There are a few factors that are associated with financial issues. A few common reasons include personal debt, foreclosure, divorce, illness, or sudden unemployment.
In fact, the average credit card debt in Nebraska is a whopping $4,838 per person. In addition, foreclosure rates are also as staggering, one out of every 3,698 NE homes is currently in foreclosure.
If you find yourself struggling with similar situations, then you are probably dealing with other personal issues that come with dealing with debt. The fear of losing your automobile, house or your money can drain a person physically and emotionally. You may have even considered Claiming Bankruptcy .
If you are thinking “Should I File Bankruptcy?” you are certainly not alone. Almost 1 million people file bankruptcy each year in the United States. Bankruptcy is a means created by the US Government to help struggling Americans find relief from massive debt. You may want to research bankruptcy if it’s best for you.
What Is Bankruptcy?
Bankruptcy provides people with the freedom to get out from underneath considerable debt while still working with lenders in a legal capacity. It is started by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or by spouses jointly. When the bankruptcy is settled, the filer will ‘exit’ and will have a chance for a fresh start on their finances.
Throughout the bankruptcy process, a trustee is appointed to oversee the particulars of the case. His or her duties will vary and depend on whether the individual has filed for Chapter 7 or Chapter 13 bankruptcy.
Did you know that Nebraska ranks #30 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 251 out of every 100,000 residents.
What Is The Difference Between Chapter 7 And Chapter 13?
Individuals or couples in Nebraska, who claim bankruptcy, can choose to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. What is the difference? Look below for more information
The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.
The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.
A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. You will be allowed to retain your valuable assets over a 3- to 5-year period.
In order to determine which type of bankruptcy a person can file, they will have to determine their ability to repay under the Bankruptcy Means Test.
What Is A Bankruptcy Means Test?
The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:
- income and expenses
- household size and composition
- debt-to-income ratio
For those who do not qualify for a Chapter 7 filing, they will be able to file for Chapter 13, as described above.
What Are Bankruptcy Exemptions?
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
- $60,000 of equity in a residential property not to exceed 2 lots in a city or 160 acres elsewhere. Sale proceeds are exempt for 6 months (40-113, 40-116).
- Burial plot.
- Tombs, crypts, lots, niches, and vaults.
- Health aids; personal possessions; clothing; furniture, household electronics, personal computers, musical instruments, appliances, and books up to $1,500.
- Recovery for personal injuries.
- For the head of household, minimum 85% of earned but unpaid weekly earnings or pension payments. For all others, the greater of the following: 30 times the federal minimum hourly wage or 75% of earned but unpaid earnings. Judge may approve more for a low-income debtor.
- Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
- IRAS and Roth IRAs to $1,283,025.
- County employees.
- Military disability benefits.
- ERISA-qualified benefits needed for support including IRAs and Roth IRAs.
- Public employees’ deferred compensation.
- School employees.
- State employees.
- Workers’ compensation.
- Unemployment compensation.
- General assistance to the poor.
- Aid to blind, aged, and disabled; public assistance.
- Earned income tax credit.
Tools of Trade
- Tools or equipment up to $2,400, including a motor vehicle use to commute to work. Spouses may double.
- Life insurance or annuity contract proceeds up to $100,000.
- $2,500 of any property except wages.
Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.
Filing Bankruptcy Alone vs. Filing With An Attorney
You are not required by law to hire a lawyer to declare relief. People are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not recommended.
Filing Bankruptcy without an Attorney
A simple Chapter 7 Bankruptcy that doesn’t have a lot of debtors or assets may be easy to manage on your own.
A basic bankruptcy that doesn’t involve an attorney might look like:.
- Your income is below the state median;
- You have no property;
- Your debts will be considered dis-chargeable.
Working With An Attorney
For most people, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy attorney is there to represent you and not the creditors.
An attorney is also keenly familiar with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.
While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.
What Does Bankruptcy Include?
Once you file for bankruptcy in NE, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.
In any event, Bankruptcy will be able to include:
- credit card debt
- protection from eviction
- avoidance of foreclosure
- utility bills
- medical expenses
Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.
Final Thoughts And Considerations On Filing For Bankruptcy In Nebraska
As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.
Bankruptcy Courts In NebraskaRobert V. Denney United States Courthouse
100 Centennial Mall North
Nebraska Bankruptcy Court
Roman L. Hruska United States Courthouse
111 South 18th Plaza
Nebraska Bankruptcy Court
Additional Nebraska Resources
Foreclosure Help Program
Disability SSDI Benefits