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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.
Filing for bankruptcy can be complex and overwhelming. Here are some common reasons why you might need a lawyer’s assistance:
Nebraska follows federal bankruptcy law, but there are specific state rules and exemptions that apply to bankruptcy cases filed in Nebraska. Key aspects include:
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.
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.
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.
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.
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.
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.
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.
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.
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.
No, Nebraska requires residents to use state exemptions rather than federal ones. Familiarizing yourself with these exemptions is important before filing.
Here are some resources that can help Nebraskans considering bankruptcy or seeking legal advice:
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.
