When an individual files for bankruptcy, they will usually file for two types of bankruptcy: Chapter 7 or Chapter 13:

• Chapter 7 Bankruptcy – The bankruptcy trustee appointed to administer your case will sell any nonexempt property and distribute the proceeds to creditors.
• Chapter 13 Bankruptcy – You can keep everything you own. You’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through a repayment plan.

For people who cannot pay their debts, bankruptcy is a saving grace, but it is not to be taken lightly. There are drawbacks to declaring bankruptcy, and it should only be used when absolutely necessary.

What Kinds of Debt Does Bankruptcy Eliminate?

If you’re considering bankruptcy, you are likely in dire financial straits. You may be choosing between paying down credit card debt and buying groceries. Alternatively, you may be able to make ends meet, but your debt is not getting any smaller because of staggering interest rates. Bankruptcy is a highly effective financial solution for hundreds of thousands of people each year.

But the question most people ask is, “Will it get rid of all my debt?” The answer, unfortunately, is complicated. In general, both Chapter 7 and Chapter 13 bankruptcy can discharge most types of unsecured debt—not secured debt. Unsecured debt is anything that does not have collateral backing, and it can include:

• Personal loans
• Credit card debt
• Medical bills
• Utility bills
• Student loans
• Court-ordered child support/alimony
• Fines or penalties for fraud or other crimes
• Tax debt

Because nothing serves as collateral, unsecured loans are riskier for lenders, which is why the interest rates are high. Secured debt, on the other hand, is backed by collateral, and the interest rates tend to be lower. With mortgages and automobile loans, for example, the lenders have the contractual right to seize your house or car (via foreclosure or repossession) if you stop making payments.

The Exceptions

Although student loans, child support, alimony, fines/penalties, and tax debt are technically unsecured, bankruptcy courts do not treat them the same way as other types of unsecured debt.

More specifically:

• Child support, alimony, fines, and penalties cannot be discharged under any circumstances.
• Student loans can be discharged, but only through an adversarial proceeding, where the filer proves they would experience “undue hardship” if they continued paying off their loans. This is generally very difficult to prove.
• Tax debt can be forgiven, but only on very rare occasions. Specifically, the government must believe it cannot reasonably expect you to repay the full amount. Unlike other creditors, the federal government can place liens on your property, garnish your wages, and freeze your bank accounts without taking you to court first.

What to Do if You Owe Non-Dischargeable Debt

Bankruptcy might still be a viable option, even if a lot of what you owe cannot be discharged. Chapter 13, for example, can help you catch up on non-dischargeable debt (e.g. mortgage payments, student loans, tax debt, child support, etc.) over the course of a 3-5-year repayment plan. If you fully catch up on arrears by the end of this plan, you can keep your property and discharge qualifying unsecured debt.

Filing Bankruptcy in Las Vegas: Navigating Local Resources and Challenges

Filing for bankruptcy in Las Vegas comes with its own set of unique challenges and opportunities. As a resident of Clark County, you have access to various local resources that can help you through this difficult time. The Clark County Government offers several programs and services that can provide support, including financial counseling and legal aid. Additionally, the U.S. Bankruptcy Court for the District of Nevada is located in Las Vegas, making it convenient for you to attend necessary hearings and file required documents.

One of the most pressing issues for Las Vegas residents considering bankruptcy is the high cost of living combined with fluctuating income, especially for those working in the hospitality and entertainment industries. Many locals struggle to keep up with mounting credit card debt, medical bills, and other unsecured debts. The seasonal nature of employment in Las Vegas can make it difficult to maintain a steady income, exacerbating financial stress.

At Hurtik Law & Associates, we understand the specific financial pressures Las Vegas residents face. Whether you're dealing with the aftermath of a job loss or trying to manage overwhelming debt, our team is here to guide you through bankruptcy. Considering your unique financial situation and the local economic landscape, we can help you determine whether Chapter 7 or Chapter 13 bankruptcy is the right option for you.

Don't let debt control your life. Contact us today to schedule a consultation and take the first step towards financial freedom. Our deep understanding of the Las Vegas area and its economic challenges allows us to provide tailored advice and support, ensuring you get the best possible outcome for your bankruptcy case.

Let Our Team Assess Your Situation

Ultimately, you will need the skills and insight of an experienced legal team to determine whether bankruptcy is the right option for you. At Hurtik Law & Associates, we understand the financial and emotional stress you may be experiencing, and we are committed to putting our experience to work for you. Let us handle the legal aspects of this procedure so you can focus on building a better future for you and your loved ones.

Call us at (702) 479-5322 or contact us online to schedule a consultation today!