When most people think of filing for bankruptcy, a bleak picture comes to mind: all possessions being removed, a home being lost, nothing left but the clothes on your back. Thankfully, this is far from the case. Bankruptcy is not meant to put you on the streets or make you start from scratch. In fact, you will likely be able to hold on to your most cherished assets, including your home, car, and most cherished, personal possessions.
The property and/or assets that you are legally able to keep during (and after) filing for bankruptcy are called “bankruptcy exemptions.” These differ state by state, and they do have their limits; however, you may be surprised to find that those limits are higher than minimal.
Common Nevada Bankruptcy Exemptions
Below you will find the most common exemptions in Nevada. While reading this list, keep in mind the following:
*Are you filing jointly with a spouse or alone? When you file with a spouse, each person can typically claim the full amount in each exemption category, as long as each spouse has an ownership interest in the property. To note: there are exceptions to this “doubling” allowance.
*You must claim an exemption formally, using an official bankruptcy form. Do not forget this vital step. A qualified bankruptcy attorney can assist you with the process.
Nevada Homestead Exemption
21.090(1)(l), (m); 115.010; 115.020 – this exemption allows you to keep equity in your primary residential property or mobile home, up to $605,000. Spouses cannot double this exemption and must record a homestead declaration before filing for bankruptcy. As well, this applies if you have been living in the residence for more than three years; if you have not, the amount you can claim as exempt lessens.
Let’s look at an example. If you own a home worth $600,000 and owe $200,000 on the mortgage, that gives you $400,000 of equity. Let’s say you are filing for Chapter 7 bankruptcy in Nevada; you can record and claim the homestead exemption and protect the full amount of equity in your home.
Personal Vehicle
21.090(1)(f), 21.090(1)(p) – Up to $15,000 of motor vehicle equity (note: if you are disabled, your amount is unlimited) can be protected during and after the process of filing for bankruptcy in Nevada.
Let’s say you own a car worth $18,000, and you still owe the financing company $12,000, leaving you with $6,000 of equity in the car. If you file for Chapter 7, you can protect all of the equity in your car, using the Nevada motor vehicle exemption.
Personal Property
You don’t need to relinquish all of your household goods, special purchases from over the years, or family heirlooms. Below is a list of the personal property exemptions available to you in bankruptcy. Note that many categories do not have limits.
- 21.090(1)(b) – Household goods, wearing apparel, furniture, appliances, home, and yard equipment up to $12,000 in total.
- 21.090(1)(a) – All family pictures and keepsakes.
- 21.090(1)(q) – Medically-prescribed health aids.
- 21.090(1)(u) – Personal injury compensation up to $16,150.
- 21.090(1)(v) – Wrongful death awards for survivors.
- 21.090(1)(x) – Restitution received for a criminal act.
- 21.090(1)(aa) – Earned state and federal income tax credit refunds.
- 21.090(1)(bb) – Stock in certain corporations.
- 21.100 – Metal-bearing ores, geological specimens, paleontological remains, or art curiosities (must be arranged, classified, cataloged, and numbered in reference books). Coin collections are not exempt.
- 645B.180 – Mortgage impound accounts.
- 689.700; 21.090(1)(ff) – Funeral service contract money and burial plot purchase money held in trust.
- 21.090(1)(a) – $5,000 of equity in books, art, musical instruments, and jewelry.
- 21.090(w) – Future earnings compensation to the extent necessary for support.
Public Benefits
This category allows for the individual(s) filing for bankruptcy to keep certain public benefits including:
- Aid to blind, aged, disabled, and public assistance. Nev. Rev. Stat. § § 422.291; 21.090(1)(kk); 422A.325; 615.270
- Worker’s compensation (industrial insurance). Nev. Rev. Stat. § § 616C.205; 21.090(1)(gg)
- Payments received under the Social Security Act. Nev. Rev. Stat. § § 21.090(1)(y)
- Public assistance for children. Nev. Rev. Stat. § 21.090(1)(ll)
- Unemployment compensation. Nev. Rev. Stat. § 612.710; 21.090(1)(hh)
- Vocational rehabilitation benefits. Nev. Rev. Stat. § § 615.270; 21.090(1)(jj)
- Public employees’ retirement benefits. Nev. Rev. Stat. § § 286.670; 21.090(1)(ii)
- ERISA-qualified pension or stock bonus plan (up to $1,000,000). Nev. Rev. Stat. § 21.090(1)(r)
- Qualified retirement accounts are exempt under federal law 11 U.S.C. § 522(b)(3)(C)
Tools of Your Trade
If there are certain supplies, tools, or vehicles, necessary for your employment, those may also be exempt under Nevada state law. These include:
- Up to $4,500 of equity in farm trucks, tools, stock, equipment, and seed. Nev. Rev. Stat. § 21.090(1)(c)
- Up to $4,500 of equity in a miner or prospector’s dwelling, working mining claim, cars, tools, and appliances. Nev. Rev. Stat. § 21.090(1)(e)
- Arms, uniforms, and accouterments that you are required to keep. Nev. Rev. Stat. § 21.090(1)(i)
- Up to $10,000 in equity in library equipment, tools, inventory, and supplies. Nev. Rev. Stat. § 21.090(1)(d)
Wildcard
Up to $10,000 of any personal property. Nev. Rev. Stat. § 21.090(z). To note, this category can also be “spilled over” to add to the limit of another category. For example, if your car’s equity is over the exemption limit in the personal vehicle category, you can add your wildcard exemption in order to protect the value of your car.
Insurance
- 21.090(1)(k) – Life insurance policy or proceeds.
- 687B.260 – Life insurance proceeds if you are not insured.
- 687B.270 – Health insurance proceeds or avails.
- 687B.280 – Group life or health policy or proceeds.
- 687B.290 – Annuity contract proceeds.
- 695A.220 – Fraternal benefit society benefits.
- 21.090(1)(ee) – Private disability insurance proceeds.
Other
- 21.090(1)(n) – Security deposits on a rental residence. However, a landlord can still enforce the terms of the lease or rental agreement.
- 21.090(1)(s) and (t) – Alimony and child support (if ordered by a court).
- 87.250(2c) – Particular business partnership property.
As always, it is best to speak with a trusted and experienced bankruptcy attorney about your particular case, and to ensure that you properly apply for and receive all the possible exemptions available to you.