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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am a resident of Nevada. My income is over the means level&quo

Resolved Question:

I am a resident of Nevada. My income is over the "means level" and because of that I do not qualify for a Chapter 7 Bankruptcy in Nevada. However, I have heard that because I have a rental property (second home) in California that loses money each month and that property is worth $106,000 and that I owe $240,000 I can still file for a chapter 7 BK in Nevada...and discharge my debts (plus credit card debt and timeshares owed) and this property...and still retain my equity in my current home in Nevada (valued at $150,000, owe $50,000). Please respond only if you can quote me the Nevada law that will allow this BK filing (waiver?) because of the rental property situation. Thanks!
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,
For the Means Test, you are allowed to deduct from your gross income the monthly payments you make for secured debts - including the mortgage on your rental property. If after deducting all your allowable expenses - including your secured debts - there is less than $117 per month left over, you can then file a Chapter 7. If the amount left over is more than $117, but less then $195, you may be able to file a Chapter 7 (there is additional information required for this).

If you are able to pass the Means Test, you would be able to file a Chapter 7, have your unsecured debts discharged, and you would be able to keep your primary residence in Nevada (because it has less then $550,000 equity).

I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 5 years ago.
What are "secured debts"...are those only First or Second home loans or Mortgages? I understand that I can deduct the mortgage on the rental property----but what about my second mortgage (HELOC), HOA fees and property taxes on the rental. How would I compute income or loss from the rental if the above are not deducted. Would not any income or loss be counted toward my gross monthly income? Thanks!
Expert:  cfortunato replied 5 years ago.

All mortgages and HELOC's are secured debts. Car loans are also secured debts.

The HOA dues and property taxes on the rental property can be deducted from your rental income. However, if the result is less than zero, you cannot enter a loss.

Customer: replied 5 years ago.

Thank you for your help. As I originally requested, please provide the Nevada laws or statues pertaining to filing a BK using the premise (rental scenario) that we have discussed. I would like to be able to review this exception to not qualifying under the regular means test, and still qualifying using the rental property scenario. Thank you again for your quick reply.


Expert:  cfortunato replied 5 years ago.

The only statutes Nevada has that relate to Bankruptcy are the exemptions, which are here:

The Bankruptcy Means Test is here:

The deduction for secured loan payments is on Page 7.



cfortunato and other Bankruptcy Law Specialists are ready to help you
Expert:  cfortunato replied 5 years ago.
Hi again,
Please let me know if you have any further questions.
If not, please don't forget to hit the "ACCEPT" button.
Thank you!