Updated: May 30, 2019
When you don’t have enough money to cover your financial obligations, filing for bankruptcy in Nebraska can be a good solution. But finding the information you need to get your Nebraska bankruptcy case started can be difficult. The basics are here, including information about:
- the property you can exempt (protect)
- income-qualifying (means testing) data
- credit counseling providers
- official bankruptcy forms, and
- your local Nebraska bankruptcy court.
Qualifying for Bankruptcy in Nebraska—Means Testing
The first step is learning about the two primary types of bankruptcy available to most individuals and deciding which will be best for you. Then you’ll determine whether you meet the chapter’s qualification requirements.
- Chapter 7 bankruptcy. You’ll meet income qualifications by passing the “means test.” If your family income is lower than the median income of your state, you pass and can receive a discharge in a Chapter 7 case. You might still pass the means test after subtracting certain standard expenses.
- Chapter 13 bankruptcy. If your income exceeds the Chapter 7 limits, you can repay some or all of what you owe in a five year Chapter 13 repayment plan. The tricky part here is that you must have enough income to pay all required debts. To determine your Chapter 13 bankruptcy payment, you’ll do a calculation similar to that in Chapter 7. You’ll pay the greater of your disposable income, the value of your nonexempt property, or the amount of your nondischargeable debt (such as support obligations and tax debt).
If you aren’t sure w, try starting with What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy? The necessary income charts and expense guidelines are on the U.S. Trustee’s website (select “Means Testing Information”).
Protecting Property With Nebraska’s Bankruptcy Exemptions
An important part of deciding the best chapter for you is determining whether you’ll lose property. You won’t lose everything. In fact, you might not lose anything at all.
When filing a bankruptcy case, you’re allowed to protect (exempt) much of your property. The asset must appear on the list of Nebraska exemptions or the federal non-bankruptcy exemptions list.
What will happen to nonexempt property—property you can’t protect with an exemption—will depend on the chapter you file.
- In a Chapter 7 bankruptcy, the trustee appointed to manage your matter will sell any property that isn’t exempt for the benefit of your creditors.
- By contrast, you can keep all of your property in a Chapter 13 bankruptcy. But, there’s a catch. You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan.
- Spouses who file a joint bankruptcy in Nebraska can double the exemption amount in each category (except for the homestead) as long as both spouses have an ownership interest in the asset.
Nebraska’s Bankruptcy Exemption List
You must be a Nebraska resident for at least 730 days before filing the bankruptcy petition to use Nebraska's exemptions. If you weren’t living in any one state during the two years before filing for bankruptcy, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. Learn more about filing for bankruptcy after moving to a new state.
Here are some of the most commonly-used Nebraska bankruptcy exemptions. Statute citations are to the Nebraska Revised Statutes.
Nebraska Homestead Exemption
You can protect 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. §§ 40-113, 40-116.)
Nebraska Motor Vehicle Exemption
Each debtor can protect the equity in one motor vehicle up to $5,000 per vehicle. (Neb. Rev. Stat. § 25-1556(1)(e).)
Nebraska Wildcard Exemption
The wildcard exemption allows you to protect any personal property (not real estate or wages) of your choosing up to a value of $5,000. (Neb. Rev. Stat. § 25-1552.)
Nebraska Tools of the Trade Exemption
You can protect up to $5,000 of tools and implements used in your trade or profession, but you can’t use the exemption on a motor vehicle. (Neb. Rev. Stat. § 25-1556(1)(d).)
Other Bankruptcy Exemptions in Nebraska
- Insurance benefits. Life insurance or annuity proceeds up to $100,000 of the loan value. (Neb. Rev. Stat. § 44-371)
- Personal property. An unlimited amount of immediate personal possessions, clothing, and professionally prescribed health aids. Up to $3,000 in furniture and household goods (Neb. Rev. Stat. §§25-1556(1)(a)-(c), (f)); burial plot (Neb. Rev. Stat. § 12-506); personal injury or wrongful death award in a structured settlement (Neb. Rev. Stat. § 25-1563.02).
- Pension, retirement, and life insurance benefits. County employees’ retirement benefits (Neb. Rev. Stat. § 23-2322); military disability benefits, not exceeding $2,000 (Neb. Rev. Stat. § 25-1559); ERISA-qualified benefits necessary for support, including IRAs (Neb. Rev. Stat. § 25-1563.01); school employees’ retirement benefits (Neb. Rev. Stat. § 79-948); state employees’ retirement benefits (Neb. Rev. Stat. § 84-1324). Certain federal exemptions for retirement funds might also be available under 11 U.S.C. § 522(b)(3)(C). Learn more about retirement accounts in bankruptcy.
- Public benefits. Workers’ compensation benefits (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).
- Wages. 30 times the federal minimum wage or 75% of earned but unpaid earnings; 85% of unpaid earnings for the head of household. A judge can approve more for low-income persons. (Neb. Rev. Stat. § 25-1558)
- Miscellaneous. Disability proceeds to $200 per month (Neb. Rev. Stat. § 44-754); fraternal benefits society benefits to a $10,000 loan value (Neb. Rev. Stat. § 44-1089); some partnership property (Neb. Rev. Stat. § 67-325(2)(c)); any exemptions found in the federal nonbankruptcy exemptions.
Nebraska adjusts exemption amounts periodically, and additional exemptions exist. The last adjustment occurred on July 19, 2018. You’ll want to be sure that you’re using all exemptions available to you. Check the Nebraska statutes on the Nebraska Legislature website or speak with an attorney.
More Bankruptcy Information
The information that follows usually isn’t needed unless you’re ready to prepare your paperwork and file your case.
Nebraska Credit Counseling and Debtor Education Information
Individual filers must take two financial courses—one before filing and another before receiving a discharge (debt forgiveness). Approved providers are listed under “Credit Counseling & Debtor Education” on the U.S. Trustee’s website (be sure to scroll down to your district).
Nebraska’s Bankruptcy Court Website and Location
On the Nebraska bankruptcy court website, you’ll find the court’s local rules and instructions for filing your paperwork (click on the tab “Filing Without an Attorney”). The District of Nebraska has two divisions. The court clerk assigns your court location based on your county of residence. Please contact one of the court’s offices for guidance on where to file your paperwork.
460 Robert V. Denney Federal Building
100 Centennial Mall
North Lincoln, NE 68508
Roman L. Hruska U.S. Courthouse
111 South 18th Plaza, Suite 1125
Omaha, NE 68102
Bankruptcy Costs, Filing Fees, and Forms
Most people have to pay some amount to file for bankruptcy, but it’s usually worth the cost. Here’s what you can expect.
- Official bankruptcy forms. Before the Nebraska bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms webpage, you’ll file your paperwork in your local bankruptcy court (more below) along with a filing fee or fee waiver.
- Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Find out about both in Bankruptcy Filing Fees and Costs.
- Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area. Find out the benefits of being represented by an attorney.
This overview cannot provide all of the information you’ll need to file a bankruptcy case. For more detailed information, consider consulting with a local bankruptcy lawyer or buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D.