Most of our clients file their bankruptcy cases in order to protect their assets. True, the bankruptcy trustee may sell some of the debtor’s assets and use the proceeds to pay creditors, but each state provides for “exemptions” to the property that may be sold. What this means is that the debtor is allowed to keep a certain amount of his or her property. In many instances, these exemptions are sufficient to allow a debtor to keep all of what he or she owns.
But what about the debtor that has no assets? He or she might not own a home, a car, or any valuables. Why would you file for bankruptcy if you have no assets?
There’s a simple answer: To protect assets you might own in the future.
You see, if you owe debts to your creditors, they can sue you. If they are successful, they will obtain a judgment against you. A judgment in Nevada generally lasts about six years, and may be renewed. This means that if you come to own property within six years after the creditor obtained a judgment against you, the creditor will pounce on it. In some cases, the creditor may even be able to execute its judgment against any income you earn within six years.
If you file for bankruptcy, however, there’s a good chance that judgment will get discharged, and the creditor will not be able to execute it against your property now, or in the future.
Indeed, bankruptcy really can be a “fresh start” to your life. If you live in the Las Vegas area, and the idea of a financial clean slate is appealing to you, contact us at 702-880-5554 to schedule a free initial consultation. We’ll help you decide whether bankruptcy is right for you.