Nevada Chapter 7 Bankruptcy: Eligibility, Exemptions & What It Wipes Out (2026)

By John Quigley · NevadaAttorneyFinder.com · Updated May 18, 2026

This article is for informational purposes only and does not constitute legal advice. NevadaAttorneyFinder is a directory, not a law firm.

Chapter 7 bankruptcy is the federal "liquidation" option — but for a typical Las Vegas household, the more accurate description is a 100-day legal reset that erases credit-card balances, medical bills, payday loans, and old judgment debt while preserving the family home, a working vehicle, retirement accounts, and the tools the filer uses to earn a living. Nevada is one of the best states in the country in which to file Chapter 7 because of its unusually generous state-law exemptions — including a homestead exemption of up to $605,000 in equity under NRS 115.010 — and because Nevada filers use the state exemption scheme rather than the lower federal alternatives. This guide walks through the means-test eligibility analysis under 11 U.S.C. § 707(b), Nevada's exemption stack under NRS 21.090, exactly which debts get wiped out and which survive under 11 U.S.C. § 523, the automatic stay, the 341 meeting of creditors, the role of the Chapter 7 trustee, the discharge timeline, and what an experienced Las Vegas bankruptcy attorney looks for when reviewing a case for filing.

What Chapter 7 Actually Is

Chapter 7 is a federal proceeding governed by Title 11 of the United States Code (the Bankruptcy Code) and conducted in U.S. Bankruptcy Court — for Las Vegas–area filers, that is the United States Bankruptcy Court for the District of Nevada, Foley Federal Building at 300 Las Vegas Boulevard South. The case is filed under Chapter 7 of the Bankruptcy Code (11 U.S.C. §§ 701–784). The filer is called the "debtor"; the people the debtor owes money to are "creditors"; an appointed individual called the "Chapter 7 trustee" administers the case on behalf of the creditors.

The theoretical structure of a Chapter 7 case is that the debtor surrenders all non-exempt assets to the trustee, the trustee sells those assets and distributes the proceeds to creditors, and the debtor receives a discharge order wiping out personal liability for the remaining unsecured debt. In practice, the overwhelming majority of consumer Chapter 7 cases filed in Nevada are no-asset cases — every asset the debtor owns is fully exempt under NRS 21.090, the trustee has nothing to liquidate, and the filer keeps everything while still receiving a full discharge. The trustee earns a flat fee for administering the case from the filing fee, files a no-asset report, and the case closes.

The Means Test — Who Qualifies to File Chapter 7

Before the 2005 BAPCPA amendments, any individual could file Chapter 7 without an income test. Since 2005, a filer with primarily consumer debts must pass the means test under 11 U.S.C. § 707(b). The test runs in two parts.

Part 1 — the median income comparison. The filer computes the average gross household income for the six full calendar months ending immediately before the filing month. That figure is annualized and compared to the Nevada median family income for a household of the same size, as published quarterly by the U.S. Trustee Program. If the annualized income is at or below the Nevada median, the filer passes the means test and goes straight to filing. As of 2026, the Nevada median figures (rounded) are approximately $61,000 for a household of one, $77,000 for a household of two, $86,000 for three, and $99,000 for four, with $9,900 added per person beyond four. (The exact current numbers should be confirmed against the U.S. Trustee Program's published Census-derived figures on the filing date.)

Part 2 — the expense test. A filer over the Nevada median is not disqualified — but must complete the long-form Means Test (Official Form 122A-2), which subtracts allowed living expenses (IRS National and Local Standards for food, housing, transportation, etc., plus actual amounts for taxes, insurance, child care, health care, and certain priority debts) from current monthly income. The remainder is "monthly disposable income." If the 60-month projection of that disposable income is below a specified threshold (currently around $9,075) or below 25% of nonpriority unsecured debt subject to a floor, the filer passes. Above that threshold, the filer's case is presumed abusive and is typically converted to Chapter 13 or dismissed.

The non-consumer-debt exception. Under 11 U.S.C. § 707(b)(1), the means test applies only to debtors whose debts are "primarily consumer debts." A filer whose debts are more than 50% non-consumer — typically a former small-business owner with personal guarantees, an investor with margin debt, or someone with a large IRS tax liability — is exempt from the means test entirely and may file Chapter 7 regardless of income.

Nevada Exemptions — Why Nevada Is a Great State to File

Under 11 U.S.C. § 522(b), states may opt out of the federal exemption scheme and require filers to use state-law exemptions. Nevada has opted out under NRS 21.090(3). Nevada exemptions are codified at NRS 21.090, supplemented by the homestead exemption at NRS 115.010 and the retirement-plan exemption at NRS 21.090(1)(r). The result is a state-law exemption stack that is dramatically more protective than the federal default for most homeowners and for many vehicle owners and retirement-account holders.

• Homestead — up to $605,000 of equity in a primary residence. NRS 115.010 protects equity in the filer's principal residence (a single-family home, condo, mobile home on land owned, or even a leased lot in some configurations) up to $605,000. A Declaration of Homestead recorded with the Clark County Recorder before filing locks in the exemption; courts have also held the exemption is automatic on the principal residence in many fact patterns. The federal cap of $214,000 under 11 U.S.C. § 522(p) applies if the property was acquired within 1,215 days before filing.
• Vehicle — $15,000 of equity per vehicle. NRS 21.090(1)(f) protects up to $15,000 of equity in one motor vehicle per debtor (so up to $30,000 in a joint case for two vehicles). The exemption is unlimited if the vehicle is equipped to provide mobility for a person with a permanent disability.
• Household goods, furniture, appliances, electronics — up to $12,000 in aggregate. NRS 21.090(1)(b) covers "household goods, furnishings, electronics, wearing apparel, other personal effects and yard equipment" up to $12,000 of total fair market value. For most filers this is more than enough to cover everything in the home; the trustee values items at garage-sale resale value, not replacement cost.
• Tools of the trade — up to $10,000. NRS 21.090(1)(d) protects up to $10,000 in tools, materials, equipment, books, and the like used in the debtor's trade or profession.
• Retirement accounts — fully exempt. NRS 21.090(1)(r) exempts present and future interests in qualified retirement plans (401(k), 403(b), traditional and Roth IRAs, pension plans, defined-benefit plans, and similar) without dollar limit. Federal law under 11 U.S.C. § 522(b)(3)(C) and (n) also independently protects most retirement accounts, with an IRA/Roth cap of approximately $1,512,350 (adjusted every three years).
• Wages — 82% protected. Under NRS 21.090(1)(g) and 31.295, 82% of the debtor's disposable earnings or 50 times the federal minimum wage, whichever is greater, is exempt from execution. In bankruptcy, this protects pre-filing wages and earned but unpaid earnings as of the petition date.
• Public benefits — fully exempt. NRS 21.090(1)(y)–(aa) and related provisions protect Social Security, SSI, SSDI, unemployment benefits, workers' compensation, veterans' benefits, and TANF.
• Life insurance — up to $15,000 of cash value. NRS 21.090(1)(k) exempts up to $15,000 of the cash surrender value of life insurance policies.
• Health aids — fully exempt. NRS 21.090(1)(p) protects all professionally prescribed health aids without a dollar cap.
• Personal injury proceeds — up to $16,150. NRS 21.090(1)(u) protects up to $16,150 of compensation for personal bodily injury (not including pain and suffering or actual pecuniary loss), payable to the debtor or a dependent.
• Wildcard — none. Nevada does not have a wildcard exemption that can be applied to any property the filer chooses. Filers who hold assets that fall outside the categorical exemptions (cash on hand beyond a small bank-account amount, cryptocurrency, jewelry beyond a small allowance, a second vehicle, a boat, a recreational vehicle, a brokerage account) may have to surrender those assets to the trustee or buy them back at fair market value.

The interaction of these exemptions is what makes Nevada filings work. A Las Vegas homeowner with $300,000 of home equity, a paid-off car worth $14,000, $50,000 in a 401(k), $8,000 in household furnishings, and $60,000 of credit-card debt walks into a Chapter 7 case keeping every one of those assets and walks out 100 days later with the credit-card debt gone.

The Automatic Stay — Immediate Relief on the Day of Filing

The moment a Chapter 7 petition is filed with the Clerk of the Bankruptcy Court, the automatic stay under 11 U.S.C. § 362 takes effect. The stay is a federal injunction — without any further court action — against virtually all collection activity against the debtor and the debtor's property. It is the single most powerful provision in the Bankruptcy Code for the debtor in distress.

The stay stops phone calls and collection letters; pending lawsuits in Nevada state courts; wage garnishments under NRS 31.249; bank-account levies and the freezing of accounts; the recording and execution of judgment liens; pending foreclosure sales (even one scheduled for the next day); pending repossessions; pending eviction actions, with a narrow exception under § 362(b)(22) for eviction proceedings where the landlord already obtained a judgment of possession before filing; and most utility shutoffs (a utility cannot disconnect for 20 days after filing under § 366). A creditor that violates the stay is liable under § 362(k) for actual damages, including emotional-distress damages, attorney's fees, and in cases of willful violation, punitive damages.

There are limited carve-outs: criminal proceedings continue, domestic-support proceedings continue (although collection from property of the estate is stayed), and certain tax-determination proceedings continue. The stay does not stop the IRS or the Nevada Department of Taxation from conducting an audit, although collection enforcement is stayed.

Step-by-Step — How a Nevada Chapter 7 Case Actually Proceeds

• Pre-filing credit counseling. Within 180 days before filing, the debtor must complete an approved credit-counseling course under 11 U.S.C. § 109(h). Most filers complete the course online; it takes about an hour and costs $10 to $40.
• Petition and schedules. The lawyer (or pro se filer) prepares the voluntary petition (Official Form 101), a list of all creditors, schedules of assets and liabilities (A/B, C, D, E/F, G, H), the Statement of Financial Affairs (Form 107), the Means Test (Form 122A-1 and 122A-2 if applicable), and a Statement of Intention for secured debts. The filing fee is $338 as of 2026 (subject to change); waiver and installment-payment options exist for low-income filers.
• Filing day. The petition is electronically filed. The automatic stay goes into effect immediately. The court assigns a case number and a Chapter 7 trustee.
• Notice to creditors. Within a few days the Bankruptcy Noticing Center mails notice of the case (including the date of the 341 meeting and the deadline for objections) to every creditor listed on the schedules.
• 341 meeting of creditors. Scheduled 21 to 40 days after filing under Fed. R. Bankr. P. 2003. In the District of Nevada, post-pandemic practice is that 341 meetings are conducted by video conference unless the trustee specifically directs an in-person appearance. The trustee places the debtor under oath and asks a fairly predictable list of questions: did you read the schedules; are they true and complete; have you ever filed bankruptcy before; do you owe domestic-support obligations; do you have a claim against anyone (lawsuit, personal-injury claim, inheritance); have you transferred any property in the last four years. Creditors may appear and ask questions but rarely do. The meeting usually lasts 5 to 10 minutes.
• 60-day objection window. Creditors have 60 days after the 341 meeting to file a complaint objecting to dischargeability of a specific debt under § 523 (typically fraud, embezzlement, willful injury) or objecting to the discharge entirely under § 727 (typically based on fraudulent transfers, concealment of assets, false oaths). The U.S. Trustee has a parallel 60-day window for any § 707(b) abuse motion.
• Financial management course. After filing but before discharge, the debtor must complete a second approved course on personal financial management under § 727(a)(11). The course is online, takes about two hours, and costs $10 to $40.
• Discharge. If no objections are filed within the 60-day window and the second course is complete, the court issues the discharge order under § 727 — typically 90 to 120 days after filing.
• Case closing. In a no-asset case the trustee files a no-distribution report and the case is closed shortly after discharge.

Secured Debts — The Mortgage, the Car Loan, and the "Statement of Intention"

Chapter 7 discharges the personal liability on debts but does not eliminate liens. A mortgage on a Las Vegas home and a Toyota Financial Services lien on a car both survive the bankruptcy unless something is done about them. The filer must declare on the Statement of Intention (Form 108) within 30 days of filing what will happen with each piece of collateral. The options under 11 U.S.C. § 521(a)(2) and § 722 are:

• Reaffirmation. The debtor signs a reaffirmation agreement keeping the debt alive after discharge in exchange for keeping the collateral. Most car lenders require reaffirmation to keep the car. Most home mortgage lenders in the District of Nevada do not — they allow the borrower to keep paying without a reaffirmation under what is informally called "ride-through," because Nevada law historically supported retaining collateral without reaffirmation so long as the loan remained current.
• Redemption. Under § 722, the debtor pays the secured creditor a lump sum equal to the present fair market value of the collateral and the lien is released. This is most often used to "buy" an underwater vehicle for what it is actually worth rather than what is owed on it.
• Surrender. The debtor turns the collateral over to the lender. The deficiency balance, if any, is discharged.

A common Las Vegas pattern: the filer has a mortgage that is current and a car loan that is upside down. The filer reaffirms or rides through the mortgage, redeems the car for its book value (say $9,500 against a $16,000 balance), and walks out with the home, the car, and no remaining loan deficiencies.

What Chapter 7 Wipes Out — Discharge Under § 727

Chapter 7's discharge under 11 U.S.C. § 727 eliminates personal liability on almost every type of unsecured consumer debt:

• Credit-card balances, including cash advances and balance transfers, subject to the presumption of fraud rules for charges within 90 days of filing.
• Medical bills — hospital, surgeon, ambulance, anesthesia, physical therapy, dental, pharmacy.
• Personal loans from banks, credit unions, online lenders.
• Payday loans and title loans (the personal liability is wiped; on a title loan the lien survives if there is one).
• Deficiency balances on repossessed vehicles and surrendered homes.
• Old utility bills, gym memberships, cell-phone contract early-termination fees.
• Most civil judgments arising from consumer obligations or simple negligence.
• Most collection-agency debts no matter how old or how recently transferred.

What Chapter 7 Does NOT Wipe Out — § 523 and § 727 Exceptions

Several categories of debt are non-dischargeable under 11 U.S.C. § 523 either automatically or upon a creditor's timely objection:

• Most student loans. Federal student loans, federally guaranteed private student loans, and most private "qualified education loans" survive discharge under § 523(a)(8) unless the debtor files an adversary proceeding and proves "undue hardship" under the Brunner test (or the Ninth Circuit's variation thereof). The 2022 Department of Education / DOJ guidance has made undue-hardship discharges meaningfully more accessible than they were a decade ago, but the proceeding is still its own mini-trial.
• Domestic support obligations. Child support and alimony are non-dischargeable under § 523(a)(5). Property division obligations to a former spouse arising in a divorce decree are non-dischargeable under § 523(a)(15) in Chapter 7.
• Recent taxes. Federal income taxes and Nevada state taxes are dischargeable only if the return was due more than 3 years before filing, the return was actually filed more than 2 years before filing, any assessment was made more than 240 days before filing, and the return was not fraudulent. Payroll taxes (the trust-fund portion), most sales taxes, and certain excise taxes are never dischargeable. Property taxes assessed within one year before filing are non-dischargeable.
• Criminal restitution, fines, and traffic offenses. Criminal restitution orders under § 523(a)(7) and (a)(13) survive, as do most fines payable to government entities and most traffic-related judgments.
• Fraud, false pretenses, and false financial statements. Debts obtained by fraud (false statements about financial condition made in writing, embezzlement, larceny, or fraud as a fiduciary) are non-dischargeable under § 523(a)(2), (4) upon a timely-filed adversary complaint by the creditor.
• Willful and malicious injury. Debts for willful and malicious injury to another or to property survive under § 523(a)(6). DUI judgments where death or personal injury resulted are specifically carved out under § 523(a)(9).
• Debts not listed. In a no-asset case, an unlisted debt may be discharged anyway if the creditor had notice of the case. In an asset case, an unlisted debt may survive under § 523(a)(3).
• Penalty for failure to file taxes. Tax penalties on non-dischargeable taxes survive; penalties on dischargeable taxes are dischargeable if more than 3 years old.

Common Mistakes That Sink a Nevada Chapter 7

• Transfers within four years before filing. Under § 548 and Nevada's Uniform Voidable Transactions Act (NRS Chapter 112), the trustee can claw back property transferred to family members, friends, or business partners within 4 years of filing for less than reasonably equivalent value. Paying off a "preferred" creditor (e.g., a $5,000 transfer to a parent within 1 year of filing) creates a preference under § 547 and can also be undone.
• Cash-advance and luxury-goods runups. Under § 523(a)(2)(C), consumer debts owed to a single creditor for "luxury goods or services" totaling more than $800 incurred within 90 days of filing are presumed non-dischargeable. Cash advances above $1,100 from a single creditor within 70 days are subject to the same presumption.
• Inheritance within 180 days after filing. Under § 541(a)(5), property the debtor becomes entitled to receive by inheritance, divorce settlement, or life-insurance proceeds within 180 days after filing is property of the estate. Filers who know an inheritance is coming should plan around that window with counsel.
• Recent move into Nevada to grab the homestead exemption. Under § 522(b)(3)(A), to use Nevada exemptions the debtor must have lived in Nevada for the full 730 days before filing (or for the greater part of the 180-day period before that 730-day period). Filers who moved to Nevada within 2 years of filing may be forced to use their prior state's exemptions or the federal exemptions.
• Undisclosed assets. The single fastest way to lose a discharge is to omit a checking account, a cryptocurrency wallet, a pending personal-injury lawsuit, or an interest in an LLC. Section 727(a)(4) authorizes denial of discharge for a false oath; § 727(a)(2) authorizes denial for concealing assets within 1 year before filing.

What Happens After Discharge

Once the discharge order issues, the listed unsecured debts are gone — permanently — and any post-discharge collection attempt is a violation of the discharge injunction under § 524, sanctionable by the bankruptcy court. The filer is free to begin rebuilding credit. Typical post-discharge trajectory for a Nevada filer: secured credit card available within 60 to 90 days; auto financing at higher-than-market rates available within 6 to 12 months; FHA mortgage eligibility 2 years post-discharge; conventional mortgage 4 years post-discharge; conforming pricing within roughly 4 to 7 years as the bankruptcy ages off the credit report (10 years for Chapter 7 under the Fair Credit Reporting Act).

Nevada's homestead exemption survives discharge, so a homeowner who came through bankruptcy with the house intact is in the same protective posture against future judgment creditors that any Nevada homeowner enjoys. If post-bankruptcy unsecured debt accumulates, the homestead under NRS 115.010 still shields up to $605,000 of equity from judgment execution under NRS Chapter 21 — a meaningful long-term planning advantage.

Chapter 7 vs. Chapter 13 — When the Other Chapter Is the Right Fit

Chapter 7 is the right tool when the filer's income is at or below the Nevada median, the filer's debts are mostly unsecured, the filer wants the fastest possible discharge, and the filer's assets fit within the NRS 21.090 exemption stack. Chapter 13 — the "reorganization" or "wage-earner plan" chapter — is the better tool when the filer has substantial non-exempt assets to protect (a second home, a recently purchased home outside the federal § 522(p) cap, a vacation property), when the filer is behind on a mortgage and needs to cure the arrears over time, when the filer fails the means test, or when the filer has significant non-dischargeable debts (recent taxes, child-support arrears) that can be paid over a 3-to-5-year plan. A good Las Vegas bankruptcy attorney runs both analyses before recommending one.

Frequently Asked Questions