While no one intends to get deep into debt, unavoidable things happen from time to time. For some, debt occurs because they make unwise purchases. For others, loss of a job or a medical emergency can lead to debt problems. If you find yourself in a place where debt has become staggering, consider looking into bankrutpcy protection under Nebraska bankruptcy laws.

Bankruptcy Exemptions

Nebraska’s bankruptcy laws place exemptions on some property. This means that the items are protected from being sold to repay your debts through the bankruptcy process:

• Up to $60,000 for your homestead, which must be 160 acres or smaller
• Immediate personal possessions
• In lieu of homestead, up to $2,500 for personal property (excluding wages)
• Up to $1,500 for household goods and furniture
• Up to $2,400 for tools of the trade
• Proceeds from sale of the homestead for six months
• Provision and fuel needed for six months
• Earned income tax credit refund
• Prescription health aids
• 75 percent of disposable earnings each week
• Clothing (no limit)
• Pensions for disabled military, including property purchased with the pension money, up to $2,000
• Personal injury or wrongful death claim money
• Qualified retirement plan interest if used for support
• Some retirement and workman’s compensation benefits
• Insurance proceeds and benefits
• Annuity contract
• Unemployment compensation

Nebraska bankruptcy law does not give a motor vehicle exemption. Those not claming the homestead exemption can use the personal property exemption toward their car. Those who still have a loan on the car and wish to continue to make payments in order to keep it need to reaffirm their debt within 45 days of the 341 meeting.

Chapter 7 Bankruptcy Information

In order to file Chapter 7 bankruptcy, which is the form of bankruptcy that allows debtors to remove most of their debts, you must first pass the means test. If your income is at or below the median level in Nebraska, you can file for Chapter 7 bankruptcy protection.

Chapter 13 Bankruptcy Information

Chapter 13 bankruptcy is a little different, because it does not wipe out debts. Under Chapter 13 bankruptcy protection, you will work with the court-appointed trustee to create a workable repayment plan that repays debts over a period of three to five years. All payments go to the trustee, who then distributes them to your creditors on your behalf.