- First and foremost, you must determine if you qualify for Chapter 7 bankruptcy and understand the associated costs in Nebraska. It's crucial to have a clear understanding of these aspects before proceeding. You can find detailed information on qualifications and costs here.
- Secondly, it's wise to explore alternative options to Chapter 7 bankruptcy. Sometimes, there may be better-suited alternatives for your specific situation.
- Lastly, if you choose to pursue Chapter 7 bankruptcy, you should be aware of specific details about the process in Nebraska.
Chapter 7 bankruptcy is quite common in the United States, and it's likely that a significant portion of the 2,921 bankruptcies filed in Nebraska in the year ending June 30, 2021, were Chapter 7 cases.
For those who prefer visual aids, the Nebraska Chapter 7 Calculator below can help estimate qualification and cost:
1) How Chapter 7 Bankruptcy Works in Nebraska
How Fast Do You Get Relief in A Chapter 7 Bankruptcy in Nebraska
Typically, it takes about 120 days to complete a no-asset Chapter 7 case in Nebraska. A "no-asset" bankruptcy indicates that you do not possess high-value assets that surpass the Nebraska bankruptcy exemptions. Hence, your bankruptcy case may conclude relatively quickly if you lack significant assets.
How Much Does It Cost To File Chapter 7 Bankruptcy in Nebraska
The nationwide cost of Chapter 7 bankruptcy typically ranges from $500 to $3000, but even within Nebraska, the cost of Chapter 7 bankruptcy may fluctuate depending on your specific location. For instance, filing in Bellevue instead of Lincoln could result in different fees. In Bellevue, the Chapter 7 bankruptcy attorney fee might be $1,075, whereas in Omaha, it could be $1,170.
Additionally, it's worth noting that there are opportunities to reduce the cost of filing bankruptcy through a filing fee waiver.
So, How Do I Qualify For Chapter 7 Bankruptcy in Nebraska?
When assessing your eligibility for Chapter 7, it's essential to consider the Chapter 7 Bankruptcy Nebraska Income Limits. This test evaluates whether you qualify for a bankruptcy discharge, meaning your debts will be forgiven.
If you successfully pass the means test, which you can estimate below, Chapter 7 will address most of your unsecured debts. Unsecured debts, such as medical bills, personal loans, certain old income tax debts, old utility bills, credit card debts, and most personal judgments, lack collateral.
What about secured debts in Chapter 7?
If you aim to eliminate secured debts like car loans and mortgages, Chapter 7 bankruptcy remains a viable option. However, the trade-off is that you must surrender the asset to the creditor, who will deem it complete payment for your debt.
IMPORTANT: Chapter 7 Qualification via Nebraska Means Test
An essential tool for assessing your qualification for Chapter 7 bankruptcy in Nebraska is the Bankruptcy Means Test. This form calculates your average annual income using your gross income from the past six months. Subsequently, it compares this figure to the median income of households in Nebraska. You may be eligible for a Chapter 7 bankruptcy discharge if your income falls below the Nebraska median income.
You can utilize the calculator provided below to determine your eligibility.
Help! My Income Exceeded The Chapter 7 Means Test Allowable in Nebraska
If your income exceeds the median income in your state, you may need to delve into part 2 of the means test or consider alternative options. We recommend exploring this helpful resource: passing the Chapter 7 means test when income exceeds the median.
Chapter 7 Bankruptcy Nebraska Income Limits
If you're filing for bankruptcy in Nebraska on or after April 1, 2024, here are the income limitations based on household size:
Ten or more individuals: Add $9,000 for each additional member
Will I lose my belongings if I file Chapter 7 bankruptcy? Understand Nebraska bankruptcy exemptions.
In Chapter 7 bankruptcy cases, assets not safeguarded by exemptions may be liquidated. One asset of particular importance to many individuals is their home. In Nebraska, the extent of protection hinges on marital status. For single individuals, the homestead exemption is $60,000, while for married couples, it doubles to $120,000.
It's important to note that these details pertain specifically to Nebraska, and regulations may vary in other states. Therefore, it's crucial to thoroughly examine state-specific bankruptcy exemptions to ensure the adequate protection of your assets—additionally, federal bankruptcy exemptions in the 11 U.S. Code §522 offer additional safeguards. You can access a comprehensive list of federal exemptions on the National Consumer Law Center website.
Chapter 7 Bankruptcy Nebraska Pros and Cons
Pros
- Speedy relief: In about 120 days, you could eliminate your debts and begin afresh.
- Asset safeguard: Meeting the Chapter 7 bankruptcy exemption requirements may enable you to keep much of your personal property.
- Cease to debt collection efforts: Filing initiates an automatic stay, halting legal actions against you and ceasing creditor communications.
- Resolution of loan shortfalls: Bankruptcy could alleviate the obligation of owing more on loan than the collateral's worth.
Cons
- Income qualification: Meeting specific income thresholds is necessary to qualify for Chapter 7 bankruptcy.
- Asset forfeiture risk: Exceeding exemption limits may necessitate surrendering some assets.
- Credit implications: Chapter 7 bankruptcy stays on your credit report for a decade, impacting loan eligibility and interest rates.
- Non-dischargeable debts: Certain debts, such as student loans and child support, usually cannot be discharged through Chapter 7 bankruptcy.
2) Alternatives to Chapter 7 Bankruptcy in Nebraska
a) Chapter 13 Bankruptcy in Nebraska
If your income exceeds Nebraska's Chapter 7 bankruptcy threshold, Chapter 13 bankruptcy offers an alternative for debt relief.
With Chapter 13 bankruptcy, you can restructure your debts into a more manageable monthly payment plan. This restructuring allows you to maintain ownership of your home and vehicles, stop foreclosure proceedings, and avoid repossessing your belongings. Additionally, it may help reduce outstanding payments for child support, alimony, and car loans.
Can you afford Chapter 13 bankruptcy?
If you're contemplating Chapter 13 bankruptcy, you can utilize this calculator to estimate whether you can afford the monthly payment.
b) Debt Settlement
Debt settlement provides an alternative to Chapter 7 and Chapter 13 bankruptcy. Through this option, a debt settlement company negotiates a lower amount on your total debt, potentially leading to long-term savings. However, it's crucial to consider its impact on your credit score and conduct extensive research to choose a reputable and transparent debt settlement company.
c) Nebraska Debt Management
Another option to consider is debt management. Unlike debt settlement, which aims to decrease the total debt, debt management focuses on reducing interest rates. These programs typically last 3 to 5 years and may have a slightly higher cost than debt settlement. Additionally, it's important to note that not all creditors may be willing to work with a debt management company.
However, if you're dealing with substantial credit card debt with high-interest rates, debt management could lower those rates by around 10-20%. Over time, this reduction could result in 30-50% savings on your current debt, allowing you to repay what you owe more efficiently. Evaluating your financial situation and selecting the option that best aligns with your objectives is essential.
d) Nebraska Debt Payoff Planning
Another alternative to explore is debt payoff planning. This method requires dedication and self-discipline as it involves actively cutting expenses and allocating extra income toward debt repayment. By adopting an appropriate debt payoff strategy, you can steadily progress each month in reducing your debt load. Furthermore, as you begin paying off debts, you can channel those payments towards remaining balances, expediting your journey to becoming debt-free.
3) Specific Nebraska Chapter 7 Bankruptcy Information:
Nebraska Chapter 7 Bankruptcy Credit Counseling and Debtor Education Courses
As part of the Chapter 7 bankruptcy filing process, you must complete several courses to become eligible for a bankruptcy discharge. These courses offer valuable insights into your financial situation and explore alternatives to bankruptcy. Following filing your case, you must also complete a mandatory debtor education course. This course provides you with the necessary skills and knowledge to better manage your finances in the future.
To ensure adherence to requirements, the United States Trustee's Office has approved certain companies in Nebraska to deliver these bankruptcy courses. You can find a list of these approved companies on the UST website.
Nebraska Chapter 7 Bankruptcy Court Locations
Don't forget about the 341 meeting(s) of creditors, an integral part of the bankruptcy process. Although many of these meetings are now conducted over the phone or via Zoom due to the pandemic, being ready to attend in person remains essential. To help you prepare, we'll provide a list of court locations categorized by bankruptcy districts in Arizona.
District of Nebraska
Addresses of U.S. Bankruptcy Courts and a Superior Court in different cities across the state:
- 111 South 18th Plaza, Suite 1152, Omaha, NE 68102
- 100 Centennial Mall North, Room 593, Lincoln, NE 68508
- 301 North Jeffers St., North Platte, NE 69101
Chapter 7 Bankruptcy Trustees Nebraska
If you need a list of Chapter 7 bankruptcy trustees in Nebraska, we'll share it below and include a link here for more details.
Conclusion
Once you've read about Chapter 7 bankruptcy in Nebraska, you might understand its rules better and know your other options. If you want to find out if you can qualify and how much it might cost you, you can use the Chapter 7 bankruptcy means test calculator below.
Check out our detailed guide to learn more about the Chapter 7 bankruptcy process.
Moreover, if you're keen on cutting down on attorney fees and don't mind doing some of the work yourself, we have an article dedicated to filing bankruptcy without an attorney. You can find it here: filing bankruptcy without an attorney.