Can You Keep Your House If You File Chapter 7 Bankruptcy in Las Vegas?
One of the most common questions Las Vegas residents ask when considering Chapter 7 bankruptcy is: “Will I lose my home?” The answer depends on how much equity you have in your home and how it compares to Nevada’s homestead exemption. The good news for many Nevada homeowners is that the state offers one of the most generous homestead exemptions in the country — protecting up to $605,000 of home equity from creditors in a bankruptcy proceeding. Understanding how this exemption works is critical before you file, and our Las Vegas bankruptcy attorneys can walk you through your specific situation.
Nevada’s Homestead Exemption — How Courts Apply It
Nevada’s homestead exemption, codified under NRS 115.010, protects up to $605,000 of equity in a primary residence from judgment creditors and from the bankruptcy trustee in a Chapter 7 case. This is the equity value — not the total value of the home. Equity is calculated as the fair market value of the home minus the outstanding balance on the mortgage and any other liens secured by the property.
For the exemption to apply, the home must be your primary residence. Investment properties, vacation homes, and rental properties do not qualify for the homestead exemption. You must also have the intention to occupy the home as your primary residence at the time of filing. Nevada courts have interpreted the homestead exemption broadly in favor of debtors, making it a powerful tool for Las Vegas homeowners navigating bankruptcy.
An important nuance: the homestead exemption protects your equity from the bankruptcy trustee, but it does not eliminate your mortgage obligation. If you are behind on your mortgage when you file Chapter 7, the lender retains the right to foreclose even after your Chapter 7 discharge. Chapter 7 will discharge your personal liability for the mortgage debt, but if you want to keep the home, you must continue making payments and either reaffirm the mortgage or be current on payments.
A common misconception is that Nevada’s $605,000 homestead exemption means you can have up to $605,000 in equity and keep your home with no concerns. While this is generally true in Chapter 7, it is worth noting that the exemption applies to the net equity — and home values can fluctuate. If your home appreciates significantly before your case is closed, the trustee might revisit whether there is non-exempt equity available. Having an attorney monitor your case and advise on timing is important.
Practical Examples — Las Vegas Homeowners in Chapter 7
Consider a Henderson homeowner with a home currently worth $550,000 and a remaining mortgage balance of $420,000. Their equity is $130,000 — well within Nevada’s $605,000 homestead exemption. This homeowner can file Chapter 7 bankruptcy without any risk of the trustee selling their home, as long as they continue making mortgage payments and the mortgage lender does not initiate foreclosure independently.
Now consider a Las Vegas homeowner in Summerlin with a home worth $800,000 and a mortgage balance of $150,000. Their equity is $650,000 — which exceeds Nevada’s $605,000 homestead exemption by $45,000. In this case, the bankruptcy trustee could potentially sell the home, pay off the mortgage, pay the homeowner $605,000 (the exempt equity), and distribute the remaining $45,000 to creditors. This homeowner needs to carefully consider whether Chapter 7 is the right choice, or whether Chapter 13 (which doesn’t involve liquidation of assets) would better serve their interests.
A third common scenario involves a Las Vegas homeowner who is behind on mortgage payments and facing foreclosure. Chapter 7 will discharge the homeowner’s personal liability for the mortgage debt, but it will not stop the foreclosure unless the homeowner can become current. If catching up on arrears is the goal, Chapter 13 — which allows a three-to-five-year repayment plan to cure mortgage arrears — is typically the better option.
What Marathon Law Group Does for Las Vegas Bankruptcy Clients
Marathon Law Group brings 45 years of combined legal experience to bankruptcy matters in Las Vegas and throughout Clark County. Before recommending Chapter 7 or Chapter 13, we analyze your complete financial picture — including your home equity, all other assets, your debts, your income, and your long-term financial goals. We provide honest, practical advice about which option best serves your interests, not just the option that results in the quickest case closure.
We handle the entire bankruptcy process — from means test analysis and exemption planning through the filing, creditor meeting, and discharge. We are familiar with the U.S. Bankruptcy Court for the District of Nevada and the Las Vegas trustees, and our clients receive direct attorney access throughout the process. We also advise on steps to take before filing to maximize the protection of your assets under Nevada’s exemption laws.
Frequently Asked Questions — Chapter 7 and Las Vegas Homes
What if I am behind on my mortgage when I file Chapter 7? Chapter 7 will discharge your personal liability for the mortgage debt, but it will not stop a foreclosure if the lender initiates one. If catching up on mortgage arrears to save your home is the priority, Chapter 13 is typically the better choice.
Do I need to file a homestead declaration in Nevada? While some states require a formal recorded homestead declaration, Nevada’s homestead exemption applies automatically to a primary residence in most bankruptcy cases. However, there are specific circumstances where a recorded declaration provides additional protection. An attorney can advise whether recording one is beneficial in your situation.
Can I keep my home if I reaffirm my mortgage in Chapter 7? Yes. Reaffirming a mortgage means you voluntarily agree to remain personally liable for the debt after bankruptcy discharge, in exchange for keeping the property. This can be a reasonable choice if you can afford the payments and want to keep the home, but it carries risks if your financial situation worsens later.
Free Bankruptcy Consultation — Las Vegas
If you are a Las Vegas homeowner considering bankruptcy and want to understand your options for keeping your home, contact Marathon Law Group for a free consultation. Call (702) 522-1808 or contact us online. We serve clients in Las Vegas, Henderson, Summerlin, North Las Vegas, and all of Clark County. We also handle personal injury and family law matters. Se habla español.