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Lawmakers told to close Nevada bankruptcy loopholes

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NVMojo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-05-05 05:52 PM
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Lawmakers told to close Nevada bankruptcy loopholes
If nothing else, read this for amusement sake ...

CARSON CITY, Nev. (AP) - Wealthy people with a lot of bills and good legal advice are using Nevada's bankruptcy laws to protect expensive cars, art collections and real estate, bankruptcy trustees and lawyers told state legislators Monday.

The trustees asked the Assembly Judiciary Committee to pass AB428, which tightens exemptions that are intended to allow debtors to protect some essential assets - such as a home or a car for driving to work - but are being abused.

"Given Nevada's exemption law, you can have a gold-plated golf cart and claim it exempt," said Angelique Clark, a trustee with the U.S. District Bankruptcy Court.

Opponents of the bill said it threatens to hit the middle-class debtor. They called it badly drafted and poorly timed - especially in light of a federal bankruptcy reform bill that makes it easier for some credit card companies, banks and retailers to recoup funds.

"I just find it beyond belief that, in light of Congress passing this bankruptcy law, which makes it virtually impossible for the middle class and lower-middle class to file bankruptcy following a medical crisis, that we're now going to take a car away from them," said Assembly Majority Leader Barbara Buckley, D-Las Vegas.

AB428 lowers the amount debtors could claim under a vehicle exemption from $15,000 to $10,000. Under current law, debtors are "stacking" exemptions and protecting expensive vehicles like Hummers and Harley-Davidson motorcycles, said Clark.

The bill also would require debtors to live in a home for 180 days before claiming it under the homestead exemption. Clark told of one wealthy real estate investor who moved to a trailer on a piece of his land shortly before filing for bankruptcy, so that he could claim the property as his residence.

The bill would allow money in some pension plans to be subject to seizure if it was invested less than 180 days before a debtor filed for bankruptcy. Keepsakes and collectibles valued at over $100 could not be exempted.

Clark cited Las Vegas entertainer Wayne Newton, who went bankrupt in the early 1990s, as a particular abuser of the collectibles exemption.

...snip

http://www.lasvegassun.com/sunbin/stories/nevada/2005/a...
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