Nebraska has enacted its own bankruptcy exemption statutes, which take precedence over any federal exemption standards. As a result, it is important for residents to know the state laws and carefully abide by them in order to obtain the benefit of a Chapter 7 bankruptcy petition. However, the opportunity for married couples to file jointly for bankruptcy and receive double exemptions still applies.
In addition, while many consumer debts are erased as a result of a Chapter 7 bankruptcy, debtors are still accountable for such debts as tax liens, alimony, child support, and students loans. While the types and amounts of property exemptions allowed under Nebraska law differ from federal laws, they generally provide more protection for the consumer.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption – $3,225
- Nebraska state exemption – up to $2,400 under the “tools of the trade” category
A vehicle is considered a tool of the trade in Nebraska. However, while there is a substantial exemption that can be taken for that vehicle, if the consumer still carries debt on it, they must continue to pay the lien holder or face possible repossession.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Nebraska state exemption - $60,000 for the head of household or the married debtor; however,
- That filer cannot claim more than 2 lots in a city or 160 acres anywhere else
- Sale proceeds receive a 6-month exemption
- The filer may record a homestead declaration
Any property that retains a lien from a mortgage-holder must still be paid, even if that property is exempt under Nebraska law. Such a lien gives the note-holder right to the property if the loan payments are not maintained according to contract.
Nebraska allows exemptions for other forms of personal property:
- Health and medical savings accounts – up to $25,000
- Perpetual care funds
- Burial plots
- Tombs, crypts, lots, niches, and vaults
- Health aids, personal possessions, clothing, household electronics, furniture, personal computers, appliances, musical instruments, and books – up to $1,500
- Awards from personal injury suits
- In lieu of homestead – up to $2,500 in any personal property other than wages
- Tools of the trade – up to $2,400 (including a personal vehicle used for transportation to and from work)
Filing Schedule C of a Bankruptcy Petition
Every item that a Nebraska resident claims as exempt must be listed on Schedule C of a bankruptcy petition. This form is a necessary part of the petition, for without it, all property exemption claims with be rejected. The required information includes:
- The type of property being claimed
- The state statute permitting that exemption
- The value of the property exemption
- The current assessed value of the property (not the market value)
Getting Legal Help
While Chapter 7 is considered the simplest and most straightforward of all bankruptcy Chapters, it is still a precise petition that requires much detail. Due to abuses in the past, tight standards must be adhered to or exemptions will be disallowed. A bankruptcy attorney can help filers understand the state laws, follow the precise requirements, and free themselves from unrelenting debt to begin anew.
