If you are declaring bankruptcy in Nebraska, you need to read this guide first. Here, we outline key laws and guidelines to help you through the process.
Declaring bankruptcy is not a simple process. Before filing for bankruptcy in Nebraska, you need to hear the good news and the bad news.
The bad news: filling out bankruptcy paperwork can be exhaustive and confusing, and there are numerous steps throughout the bankruptcy process. The good news: the requirements (i.e. meetings and counseling sessions) are short and easy to complete. Additionally, you can claim exemptions to protect some of your assets.
Under the Nebraska homestead exemption, for example, you can safeguard up to $60,000 of equity in your home. Enlist the help of an attorney to help you claim these exemptions.
This article will show you how to declare bankruptcy in Nebraska.
Chapter 7 or Chapter 13?
Before filing for bankruptcy in Nebraska, determine which bankruptcy path is right for you. A Chapter 7 bankruptcy will discharge most of your debts. You’ll get an automatic stay, meaning that most creditors cannot pursue a collection against you.
However, the court will appoint a trustee to sell all non-exempt assets. Overall, Chapter 7 bankruptcy is the best option for the following individuals:
- People with few assets
- People with low income and high debts
If you make too much money, however, Chapter 13 is the best choice. Under Chapter 13, a debtor with regular income will pay back some of the debts over time. Businesses can file under Chapter 13 as well.
You will follow a payment plan where you make routine payments to creditors. Depending on your situation, you’ll pay back all or some of your debts. How much you’ll pay back depends on such factors as your income and the type of debt you hold.
Also, Chapter 13 is a great way to catch up on certain payments.
- Example: If you’re behind on a house or car payment, a payment plan can help you get caught up.
Additionally, the Chapter 13 option can prevent creditors from pursuing your assets.
Credit Counseling Course
Whether you’re filing for Chapter 7 or 13, you must take a credit counseling course to qualify. After completing the course, you have six months to file.
The counseling course is short, and you can take the course online or over the phone. When finished, you’ll receive a completion certificate. Include this certificate with your bankruptcy documents.
Collect Your Documents
You must complete bankruptcy forms that will ask questions about your financial history. Overall, you’ll include the following information:
- Large financial transactions within the past two years
- Itemization of all your current income avenues
- Notation of all monthly living expenses
- All secured and unsecured assets
To answer all of these questions, gather your most recent pay stubs, financial statements, and tax returns. If you don’t have last year’s tax return, you can use your most recent tax return. You should also gather any documents pertaining to mortgages, car loans, as well as other debts.
Since filling out bankruptcy forms is meticulous and time-consuming, you should consider hiring a bankruptcy attorney for assistance. They can streamline the bankruptcy process for you and help you find the information you need.
It’s imperative to be as accurate as possible when completing these forms. Errors can result in delays or dismissals.
Upon completing the documents, print them out to submit to the courthouse. You can either mail the documents or submit them in person.
- Note: The fee to file a Chapter 7 bankruptcy is $338 in Nebraska. You can ask the court to pay in installments, but you may have to pay at least $75 upfront.
Submitting the documents in person will help avoid delays. If you submit the documents in person, the clerk can bring errors to your attention.
The Means Test
What exactly is a means test? Let’s say you’re choosing to file for Chapter 7 bankruptcy. Before you file, you have to pass a means test to see if you’re eligible.
The courts will assess your financial profile from the past six months to see if you can file for Chapter 7 or 13. Then, they will compare your income to the median income in Nebraska.
If you fall below the median income, you’ll qualify for the Chapter 7 route. If you exceed the median, further means testing will be conducted to see if you qualify for Chapter 7. If you don’t, you may qualify for Chapter 13.
When the courts receive your paperwork, a trustee will handle your case. An official notice will list the name of the trustee.
Make sure that you have all of your paperwork in order (i.e. financial statements and tax returns) for the trustee. Moreover, follow all of the trustee’s instructions. Failure to do so can result in a case dismissal.
Take Another Bankruptcy Course
You must take a second course that teaches how to budget and manage your finances. Like the credit counseling course, you can take this course online or over the phone. When finished, save your completion certificate for the courts.
The 341 Meeting
The 341 meetings will finalize your case. The court will notify your creditors, and they can show up and ask further questions about your bankruptcy case. Plus, the trustee may have additional questions for you.
Creditors rarely show up to these meetings, and the session usually lasts around 10 minutes. When showing up to the meeting, bring two forms of ID to speed up the process, including your financial statements. If all goes well, the court will officially discharge all your debts two months after the meeting.
Declaring Bankruptcy in Nebraska the Right Way
To declare bankruptcy in Nebraska, you should hire a bankruptcy attorney right away. They can hasten the process and ensure that you don’t make any errors.
Completing the bankruptcy forms is the hardest part of filing for bankruptcy. A lawyer will help you submit all paperwork on time, prepare you for 341 meetings, and help you understand what happens after a Chapter 13 discharge.
Discuss your case with a highly experienced lawyer to find the best path. Call Husker Law at (402) 415-2525 today!