Nebraska Bankruptcy Exemptions

• Bankruptcy is intended to give "honest but unfortunate" debtors a chance to start over without carrying the weight of crippling debt. However, as a debtor you must sacrifice something in order to receive this relief. For a Chapter 7 bankruptcy, this means turning over all of your assets to the bankruptcy court to create a "bankruptcy estate." If you live in Nebraska, you are allowed to keep any assets protected by Nebraska exemptions. Nebraska bankruptcy exemptions cover seven categories, including personal property, public benefits, pensions and property maintained as a residence. Chapter 13 bankruptcies do not require exemptions, as all property is protected by the courts under this chapter.
  
  

Nebraska Homestead Exemption

• Homestead exemptions are very different from state to state, with states such as Florida offering an unlimited homestead exemption while Tennessee offers just $5,000 of protection. The standard Nebraska homestead exemption allows you to protect up to $60,000 of property used as your residence. However, amounts exceeding two lots in a city or 160 acres elsewhere are not protected by this exemption. Additionally, if you have recently sold your homestead, the proceeds from that sale are exempt for six months from the date of sale.
  
  

Nebraska Bankruptcy Districts

• For the bankruptcy court to hear your case, you must file your petition in the correct courthouse. Unlike many states that have multiple bankruptcy districts, Nebraska has only one. The three Nebraska courthouses are located in North Platte, Omaha and Lincoln. The specific courthouse where you should file your petition is based on your zip code.
  
  

Qualifying for Nebraska Bankruptcy

• To qualify for a Chapter 7 bankruptcy and claim the Nebraska homestead exemption, you must compare your annual income with the median family income in Nebraska. If your income falls below the median for a family of your size in Nebraska, you can file a Chapter 7 petition. If your income is higher, you can qualify by using the means test. The means test subtracts average expenses in your area of Nebraska from your income to arrive at a monthly disposable income figure. If this amount is less than the current federal limit as based on U.S. Census Bureau data, you can still file Chapter 7. If it is higher, you may have to file Chapter 13 instead.