Illegal Lockouts and Utility Shut Offs
What is Bankruptcy?
Bankruptcy allows debtors who cannot pay their bills to get a fresh financial start by either eliminating debts or reorganizing their debts for repayment. Federal law provides the right to file for bankruptcy protection and bankruptcy court handles all bankruptcy cases. When debtors file for bankruptcy, the law prevents their creditors from seeking to collect debts until the court or trustee administers the bankruptcy estate.
How Does Bankruptcy Work?
Generally, an individual debtor filing for bankruptcy can either file under Chapter 7 or Chapter 13 of the Bankruptcy code. Chapter 7 allows you to eliminate most, if not all, of your unsecured consumer debt. This includes credit card debt, medical bills, past due utility bills, and other unsecured loans. The debtor keeps all exempt property and any unexempt property will most likely be sold for cash for the trustee to pay to the creditors. Nevada has a list of exemptions that a debtor may use in a Chapter 7 bankruptcy filing. You must have lived in Nevada for at least 2 years to claim Nevada exemptions.
For those debtors with a house or a car to save from repossession or foreclosure, Chapter 13 may help. Chapter 13 essentially reorganizes your debts by making an affordable payment plan for the debtor to repay creditors. A trustee collects these payments from the debtor and is responsible for paying the creditors. The trustee also assures that the debtor is abiding by the terms of the payment plan. The bankruptcy is not complete, or “discharged,” until the terms of the repayment plan are met. The plans last 3 or 5 years. The benefit of a Chapter 13 filing is that the debtor is usually allowed to retain their property. However, the debtor must have a sufficient, regular source of income and agree to the terms of the repayment plan. Chapter 13 allows the debtor to cure the arrearage on any house or car payment during the plan period.