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When Bankruptcy Makes "Cents"

Many of us fall on financial hard times, whether because of regrettable past decisions or reasons beyond our control. We yearn for a fresh start. Sometimes bankruptcy may actually be the best solution. It has the ability to permanently erase many kinds of debt, ward off pesky creditors, stop wage garnishment, and otherwise get you back on track financially. Although some stigmatize bankruptcy and refuse to even consider it as an option, it is a legitimate means to start over for those in financial turmoil who can’t seem to turn things around.

Among the various options, Chapter 7 bankruptcy is often the best choice for individuals who struggle under the heavy weight of consumer debt. Chapter 7 is also known as liquidation bankruptcy because a court-appointed trustee reviews your assets and liabilities, then sells non-exempt assets in an effort to satisfy creditors. This process typically takes about 3 to 6 months.

Although the idea of someone confiscating your assets, selling them, and distributing the proceeds to your creditors may sound frightening, many are surprised to learn that in Chapter 7 bankruptcy they can generally keep most, if not all, of their assets. That’s in part because of Nevada’s generous exemptions laws. For example, the following assets are usually protected from creditor collection: (1) home equity up to $550,000; (2) certain retirement accounts up to $500,000 in value; (3) one vehicle per individual with equity up to $15,000; (4) household goods up to $12,000; (5) art, musical instruments, and jewelry up to $5,000; (6) one firearm; and more. Unfortunately, while battling to stay afloat, too many wait to file bankruptcy until they have already exhausted otherwise protected assets.

So if you’re in dire straits financially, don’t forget to consider bankruptcy as a viable option. It can provide much-needed relief to struggling individuals and families. However, as with any legal matter, it’s important to first understand the process and how it will affect your personal situation. Consulting with an experienced attorney can help. Rod Woodbury is the managing shareholder of Woodbury Law and can be reached at (702) 933-0777 or

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