Filing for public bankruptcy in Nebraska may be less desirable than in some other states throughout the United States. The decision to file for bankruptcy is still an extremely important one that should not be made without the help of legal aid. It is very important to remember that no form of bankruptcy will remove all debts from a debtor.
Options for Personal Bankruptcy in Nebraska
Chapter 7 bankruptcy is by far the most common form of bankruptcy everyone in the United States. Although individuals may also file for Chapter 13, which offers its own benefits to each case, it is not chosen as often.
Chapter 7 Bankruptcy
Before anything else, one must do in order to file for bankruptcy is pass a 'means test.' This test will show whether the individual is below the median income, which is required to file for bankruptcy. In Nebraska, the median income figure used is $37,803 for an individual, $53,453 for couples, $62,814 for three person households, $72,179 for four person households, and an additional $6,900 for each addition family member. This form of bankruptcy is commonly called 'fresh start' bankruptcy because it will take away nearly all debts from an individual. However, in contrast, its second common name is 'liquidation' bankruptcy. The price paid for removal of the debts is liquidation of all of the debtors’ assets, aside from 'exemptions.'
Chapter 13 Bankruptcy
To qualify for Chapter 13 bankruptcy a private individual can have no more than $1,010,650 in secured debts or $336,900 in unsecured debts to qualify for this form of bankruptcy, and the 'means test' must also be passed for Chapter 13 bankruptcy. Once these things are approved through the bankruptcy court, a bankruptcy trustee will work with the debtor and creditors in order to design a repayment plan over the next 3 to 5 years. 5 years is the government regulated limit on the repayment plan, however changes may be given through the bankruptcy court. The debtor is able to keep all of his possessions but must put most of his or her wage toward the repayment plan. This is the derivation of the nickname 'wage earners' bankruptcy. (See more on Filing Chapter 13 in Nebraska).
Filing Bankruptcy during Foreclosure
Foreclosures in many cases, though it is not set in stone, are halted by filing for Chapter 7 or Chapter 13 bankruptcy. This is because a bankruptcy, once filed causes creditors to be mandated by law to stop any actions to regain debts from a debtor, including foreclosures. These foreclosures may continue if the creditor proves to the bankruptcy court that the home will lose substantial value while the bankruptcy process goes on. In addition, Chapter 13 bankruptcy addresses the repayment of mortgage obligations and may allow debtors to keep their homes eve with a coming foreclosure.
Nebraska Bankruptcy Exemptions
In the state of Nebraska, individuals are held to a list of exemptions created by the state, but they also may include Federal Supplemental Exemptions:
Type of Asset(s)
Details on Applicable Exemption(s)
Up to $12,500
Fraternal Benefit Society, Life annuity proceeds to $10,000
Property of business
County employees, ERISA, Military, School employees, and State employees pensions
Burial plot, Clothing, Food and fuel to 6 months, Furniture to $1,500, Perpetual care funds, and Keepsakes
AFDC, Unemployment, and Workers' compensation
Tools of Trade
Up to $1,500 (couples may double)
For head of family, minimum 85% of earned but unpaid weekly earnings or pension payments. For all others, the greater of the following: 30 times the federal minimum hourly wage or 75% of earned but unpaid earnings. Judge may approve more for low-income debtor.
Up to $2,500
Nebraska Bankruptcy Court Filing Options
Use a Bankruptcy Lawyer
As bankruptcy lawyers are legal professionals, they know all that is required to complete an entire bankruptcy correctly. This provides not only efficiency to one's bankruptcy, but peace of mind and stress relief in the knowledge that their finances are being taken care of properly. This option is costly; however, risks of other options are high.
Use a Filing Service
Less costly than hiring a bankruptcy lawyer and much less helpful, are Filing Services. Their only purpose to a bankruptcy is to complete the paperwork. They provide no legal advice at all, and can only save the debtor the time of filing the paperwork. (See also Nebraska Petition Preparer Guidelines).
File “Pro Se”
There are numerous risks involve in filing pro se. Although it may be a needed for those who are have very low funds left after filing for bankruptcy. This is a difficult process because of the acute complexities of bankruptcy law on the state and federal level.
Courts and Nebraska Bankruptcy Trustee Information
Nebraska Bankruptcy Court Lincoln Divisional Office
460 Robert V. Denney
United States Courthouse
100 Centennial Mall North
Lincoln, NE 68508-3803
Nebraska Bankruptcy Court Main Office
Roman L, Hruska United States
Courthouse, Suite 1125
111 South 18th Plaza
Omaha, NE 68102