Federal law allows states to enact their own regulations governing what assets their citizens can shield from creditors. To help people go on with their lives following bankruptcy, Nebraska has decided to enact its own laws regarding exempt property.
In some states, you may be given the option to choose between federal exemptions found in the Bankruptcy Code and state law exemptions. Nebraska, however, is not one of them. You must use the Nebraska exemptions if you file for bankruptcy in the state.
Regardless of the type of personal bankruptcy you file for, exemptions are an important part of the bankruptcy process.
Exemptions have a significant impact on Chapter 7 since they greatly influence how much of your property you can keep. Additionally, you will typically emerge from bankruptcy almost debt-free. But to be eligible, you must first meet severe income requirements.
People with stable incomes who file for Chapter 13 bankruptcy can reorganize most of their debt and pay it off in three to five years. The payments are made per a court-approved plan that typically results in some debt forgiveness. Homeowners prefer Chapter 13 because they can frequently keep their properties.
The court will automatically impose a stay when you file for either type of personal bankruptcy. The stay stops almost all debt collection efforts, including foreclosures and legal actions. This gives you the breathing room to deal with debt issues and stops collection agencies from pestering you.
In Nebraska, Am I Eligible for Bankruptcy?
Like all other states, Nebraska requires proof that your income is too low to qualify for Chapter 7. Typically, one of two means tests are used for this.
You qualify if your household’s income is lower than the median household income for households of similar sizes in your state.
According to the U.S. Trustee Program, the median income for a three-person household in Nebraska is $103,405 for cases filed on or after July 15, 2026. If your three-person household earns less than that, you meet the income test for Chapter 7. These numbers change about twice a year, so check the U.S. Trustee’s current median income table before you file.
Based on your disposable income, you may still qualify for Chapter 7 if your household income is higher than the Nebraska median. By deducting your monthly expenses from your monthly income, you can determine your monthly disposable income. You may petition for bankruptcy under Chapter 7 if the calculation reveals that you have little monthly discretionary income.
To file under Chapter 13, you need a steady income. Your unsecured debt must be under $526,700, and your secured debt must be under $1,580,125. These limits apply to cases filed through March 31, 2028. They are adjusted every three years.
Nebraska Exemptions from Bankruptcy
The exemption system in Nebraska is a key part of a Chapter 7 bankruptcy. If your property qualifies for an exemption, you can keep it safe from creditors and start fresh after you file. Nebraska adjusts these dollar amounts for inflation every five years. The amounts below include the current adjustment, which runs through 2027.
If a married couple owns property jointly, each spouse can often claim an exemption when they file for bankruptcy together in Nebraska. This “doubling” does not apply to the homestead exemption.
Homestead Exemption
In Nebraska, you can protect up to $120,000 of the equity in your home. Nebraska raised this amount from $60,000 in July 2024. Whether you file with your spouse or separately, this sum remains the same. The first $120,000 from the sale of your home stays protected for up to six months after the sale.
The exemption is restricted to two or fewer lots if the house is in a city or village. If it is situated somewhere else, the maximum is 160 acres.
Exemption from Pay
If you are the head of your family, 85% of your take-home pay is protected. For everyone else, 75% is protected. Either way, you keep at least 30 times the federal minimum wage each week. These limits do not apply to child support, alimony, or tax debts.
Personal Property Exemption
The state of Nebraska permits you to keep all of your immediate personal belongings, necessary clothing, and prescribed health aids. You can also keep up to $3,582 in household goods and furniture. This covers things like appliances, computers, books, and musical instruments.
Wildcard Exemption
Other than wages, you may keep personal property worth up to $5,970. You can stack the wildcard exemption on top of another exemption to protect more value in a single item.
Previously, if you claimed the homestead exemption, you were not eligible to use the wildcard exemption, but in 1997, the legislation was altered to allow everyone to do so.
Exemption for Motor Vehicles and Trade Equipment
Most states will grant you an exemption for a portion of any equity you may have in your car.
Nebraska protects up to $5,970 of equity in one motor vehicle. You no longer have to show that you use the car for work. You can also protect up to $5,970 in tools, equipment, or professional books used in your main trade or business.
Benefits from Insurance Exemption
Benefits from the following insurance plans are exempt:
- A maximum of $100,000 of the loan value may be paid back with an annuity or life insurance payout.
- From a fraternal benefit society, up to $100,000 of the loan or cash value is exempt.
Exemptions for Pensions and Retirement
In Nebraska, the majority of pension and retirement plans are excluded, including:
- 401(k), IRA, and other tax-exempt retirement accounts, as well as defined benefit pension schemes
- Retirement benefits for state, county, and school employees
- Benefits for veterans’ disabilities, not to exceed $2,000
Exemptions from Public Benefits
Various Exemptions
- Awards for wrongful death or personal injury and structured settlements.
- Crypts, niches, tombs, vaults, or burial grounds
In Nebraska, How Do I File for Bankruptcy?
You must first finish a counseling course within 180 days of filing if you intend to file for bankruptcy. The course’s goal is to determine if you can repay your debts without declaring bankruptcy.
If you intend to file under Chapter 13, you could be required to put together a repayment plan while doing so to submit it to the court. Along with your bankruptcy filing, a certificate of course completion is required.
Finding and downloading the appropriate forms for the U.S. Bankruptcy Court for the District of Nebraska is the first step in the bankruptcy procedure when you represent yourself without counsel. You may find information on the other forms and documents that must be submitted with your petition in the instructions that are included with the form.
In Nebraska, How Much Does Bankruptcy Cost?
In Nebraska, Chapter 7 bankruptcy filings cost $338, while Chapter 13 filings cost $313. The costs are the same whether you file “pro se” (on your own behalf) or hire a lawyer. You can seek to pay the filing fee in installments over a 120-day period if you are unable to do so. You can ask to have the charge waived if your income is less than 150% of the poverty level.
Need Assistance Declaring Bankruptcy in Nebraska?
Bankruptcy rules can be hard to sort out on your own, so it helps to talk with a lawyer before you file. A Nebraska bankruptcy attorney familiar with Nebraska law can help you keep your exempt property and avoid common filing mistakes.
