparing to file for bankruptcy in Las Vegas.
Preparing For Chapter 7 Bankruptcy
When you’re preparing to file Chapter 7 bankruptcy in Nevada, you need to be careful about what you purchase. Your credit cards will be frozen once your petition is filed, which could have a significant impact on your budget. However, there are also limits on credit card spending in the time frame leading up to a bankruptcy filing. You also may have non-exempt funds that need to be spent before you file, or risk the trustee taking that money to pay your bankruptcy estate. Regardless of your specific circumstances, consider the following purchases if you need to spend money before filing your bankruptcy petition.
Household Goods & Furnishings:
This is a broad purchase category that can be used for several types of expenses around the home. Most of us have an old dishwasher, microwave, or other appliance that needs repair or replacement. However, you will also need to keep in mind the value of your existing household goods and furnishings. The exemption for household goods and furnishings in Nevada is $12,000. Any new household purchases must not bring your total value over the exemption limit unless you’re okay with the risk of the trustee taking items from your household to sell and pay your creditors.
Vehicle Repairs & Maintenance:
Even routine maintenance on some vehicles can come with a hefty mechanic’s bill. Or maybe your check engine light has been on for a while and you’ve been putting off getting it checked. Most vehicle repairs and maintenance will be construed as reasonable by a Chapter 7 bankruptcy trustee. After all, how will you get to work, run errands, and drop your kids off at school without a vehicle? But there are a few things to keep in mind before spending your pre-bankruptcy budget on your car.
The first consideration relevant here is your car’s value. If you file Chapter 7 bankruptcy, your vehicle must be within Nevada’s exemption limits or it won’t be protected from the trustee. The Nevada motor vehicle exemption is $15,000, which represents how much equity you can hold in the vehicle, not its market value. There is no use pouring money into a non-exempt vehicle, and major upgrades could bring your vehicle’s value over Nevada’s exemption. Don’t invest in glamor upgrades like a custom paint job or rims.
Another important thing to keep in mind is that Chapter 7 bankruptcy is your chance to get rid of a clunker vehicle, as well as the loan balance attached to it. If you owe money on your car, but it is high mileage or needs significant repairs, you may want to utilize the option of surrendering it in Chapter 7 bankruptcy. Many auto lenders are willing to work with Chapter 7 bankruptcy filers shortly after filing. For more information, contact our firm for your free consultation.
Shoes, Clothing, School Supplies, & Other Necessities For Your Children:
Now could be the time to stock up on the things that your children need. A Costco or Target run may be enough to spend any excess funds you have left before bankruptcy. Hold on to your receipts just in case the trustee has any questions about large expenditures at stores that also sell luxury items.
Dentist & Doctor Visits:
With how much medical appointments can cost out of pocket, it’s common for people to need to save up for non-emergency procedures. And bankruptcy trustees understand that for the most part, these expenses simply cost what they cost. There aren’t limits in place on how much can be spent on medical care in the midst of a bankruptcy filing. However, the trustee may not approve of elective procedures like fillers and plastic surgery. If you’re unsure about any of your pre-bankruptcy medical costs, you can run them past your bankruptcy attorney.
Your Bankruptcy Costs:
Nothing in life comes free, and bankruptcy is no exception. The court filing fees for Chapter 7 bankruptcy are $338, and $310 for Chapter 13. You can expect your bankruptcy attorney’s fees to be even higher. Both types of bankruptcy attorneys typically require some payment up front, but many Chapter 7 bankruptcy attorneys require payment in full before your petition can be filed. That is because the petition is filing is the cutoff date for when your debts are discharged by the bankruptcy. Basically, if your attorney files a Chapter 7 bankruptcy for you without up front payment, the attorney’s fees will be discharged by the bankruptcy. Bankruptcy trustees will not require a bankruptcy filer to pay their attorney in these circumstances.
Our Nevada bankruptcy lawyers have found a creative solution for this problem. For eligible clients, we can charge a low retainer fee, as low as $0 down. All work completed until your first petition is filed is technically free of charge. Our bankruptcy team will then file a skeleton petition on your behalf, which is a very basic form of your bankruptcy petition that gives you 2 additional weeks to complete the rest of your information. You can accrue debts between the skeleton filing and the filing of the rest of your petition. Our attorneys will charge for the work completed in that period, and it won’t be discharged in your bankruptcy. This method allows us to offer post-filing payment plans in Chapter 7 bankruptcy. That means after the Automatic Stay has gone into effect, stopping wage garnishments and debt interest payments.
Limit Your Credit Card Spending In Preparation For Bankruptcy
It isn’t uncommon for bankruptcy filers to rely on credit cards in the time frame leading up to their filings. The Bankruptcy Code sets out standards for discharging credit card debt that is incurred shortly before a bankruptcy filing. If you have the luxury of planning precisely when your case will be filed, you will need to be cautious of your spending for the 90 days prior.
The bankruptcy trustee will review your credit card statements to review your spending in preparation for bankruptcy. Cash advances of more than $1,000 in the 70 days before your bankruptcy are not allowed. If you have spent more than $725 on luxury goods and services in the 90 days before your filing, that debt will not be included in your bankruptcy. That means that even after your case is discharged, that debt will remain and you will eventually need to repay it. The reason for this is to prevent people from accruing credit card debt on non-necessity expenses with no intent to ever repay it. You will also be disqualified from declaring bankruptcy again for a certain number of years.
Let The Las Vegas Bankruptcy Experts Handle The Details Of Your Case
There are serious consequences in exceeding pre-bankruptcy spending limits. Most often, it will result in your debts not being discharged by your filing, or the trustee requiring you to reimburse the bankruptcy estate before your case can proceed. There are also countless other mistakes that someone without experience could make on a bankruptcy petition.
Our Las Vegas bankruptcy attorneys make expert representation affordable, whether or not you have the money to pay us up front. We will guide you through each step of the process, making sure that all of your debts are discharged so you can move forward with a clean slate.
To get started today for free, call or use our online form to request our phone consultations. Let us know when would be most convenient for you, and if you prefer to speak with our Las Vegas bankruptcy lawyers over the phone or in person. Once again, your initial consultation is 100% free of charge. What have you got to lose, besides debt? Get started today.
Las Vegas Bankruptcy Lawyers