Most people who call us about bankruptcy are bracing for the same answer: that they’re about to lose everything they own. That’s almost never how it plays out. Nevada has some of the most generous debtor protections in the country, and for a lot of Las Vegas families, Chapter 7 is less a last resort than a reset button.
Here’s an honest look at how Chapter 7 works in Nevada, what you get to keep, and when a different chapter might make more sense.
What Chapter 7 actually does
Chapter 7 is sometimes called “liquidation” bankruptcy, which sounds scarier than it is. For most filers, nothing gets liquidated at all. What it does is wipe out — discharge — most unsecured debt: credit cards, medical bills, personal loans, and similar obligations. Start to finish, a typical Chapter 7 case runs about three to four months.
To qualify, you have to pass the means test. In short: if your household income is below Nevada’s median for your family size, you’re generally eligible. If it’s above, there’s a second calculation based on your disposable income after allowed expenses. It’s more nuanced than it sounds, and it’s one of the first things we’ll look at with you.
One thing that surprises people: Nevada has opted out of the federal exemption list. That means Nevada residents use Nevada’s exemptions, not the federal ones — and that’s good news, because our homestead protection is hard to beat.
Nevada’s homestead exemption — protecting your house
This is the big one. Under NRS 115.010, Nevada protects up to $605,000 of equity in your primary residence. If your home has $300,000 in equity, all of it is shielded, and you keep the house through Chapter 7.
There’s a catch that trips people up, though: to claim the homestead exemption in bankruptcy, you generally need to record a homestead declaration with the county recorder before you file. It’s a simple form, but the timing matters. This is exactly the kind of detail where doing it yourself can quietly cost you.
A couple of limits to know: the protection applies to your primary residence only — not investment properties or vacation homes — and spouses can’t stack it to double the amount.
Other Nevada exemptions
The homestead isn’t the only protection. Nevada also shields, among other things:
- Vehicle: up to $15,000 of equity in one vehicle (unlimited if it’s equipped for a person with a disability), under NRS 21.090(1)(f)
- Retirement accounts: most 401(k), IRA, and pension funds are protected
- Household goods: up to $12,000 in furniture, appliances, and similar items
- Tools of the trade: up to $4,500 in equipment you use for work
- Wildcard: up to $10,000 in any personal property you choose
- Wages: 75% of your disposable weekly earnings
Between these, the vast majority of our Chapter 7 clients keep everything they have.
When Chapter 13 is the better move
Chapter 7 isn’t right for everyone, and sometimes it’s not even the better option for people who qualify. Chapter 13 reorganizes your debt into a manageable three-to-five-year repayment plan instead of discharging it outright. It tends to make sense when:
- You’re behind on your mortgage and want to stop a foreclosure and catch up
- You have non-exempt assets you’d rather not risk in Chapter 7
- Your income is too high to pass the Chapter 7 means test
- You have debts that Chapter 7 can’t discharge but a repayment plan can manage
Which chapter fits comes down to your specific numbers. That’s a conversation, not a formula.
The automatic stay: relief the moment you file
The single most immediate benefit of bankruptcy is the automatic stay. The instant your petition is filed — Chapter 7 or 13 — federal law stops most collection activity in its tracks:
- Collection calls and demand letters
- Wage garnishments
- Bank levies
- Foreclosure proceedings (at least temporarily)
- Lawsuits and judgment enforcement
- Vehicle repossession
For someone drowning in creditor calls, that silence on day one is often the first full breath they’ve taken in months.
Debts Chapter 7 won’t erase
Chapter 7 clears a lot, but not everything. These generally survive a filing:
- Child support and alimony (see our family law practice for these)
- Most student loans
- Recent income tax debt
- Debts from fraud or intentional wrongdoing
- Criminal fines and restitution
- Any debt you forget to list
That last one matters — leaving a creditor off your schedules can cause real problems, which is one more reason to have someone go through it carefully with you.
How Marathon Law Group helps
Bankruptcy is one of those areas where small mistakes have outsized consequences. An error on your petition can get a case dismissed, and missing the homestead declaration deadline can cost you protection you were entitled to. We walk Las Vegas filers through every step — the means test, the paperwork, the timing — so you get the full benefit of Nevada’s exemptions and come out the other side with a genuine fresh start.
If debt has taken over, reach out for a free, confidential consultation. We’ll look at your situation honestly and tell you what your best path forward looks like.
Call (702) 522-1808. Se habla español.
Frequently asked questions
Will bankruptcy wreck my credit forever? A Chapter 7 stays on your credit report for up to 10 years, but most people see their scores start climbing within a year or two as they rebuild with secured cards and steady on-time payments.
How long does Chapter 7 take in Nevada? Usually three to four months from filing to discharge.
Can I file if I own a business in Las Vegas? Yes. Business owners can file personal Chapter 7. How your business debts are treated depends on how the business is structured — we can walk you through it.
This article is general information about bankruptcy and Nevada law, not legal advice. Talk to an attorney about your specific circumstances.