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About Bankruptcy Law in Nebraska, United States
Bankruptcy is a legal process that helps individuals or businesses who cannot pay their debts get a fresh start. In Nebraska, bankruptcy is governed by federal law, but specific local rules and procedures also apply. The most common types of bankruptcy for individuals are Chapter 7, which involves liquidation of assets to pay debts, and Chapter 13, which creates a repayment plan to pay back all or part of the debts over time. Bankruptcy can stop creditors from pursuing collection actions, such as lawsuits, wage garnishments, or foreclosure, providing crucial relief for people facing financial hardship.
Why You May Need a Lawyer
Filing for bankruptcy can be complex and overwhelming. Here are some common reasons why you might need a lawyer’s assistance:
- Understanding whether bankruptcy is the right option for your financial situation
- Navigating the specific requirements and paperwork involved in bankruptcy filings
- Identifying which chapter of bankruptcy (Chapter 7 or Chapter 13) is most appropriate
- Protecting valuable assets from liquidation or ensuring you qualify for exemptions
- Dealing with disputes from creditors or the bankruptcy trustee
- Handling adversary proceedings or lawsuits related to your case
- Achieving the maximum benefit from the bankruptcy process and ensuring your debts are properly discharged
- Unknown or overlooked legal details that could impact your case
Local Laws Overview
Nebraska follows federal bankruptcy law, but there are specific state rules and exemptions that apply to bankruptcy cases filed in Nebraska. Key aspects include:
- Exemptions: Nebraska has its own set of bankruptcy exemptions. These determine what property you can keep when filing for bankruptcy. Nebraska exemptions cover items such as a portion of equity in your home (the homestead exemption), motor vehicles, necessary household goods, and certain retirement accounts.
- Means Test: To qualify for Chapter 7 bankruptcy, you must pass a means test, which compares your income to the median income for Nebraska households of your size. If you exceed the threshold, you may need to file under Chapter 13 instead.
- Bankruptcy Courts: Bankruptcy cases in Nebraska are filed in the United States Bankruptcy Court for the District of Nebraska, with locations in Omaha, Lincoln, and North Platte.
- Filing Requirements: Nebraska courts require specific forms and documentation, including a list of all creditors, assets, liabilities, current income, and details of monthly living expenses.
- Credit Counseling: Before filing, debtors must complete credit counseling from an approved agency. A debtor education course is also required before debts are discharged.
Frequently Asked Questions
What is the difference between Chapter 7 and Chapter 13 bankruptcy in Nebraska?
Chapter 7 bankruptcy involves liquidating non-exempt assets to pay off debts and is generally quicker, often completed within a few months. Chapter 13 allows you to keep your property but requires you to repay debts over three to five years according to a court-approved plan.
How do I know if I qualify for bankruptcy in Nebraska?
Eligibility depends on various factors, including your income, debts, and prior bankruptcy filings. To file Chapter 7, you must pass the means test. Anyone with regular income can generally file for Chapter 13, though there are debt limits.
Will I lose my home or car if I file for bankruptcy?
Not necessarily. Nebraska exemptions may protect some or all of the equity in your home and vehicle. The specific outcome depends on your financial details and which type of bankruptcy you file.
How long does bankruptcy stay on my credit report?
A Chapter 7 bankruptcy stays on your credit report for 10 years from the filing date. A Chapter 13 bankruptcy remains for seven years from the date of filing.
Can bankruptcy stop foreclosure or repossession?
Yes, filing for bankruptcy triggers an automatic stay that temporarily halts most collections, including foreclosure and repossession actions. However, this may not be a permanent solution unless you are able to catch up on payments or restructure debt.
What debts can be discharged in a Nebraska bankruptcy?
Most unsecured debts such as credit cards, medical bills, and personal loans can be discharged. However, some debts like child support, alimony, student loans (in most cases), and certain taxes are not dischargeable.
Will all my assets be taken if I file for bankruptcy?
No. Nebraska’s bankruptcy exemptions protect certain property. Many filers retain most or all of their essential assets. Non-exempt assets may be sold to pay creditors in a Chapter 7 case.
What is the bankruptcy means test?
The means test is a calculation used to determine eligibility for Chapter 7 bankruptcy. It reviews your household income and allowable expenses compared to Nebraska’s median income for a household of your size.
Do I need to attend court in person?
Most bankruptcy filers must attend at least one hearing, called the meeting of creditors, where creditors and the bankruptcy trustee can ask questions. Other hearings may be required only if issues arise.
Can I choose between federal and Nebraska exemptions?
No, Nebraska requires residents to use state exemptions rather than federal ones. Familiarizing yourself with these exemptions is important before filing.
Additional Resources
Here are some resources that can help Nebraskans considering bankruptcy or seeking legal advice:
- United States Bankruptcy Court - District of Nebraska: Handles all bankruptcy filings statewide and provides forms, local rules, and filing instructions
- Legal Aid of Nebraska: Offers free or low-cost legal assistance to qualifying individuals facing bankruptcy and financial hardship
- Nebraska State Bar Association: Can help you find a qualified bankruptcy attorney in your locality
- Consumer Credit Counseling Agencies: Many nonprofit agencies in Nebraska offer credit counseling and debtor education courses as required by law
- Local Law Libraries: Provide access to bankruptcy resources and self-help materials
Next Steps
If you are considering bankruptcy in Nebraska, it is important to gather detailed information about your finances, including your debts, assets, income, and expenses. Complete the required credit counseling session with an approved agency. Afterward, consider consulting with a qualified bankruptcy attorney who can evaluate your situation, explain your options, and guide you through the necessary proceedings. Many attorneys offer free initial consultations, so you can discuss your case and understand the potential outcomes before making a commitment. You can contact the United States Bankruptcy Court or local legal aid organizations for further information and direction. Taking these steps will help you make an informed decision and effectively manage the bankruptcy process in Nebraska.
Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation. We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please contact us, and we will review and update it where appropriate.