If you file for Chapter 7 bankruptcy in Nebraska, you can protect some or all of your property with Nebraska’s bankruptcy exemptions. The bankruptcy exemptions in Nebraska also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Nebraska’s bankruptcy exemptions.
For a general overview of bankruptcy exemptions, how they work, and which ones you can use, visit the Bankruptcy Exemption topic page.
Nebraska Requires Debtors to Use State Exemptions
Nebraska has opted out of the federal exemption scheme, meaning you are not permitted to use the federal bankruptcy exemptions when you file a bankruptcy in Nebraska. If you file for bankruptcy in Nebraska, you may only exempt property using the Nebraska exemptions.
Although you can’t use the federal exemptions in Nebraska, you may use any of the applicable federal non-bankruptcy exemptions. The federal non-bankruptcy exemptions protect property such as federal retirement accounts and veterans’ benefits.
Married Couples May Double Nebraska Exemptions
Married couples filing a joint bankruptcy in Nebraska may double the exemption amount. This means that each spouse may claim the full exemption amount for any property in which the spouse has ownership interest. For example, if both spouses own household goods and they file jointly, they can double the amount of their personal property exemption in order to protect the property’s value.
Common Nebraska Exemptions
Below are some of the most common exemptions available under Nebraska law. Unless otherwise noted, all references are to the Nebraska Revised Statutes.
Homestead or Residential Property
The homestead exemption protects equity in your home or principal residence. In Nebraska, you can exempt up to $60,000 of equity in the home in which you live and the land on which it sits, as long as it does not exceed two lots in a city or village, or up to 160 acres outside of a city or village. Neb. Rev. Stat. §40-101
The proceeds from the sale of your home are exempt, up to the amount of the homestead exemption, for six months after the sale. Neb. Rev. Stat. §40-111, 113
For more details about how the homestead exemption works in Nebraska, see The Nebraska Homestead Exemption.
Life insurance or annuity proceeds up to $100,000 of the loan value. Neb. Rev. Stat. §44-371
Fraternal society benefits up to loan value of $100,000 (unless the beneficiary was convicted of a crime related to the policy benefits). Neb. Rev. Stat. §44-1089
Nebraska doesn’t have a specific exemption to protect your vehicle, but you may combine the wildcard and tools of the trade exemptions to protect equity in your vehicle. The wildcard exemption protects up to $2,500 in value in any personal property and the tools of the trade exemption protects up to $2,400 of equity in a motor vehicle, if used to commute to and from your place of business or employment. Neb. Rev. Stat. §25-1552, 1556
To learn more about how to exempt your motor vehicle under Nebraska law, read The Nebraska Motor Vehicle Exemption in Bankruptcy.
Immediate personal possessions, clothing, professionally prescribed health aids, and up to $1,500 in furniture, household goods, books and instruments belonging to you and your family. Neb. Rev. Stat. §25-1556
Up to $25,000 in health savings accounts (HSAs). Neb. Rev. Stat. §8-1
Burial plot, tombs, crypts, and vaults. Neb. Rev. Stat. §12-517, 605
Personal injury awards. Neb. Rev. Stat. §25-1563.02
Pension, Retirement, and Life Insurance Benefits
County employees’ retirement accounts and benefits. Neb. Rev. Stat. §23-2322
Military disability benefits. Neb. Rev. Stat. §25-1559
ERISA-qualified benefits necessary for support, including IRAs. Neb. Rev. Stat. §25-1563.01
Deferred compensation for public employees. Neb. Rev. Stat. §48-1401
School employees’ retirement benefits. Neb. Rev. Stat. §79-948
State employees’ retirement benefits. Neb. Rev. Stat. §84-1324
Workers’ compensation. Neb. Rev. Stat. §48-149
Aid to the blind, aged, disabled, and public assistance. Neb. Rev. Stat. §68-1013
Earned income tax credit. Neb. Rev. Stat. §25-1553
Unemployment compensation. Neb. Rev. Stat. §48-647
General assistance to the poor. Neb. Rev. Stat. §68-148
30 times the federal minimum wage or 75% of earned but unpaid earnings, or for head of family, 85% of unpaid earnings. A judge may approve more for low-income persons. Neb. Rev. Stat. §25-1558
Tools of the Trade
Up to $2,400 of tools and implements used in your trade or profession, including a motor vehicle you use to travel to and from your place of business. Neb. Rev. Stat. §25-1556
Up to $2,500 in any property, other than wages. Neb. Rev. Stat. §25-1552. (Learn more in The Nebraska Wildcard Exemption in Bankruptcy.)
Confirming Nebraska’s Bankruptcy Exemptions
Nebraska’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the official website of the Nebraska Legislature at http://nebraskalegislature.gov.