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Nebraska Bankruptcy Laws
Nearly three-fourths of all clients in Nebraska choose Chapter 7. For these debtors, it is important to know what property exemptions are available to protect that property from liquidation. Only state, not federal, exemptions apply, which include:
Homestead |
Up to $60,000 |
Personal Property |
Health and medical savings accounts to $25,000; perpetual care funds; burial plot; in lieu of homestead, up to $2,5000 of property; health aids; personal possessions up to $1,500 |
Wages |
Minimum 85% of weekly earnings or pensions earned but not paid for head of family; for others, 30 times the federal hourly minimum wage or 75% of wages earned but not paid, whichever is greater |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; county employees; military disability benefits; ERISA-qualified benefits; public employees’ deferred compensation; school employees; state employees |
Public Benefits |
Worker’s comp; unemployment; general assistance to the poor; aid to blind, aged, and disabled |
Tools of the trade |
Up to $2,400 (can be doubled) |
Insurance |
Life insurance or annuity proceeds up to $100,000 loan value; fraternal society benefits |
For most clients, there is little, if any, court time required. The client must attend credit counseling first, after which they and their attorney can file their bankruptcy petition with the court. The court appointed bankruptcy trustee will then:
- Review the petition to ensure it is qualified and complete and to determine which, if any, assets are to be liquidated
- Schedule a 341 hearing, named for the section of the code, to review and ask any questions about the client’s assets and petition and to allow creditors to ask any questions they have
- If necessary, an unqualified Chapter 7 petition will be converted to Chapter 13
- Chapter 13 clients must meet with the judge to have their repayment plan approved
- Debtors must attend an approved debt education course
- Most Chapter 7 unsecured debts are discharged, or erased
- Chapter 13 clients repay their debts according to the court-appointed plan before their remaining debts are discharged as well.
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