What are my personal bankruptcy options in Nebraska?

Nebraska has two personal bankruptcy options. Both bankruptcy options come with an automatic stay which stops creditors from suing and garnishing wages. Chapter 13 is for individuals with regular income such as a job. The bankruptcy chapter eliminates secured such back mortgage payments and unsecured debts through repayment. Typically, chapter 13 lasts for approximately three to five years. Individuals filing chapter 13 in Nebraska have to make payments through a repayment plan. During the bankruptcy, individuals make monthly payments to a bankruptcy trustee who distributes the money to creditors. People also have to keep their payments (to creditors included in their bankruptcy) such as their mortgage or car payments current.

Another personal bankruptcy option is for individuals with very little income. Unlike chapter 13, chapter 7 is only for unsecured debts. Generally, these debts include credit card bills and medical bills. In approximately four to six months, debts are wiped out. In other words, people aren’t legally required to pay creditors the money they owe. Chapter 7, however, does have some disadvantages. For instance, it doesn’t eliminate major unsecured debts like child support, student loans, spousal support or income taxes. Also, it won’t stop foreclosures either.

Before filing bankruptcy, Nebraska has lawyers who are experts in bankruptcy. Thus, it’s vital to consult a bankruptcy lawyer before starting the bankruptcy process. For instance, individuals can’t pick the bankruptcy chapter they want to file. Thus, the bankruptcy lawyer will determine--according to income--which one their clients are eligible for.