Filing bankruptcy in Nebraska gives honest debtors an opportunity to recover from debt and repays creditors to the extent that a debtor’s property value or earnings permit. 7,659 bankruptcies were filed in Nebraska in 2010, ranking Nebraska 27th in the country for the number of bankruptcy filings per capita. 73% of Nebraska’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.
Filing Bankruptcy in Nebraska
Federal law regulates bankruptcy proceedings in Nebraska, and as such, all bankruptcy cases are filed in the US Bankruptcy Courts located in Lincoln, North Platte and Omaha.
Although the federal courts exclusively govern bankruptcy proceedings, Nebraska law prohibits debtors from using the exemptions listed in the U.S. bankruptcy code and requires the use of the exemptions listed under Nebraska bankruptcy law. With the guidance of a bankruptcy attorney Nebraska petitioners can gain a full understanding of what personal property they are permitted to keep in bankruptcy and what must be sold.
Chapter 7 Bankruptcy, Nebraska
Chapter 7 bankruptcies in Nebraska are the most common bankruptcy petition filed. Chapter 7 is best suited to petitioners who do not have major assets such as investments or significant equity in a home, for the reason that a Bankruptcy Trustee may liquidate personal property that is not protected by Nebraska’s bankruptcy exemptions. Liquidation is the process by which a court-appointed Trustee converts personal assets to cash to distribute among creditors. Nebraska’s Chapter 7 bankruptcy law allows petitioners to keep some essential property and these exempt assets cannot be claimed by creditors looking for repayment.
The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.
Nebraska Bankruptcy Exemptions
Nebraska bankruptcy law assigns specific property exemptions that enable debtors to keep some personal property and assets so bankruptcy proceedings do not leave them destitute. Bankruptcy in Nebraska lets petitioners choose exemptions from the state list, exclusively.
Due to changing exemption amounts, individuals and couples initiating bankruptcy proceedings ought to first visit a Nebraska bankruptcy attorney to learn which exemptions are applicable to their current financial situation. Nebraska bankruptcy exemptions include:
Nebraska Homestead Exemption
- $60,000 total: For head of family or unmarried person age 65 or older; cannot exceed 2 lots in city or village, 160 acres elsewhere; sale proceeds exempt 6 months after sale (Husband and wife may not double)
Nebraska Personal Property Exemption
- $1,500 total: Furniture, household goods and appliances, household electronics, personal computers, books and musical instruments
- Clothing and personal possessions
- Health aids
- $2,400 total: Motor vehicle if used to commute to work (part of tools of trade exemption)
- Perpetual care funds
- Personal injury recoveries
- Burial plot, crypts, lots, tombs, niches and vaults
Nebraska Tools of the Trade Exemption
- $2,400 total: Equipment or tools including a vehicle used in/or for commuting to principal place of business (Husband and wife may double)
Nebraska Wage Garnishment Exemption
- 85% of earned but unpaid weekly disposable earnings or pension payments for head of family; 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage, whichever is greater, for all others (Low-income debtors may qualify for more)
Nebraska Public Benefits Exemption
- Aid to disabled, blind, aged; public assistance
- General assistance to poor persons
- Unemployment compensation
- Workers’ compensation
Nebraska Insurance Exemption
- $100,000 loan value: Fraternal benefit society benefits from assets established more than three years prior to bankruptcy; no exemption if beneficiary convicted of a crime related to benefits
- $100,000 total: Life insurance proceeds and avails
Nebraska Pensions and Retirement Savings Exemption
- County, State and School employees
- Deferred compensation of public employees
- $2,000 total: Military disability benefits
- IRAs, Roth IRAs and ERISA-qualified benefits needed for support
Nebraska Wild Card Exemption
- $2,500 total: Any personal property, except wages, in lieu of homestead
Chapter 13 Bankruptcy, Nebraska
In 2010, 27% of petitioners filed Chapter 13 bankruptcy in Nebraska. Seeking protection under Chapter 13 bankruptcy in Nebraska requires a court-appointed Trustee to restructure the petitioner’s debts and implement a 3-5 year repayment plan, using the debtor’s future earnings to repay creditors. Chapter 13 petitioners in Nebraska keep most – or all – of their property.
How to File Bankruptcy in Nebraska
Qualification for key property exemptions should be a primary deciding factor when considering bankruptcy protection as a solution for financial problems. The most favorable outcome would be having major assets protected and major debts discharged. A Nebraska bankruptcy attorney can help explain exemption limits and offer guidance on the benefits and realities of Chapter 7 and Chapter 13 bankruptcy.
Bankruptcy Attorney: Nebraska
Filing for bankruptcy can be an upsetting and complex process. A Nebraska bankruptcy attorney can be a valuable partner throughout the process; leading petitioners through bankruptcy exemption procedures and provide counsel on the appropriate bankruptcy options for their financial situation.