What Is Chapter 13 Bankruptcy in Nevada and Who Should File
Key Takeaways
- Chapter 13 bankruptcy is a federal repayment plan that lets people with steady income pay off debt over three to five years while keeping their home and assets.
- In Nevada, filers work through either the Las Vegas or Reno division of the U.S. Bankruptcy Court for the District of Nevada.
- Once you complete the plan, the court may discharge remaining eligible unsecured debts.
Chapter 13 bankruptcy is a federal court process that lets Nevada residents with regular income repay their debt over three to five years while keeping their home and property.
When you have missed several payments and are afraid of losing your home, aggressive collection calls only make things worse. Filing for Chapter 13 in Nevada typically puts an immediate legal hold on most collection calls, wage garnishments, and foreclosure proceedings while your case is active.
What is Chapter 13 Bankruptcy
Chapter 13 lets people with steady income repay their debts over time. Courts also call it a wage earner's plan. Unlike Chapter 7, you keep your property. Instead, you follow a court-approved repayment plan that typically runs three to five years.
Example Scenario
A homeowner misses mortgage payments after a sudden medical emergency. They return to work with steady income but cannot pay all the missed payments at once, and the bank threatens foreclosure. Filing Chapter 13 may be one way to save the property.
The homeowner files a petition and repayment plan. The judge reviews the case and approves a five-year plan. A trustee is assigned to manage payments. Each month, one payment goes to the trustee, who splits it between the mortgage lender and other creditors. After five years, the homeowner is current on the mortgage. The court may then discharge remaining eligible unsecured debts such as medical bills and credit card balances.
How Chapter 13 Bankruptcy Works
When you file, you submit a proposed repayment plan to the bankruptcy court. The plan sets out how you will pay your debts over three to five years. The court uses your income, living expenses, and total debt to set the monthly payment amount and how long the plan runs.
A court-appointed trustee oversees your case. You make one monthly payment to the trustee, and they distribute it to your creditors. Unlike Chapter 7, you keep your property throughout the process. When you complete all plan payments, the court can discharge remaining eligible unsecured debts.
How to File for Chapter 13 Bankruptcy Step by Step
Filing for Chapter 13 involves a nine-step legal process.
- Pre-filing credit counseling: Take an approved credit counseling course within 180 days before filing. The course typically takes 60 to 90 minutes through a nonprofit agency approved by the U.S. Trustee Program.
- Gather documents: Collect your tax returns for the past four years, recent pay stubs, bank statements, and a complete list of all debts and living expenses. Organizing these before meeting with an attorney can save time during consultations.
- File petition and schedules: File your bankruptcy petition, financial schedules, and means test results with the U.S. Bankruptcy Court for the District of Nevada. Your case goes to either the Las Vegas or Reno division, depending on where you live.
- Submit repayment plan: You have up to 14 days after filing to submit your proposed three-to-five-year repayment plan.
- Automatic stay takes effect: Filing immediately stops most creditor collection actions, including home foreclosures and wage garnishments.
- 341 meeting of creditors: You must attend a short meeting with your trustee, scheduled 21 to 40 days after you file under 11 U.S.C. § 341. The trustee will ask basic questions about your income, debts, and documents. Most creditors do not show up.
- Confirmation hearing: A judge reviews and approves your repayment plan. Once confirmed, your plan is legally binding.
- Monthly plan payments: You send regular monthly payments to the bankruptcy trustee for the full plan term.
- Pre-discharge debtor education: After finishing your payments, you must complete a financial management course before the court grants your final debt discharge. This is separate from the pre-filing credit counseling requirement.
How the Means Test Works for Chapter 13 Bankruptcy
Both Chapter 7 and Chapter 13 require a means test. The court uses the results differently for each chapter.
In Chapter 7, the means test checks whether you can file at all. It looks at your income to see if you qualify for quick debt discharge. If your income is too high, the court raises a presumption of abuse under 11 U.S.C. § 707(b). The court presumes you can repay some debt. You can challenge that presumption by showing special circumstances, such as a serious medical condition.
In Chapter 13, the means test does not determine eligibility. Instead, it sets the terms of your repayment plan under 11 U.S.C. § 1325(b). The test calculates how much money you have left each month after allowed expenses. This becomes your monthly plan payment. If your income is above your state's median, you will follow a five-year plan. If it falls below the median, your plan will typically run for 3 years.
Chapter 7 uses the test to determine whether you qualify to file, while Chapter 13 uses it to determine how much you will pay and for how long.
Eligibility for Chapter 13 Bankruptcy
You must meet four requirements to file for Chapter 13.
- Pre-filing credit counseling: You must complete an approved credit counseling course within 180 days before filing under 11 U.S.C. § 109(h). If you have a qualifying disability or face urgent circumstances, the court may waive this requirement. Contact a bankruptcy attorney to confirm if your situation qualifies.
- Individual or married couple only: Corporations and LLCs cannot file under Chapter 13. This also covers self-employed individuals and those running an unincorporated business.
- Debt limits: Your debts must fall below two separate federal limits. As of the latest adjustments, your unsecured debts (like credit cards and medical bills) must be less than $526,700, and your secured debts (like mortgages and car loans) must be less than $1,580,125. You cannot file if your debts exceed either of these limits.
- Current tax filings: You must have filed your federal and state tax returns for the past four years before you file under 11 U.S.C. § 1308.
Pros and Cons of Chapter 13 Bankruptcy
| Pros | Cons |
|---|---|
| Puts an immediate legal hold on foreclosure proceedings, giving you time to catch up on missed mortgage payments through your court-approved plan. | For the full length of your repayment plan, you must follow a court-approved budget, which limits your spending and financial flexibility. |
| You keep your home, car, and other property. | Missing payments can lead to case dismissal or conversion to Chapter 7. |
| Make a single monthly payment to the court-appointed trustee, who distributes it to creditors for you. | Certain debts such as recent tax debts and child support cannot be discharged, so you will still owe them after your plan ends. |
| The co-debtor stay generally prevents creditors from going after co-signers on your personal debts while your plan is active, unless a creditor successfully petitions the court to lift the stay under 11 U.S.C. § 1301(c). | The filing stays on your credit report for up to 10 years under the Fair Credit Reporting Act (FCRA), though the major credit bureaus typically remove a completed Chapter 13 case after 7 years from the filing date. |
| Once the court approves your plan, the trustee handles all payments to creditors on your behalf. |
Note on daily life: A Chapter 13 plan runs three to five years and requires you to follow a court-approved budget the entire time. You can still cover necessary living expenses and take a vacation if your plan is current. Major purchases like a new car typically require trustee approval. Missing one payment does not automatically end your case. Contact your trustee immediately to request a plan modification or discuss catching up.
Not sure if Chapter 13 is right for you? Call (800) 332-8913 or request a free consultation today.
Which Debts Chapter 13 Discharges and Which Remain
At the end of your Chapter 13 repayment plan, bankruptcy law treats different debts in different ways.
Dischargeable Debts
Under 11 U.S.C. § 1328, the court will discharge any remaining balance on eligible unsecured debts once you complete your plan. Common dischargeable debts include credit card balances, medical bills, personal loans, and older qualifying income tax debts. Once discharged, you no longer owe them.
Non-Dischargeable Debts
Certain obligations cannot be erased in bankruptcy. Under 11 U.S.C. § 523, you will still owe these debts after your case closes. Non-dischargeable debts generally include recent tax debts, child support, alimony, most student loans, criminal fines, and debts caused by fraud.
Priority Debts
Chapter 13 requires you to pay priority debts in full through your repayment plan. These include obligations such as child support and recent taxes. By the time your plan ends, all priority debts will be paid off.
Filing Chapter 13 Bankruptcy in Nevada
Filing in Nevada means following federal rules while using specific state guidelines.
Nevada Median Income Thresholds
Your income determines the length of your plan. The court compares your earnings to the Nevada median income. According to U.S. Trustee Program data updated in May 2025, the median income is $67,756 for a single earner and $83,923 for a two-person household. If you earn below the median, your plan is usually three years. If you earn more, it lasts five years.
Nevada Bankruptcy Court Divisions
Your case goes through the U.S. Bankruptcy Court for the District of Nevada (nvb.uscourts.gov). Depending on where you live, you will file in either the Las Vegas or Reno division.
Nevada Bankruptcy Exemptions
Nevada requires filers to use state-specific exemptions. These protect your property during bankruptcy. The table below covers the main exemptions available to Nevada filers.
| Exemption | Protected Amount | Notes |
|---|---|---|
| Homestead | Up to $605,000 in equity | Primary residence only. Must file a homestead declaration before filing bankruptcy. |
| Motor Vehicle | Up to $15,000 in equity | One vehicle per filer. |
| Household Goods | Up to $12,000 | Covers furniture, electronics, clothing, and appliances. |
| Books, Art, Musical Instruments | Up to $5,000 | Personal property of this type. |
| Wildcard | Up to $10,000 | Any miscellaneous personal property not otherwise exempt (NRS 21.090(1)(z)). |
| Earned Wages | 75% of disposable earnings | Protects the majority of your take-home pay. |
| Social Security and Government Benefits | Full amount | Includes unemployment compensation and public pensions. |
| ERISA-Qualified Pension | Up to $1,000,000 | Covers 401(k) and similar qualified retirement accounts. |
Nevada Mortgage Modification Mediation Program
The U.S. Bankruptcy Court for the District of Nevada offers a Mortgage Modification Mediation (MMM) Program. This allows Chapter 13 filers to negotiate a loan modification with their mortgage lender directly through the bankruptcy process. If your goal is to keep your home, this program may provide a path to reduce your payment or restructure your loan terms. Details and enrollment forms are available at nvb.uscourts.gov.
Car Cramdown in Nevada Chapter 13
If you owe more on a vehicle than it is worth and you have had the loan for more than 910 days before filing, Chapter 13 may allow a cramdown. This means you pay only the car's current fair market value through your plan, not the full loan balance. The interest rate may also be adjusted. This can significantly reduce the total amount you pay for the vehicle over the life of the plan.
What Does Chapter 13 Cost in Nevada
Understanding the costs upfront helps you plan before you file.
| Cost Item | Amount | Notes |
|---|---|---|
| Court Filing Fee | $313 | Set by the U.S. Bankruptcy Court, District of Nevada. Can be paid in installments if you cannot afford it upfront. |
| Attorney Fees | $2,800 to $4,500 | Varies by location and case complexity. Las Vegas tends toward $3,000 to $4,500; Reno toward $2,800 to $4,200. Most fees are built into your plan payments, so you do not need to pay everything upfront. Nevada courts cap flat fee amounts. |
| Trustee Fee | Up to 10% of plan payments | Paid as a percentage of your monthly plan payment. The trustee takes this fee before distributing funds to creditors. |
| Pre-Filing Credit Counseling | $10 to $50 | Must be from a U.S. Trustee Program-approved agency. Fee waivers available for low-income filers. |
| Debtor Education Course | $10 to $50 | Required before discharge. Some agencies offer both courses at a discount. |
Attorney fee data is based on typical Nevada ranges as of 2025 to 2026. Actual fees vary by attorney, case complexity, and location. Most Chapter 13 attorney fees are paid through your repayment plan, not upfront, making bankruptcy more accessible when cash is tight.
Chapter 13 vs Other Debt Relief Options
When you owe a large amount and do not know what to do next, it helps to compare your choices side by side.
| Feature | Chapter 13 | Chapter 7 | Debt Management Plan |
|---|---|---|---|
| How It Works | Repay debt over 3 to 5 years. | Eliminate debt fast; possible asset sale. | Consolidate debt into one monthly payment. |
| Asset Protection | Keep your property and catch up on arrears. | Non-exempt assets may be liquidated. | No risk to personal assets. |
| Legal Status | Court-ordered, legally binding. | Court-ordered, legally binding. | Voluntary agreement via credit counselor. |
| Credit Impact | Up to 10 years on credit report by law; bureaus often remove a completed case after 7 years from filing date. | Stays on credit report for 10 years. | Less severe; not a bankruptcy. |
| Best For | Homeowners behind on mortgage; people with regular income who want to keep property. | Low income; mostly unsecured debt; no significant assets to protect. | Steady income; want to avoid bankruptcy; primarily unsecured debt. |
When Chapter 13 Makes Sense
- You earn a regular income that allows you to commit to a structured three-to-five-year repayment plan.
- Your household income exceeds your state's median, meaning you do not pass the Chapter 7 means test.
- You own valuable non-exempt property that you want to protect from liquidation.
- You are behind on your mortgage and want to catch up on past-due payments to avoid losing your home.
- You need to reorganize payments for difficult obligations such as high-interest car loans or debts with negative equity.
- Your debts include divorce property settlements or other court-ordered obligations that require a structured repayment plan.
Not sure if Chapter 13 is right for you? Call (800) 332-8913 or request a free consultation today.
Is Chapter 13 Bankruptcy Right for You
For individuals with a steady income, Chapter 13 provides a clear, court-approved path to repay debt without losing your home. After you complete the repayment plan, you will have paid off all priority debts and cleared most unsecured balances. If the court grants discharge, you will have less unsecured debt and more flexibility in your monthly budget. Creditors are permanently stopped from contacting you about accounts that were discharged.
Frequently Asked Questions
You may not qualify if your secured or unsecured debts exceed the federal Chapter 13 limits, or if you lack a stable income to fund a repayment plan. Courts can also dismiss your case if you fail to file taxes, miss required documents, or skip mandatory credit counseling.
The monthly payment depends on your disposable income, living expenses, and the type and amount of debt you owe. The court and trustee set the final amount based on state-allowed expenses and your repayment plan terms.
You must follow a strict three-to-five-year repayment plan that limits your spending and financial flexibility. The filing also stays on your credit report for up to 10 years under the Fair Credit Reporting Act, though bureaus typically remove a completed Chapter 13 case after 7 years from the filing date.
You can cover necessary living expenses while following your court-approved budget. Any new debt or large purchases require court or trustee approval during the plan.
Priority debts like taxes and child support must be paid in full through the plan. You may pay only a portion of unsecured debts, and the court can discharge the remaining balance after you complete the plan.
If you previously filed Chapter 7, you must wait four years before filing Chapter 13. If you previously filed Chapter 13, you must wait two years before filing again. Talk to a bankruptcy attorney before refiling to confirm no additional restrictions apply to your situation.
Disclaimer: This content is for informational purposes only and is not legal or financial advice. Bankruptcy laws vary by state; outcomes depend on individual circumstances. Consult a qualified attorney before making any decisions.
About The Author
Loretta Kilday, Esq., is a licensed attorney with over 40 years of experience in bankruptcy, debt collection, and family law. She holds a Juris Doctor from DePaul University College of Law and has served as a dedicated bankruptcy attorney at Urban & Burt, Ltd. Loretta has maintained a private practice focused on bankruptcy and collections since 1984 and serves as the legal spokesperson for DebtConsolidationCare.com.
Resources
- U.S. Bankruptcy Court, District of Nevada — Chapter 13 Filing Requirements: https://www.nvb.uscourts.gov/filing/filing-requirements/chapter-13/
- U.S. Trustee Program — Means Test Income Data (May 2025): https://www.justice.gov/ust/means-test-information
- Federal Register — Adjustment of Dollar Amounts in Bankruptcy (April 1, 2025): https://www.federalregister.gov/documents/2025/02/04/2025-02207/adjustment-of-certain-dollar-amounts-applicable-to-bankruptcy-cases
- CFPB — How Long Does Negative Information Stay on My Credit Report: https://www.consumerfinance.gov/ask-cfpb/how-long-does-negative-information-remain-on-my-credit-report-en-149/
- Nevada Revised Statutes 21.090 — Property Exempt from Execution: https://www.leg.state.nv.us/nrs/NRS-021.html#NRS021Sec090