Nebraska Bankruptcy Laws

Throughout the towns and cities of Nebraska, there has been a surge of interest in Chapter 7 and Chapter 13 bankruptcy programs as the increasing concerns of Nebraskans about the security of their personal residences and the growing consumer debt loads have brought many households to first look into bankruptcy protection. For generations, Nebraskan borrowers have – with no small amount of pride – depended upon their own families and resented the interference of the federal government, but the rapidly increasing credit card balances and unsecured debt accounts seemingly held by virtually every household throughout Nebraska has effectively forced all consumers worried about their family finances to seek out all information about the various methods of debt reduction. Bankruptcy protection may not contain the same degree of guaranteed success for Nebraska residents as the program once promised even five years ago. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 instituted a number of small changes to the language of the United States Bankruptcy Code which created a rippling effect relevant to any Nebraska household genuinely interested in the liquidation of their credit card debts and similar burdens, but, with compound interest undoubtedly rising, Nebraska borrowers should still endeavor to learn as much information as they can about bankruptcy even if they ultimately decide that such protection wouldn’t be in their family’s best interest over the long run.

To be sure, bankruptcy protection has always carried negative consequences for Nebraska borrowers desperate enough to ask the government to help them in their struggles against mercenary creditors. Even before there were credit reports (much less FICO scores), Nebraskan households knew that there would be a societal stigma attached to essentially admitting that they could not repay debts lawfully taken out, but, at the same point, communities respected the suffering of families beset by catastrophe and credit would still be extended. Employment opportunities, certainly, would not be curtailed. However, under the current circumstances within which Nebraska consumers now exist, the lingering consequences of either Chapter 7 or Chapter 13 bankruptcy could severely compromise the economic possibilities of the filers’ households for up to a decade without recourse. There are a few benefits to modernity which may help to alleviate the more damaging side effects of bankruptcy protection upon credit ratings. Many banks, for example, will offer prepaid credit cards so that Nebraska borrowers who have gone bankrupt could make payments and positively affect their FICO scores after a certain amount of time, and some of the more predatory lenders – the ones that still have weathered, at least, the current credit crunch and industry failures – may provide credit accounts at incredibly elevated interest rates with the understanding that, no matter what, the borrowers would not be able to again declare Chapter 7 debt elimination bankruptcy for years to come. Furthermore, automobile loans and home mortgages may still even be available for Nebraska residents. Once again, however, the interest levels would be murderous for any household to handle, and the Nebraskans that have just gotten out of their debt thicket would hardly want to begin their lives anew with the same sort of problems.

Of course, the gravest threat that Chapter 7 debt liquidation bankruptcy programs have always foretold would be the possible forfeiture of assets to the government for the repayment of the creditors whose debts had been forcibly discharged. Not only does this danger remain, but the trustee chosen by the Nebraska courts to oversee the bankruptcy hearing will – following the recent legislation – have to consider the filers’ estates by means of the theoretical resale value of the borrowers’ various possessions. The repercussions of what seemed to be a relatively miniscule regulation buried within the United States Bankruptcy Code has had dire effects for borrowers attempting Chapter 7 bankruptcy protection throughout America, but the Nebraska consumers still interested in governmental assistance through bankruptcy are rather uniquely aided by a separate round of exemptions that were enacted by the Nebraska legislature. In Nebraska, legal residents declaring Chapter 7 bankruptcy are allowed to keep homesteads below one hundred and sixty acres provided they have less than a certain amount of equity dependent upon recent appraisal value. Household furnishings like dishes, cutlery and furniture are also protected as long as the total amount would be estimated to be below fifteen hundred dollars, and tools of trade and personal property have similar exemptions to their own dollar values (twenty four hundred and twenty five hundred, respectively). In addition, veterans benefits, retirement funds, public assistance compensation, and medically require health aids are left alone. Seventy five percent of disposable earnings (calculated by deducting the monthly bills for utilities, secured debts like home mortgages and vehicle loans, and the average living expenses for Nebraska families assessed by Internal Revenue Service figures) would be exempted, and each Nebraska household would be allowed to claim food and fuel to last for six months.

Better, to be sure, than the deprivations that citizens of other states would suffer by undergoing Chapter 7 bankruptcy, but Nebraskans should still remember that much of the valuations are subjective and purely left to the discretion of whichever court official was chosen by the Nebraska justice department to handle the specific bankruptcy petition. For this reason, it’s become almost mandatory for households seriously thinking about Chapter 7 debt elimination bankruptcy to take advantage of the services of attorneys experienced in both federal bankruptcy law and the local Nebraska exemptions. The paperwork required to file for bankruptcy protection has become so very complicated over the past few years that ordinary families within Nebraska have reported a great deal of trouble attempting to accurately fill out every part of the documentation, and, with their household’s economic future essentially riding upon the results (and, worse yet, potential criminal offenses for Nebraska residents found to have willfully misrepresented their assets or debts), it’s no time to take chances. However, just as the bankruptcy attorneys have become more important to the entire Chapter 7 process and the need for bankruptcy protection has increased throughout our state, the fees charged by efficient bankruptcy lawyers have risen as well, and many of the Nebraska families who most need assistance with the preparation of the bankruptcy forms simply cannot afford the money that the lawyers demand up front for even the initial consultation. Since, after the 2005 legislation, Chapter 7 bankruptcy protection has been strictly limited to only those residents of Nebraska who make less than average earnings of the state as determined by the census department, some economic arbiters reasonably argue that the only borrowers who would still be admitted into the Chapter 7 program do not have the funds available to see it through to a successful conclusion.

Because bankruptcy attorneys cost so very much these days (even avoiding the additional administrative expenses to which modern bankruptcy subjects borrowers), many Nebraskan families have been looking outside the governmental protection to consider other alternatives for the erasure of their credit card debts and other unsecured loans. While Consumer credit counseling programs are largely a marketing scheme dreamt up to convince borrowers to pay enormous amounts of money to unlicensed financial consultants for the organization of their bills, the debt settlement negotiation maneuver has won ever greater popularity among Nebraskans interested in reducing their overall debt load without threatening their household possessions or endangering their family’s credit rating or FICO scores. Debt settlement negotiators actively use the Chapter 7 bankruptcy threat – provided the Nebraska clients fit a pre-determined set of criteria – to shave down the amount of money owed to the creditors. Nebraska borrowers admitted to the settlement program would have to be able to pay back the remaining funds within five years or sixty months so not every resident of our state would be considered appropriate for the services, but, happily, most legitimate settlement companies will talk with Nebraska heads of household free of charge to see whether or not they’d have a good chance of success. For that matter, many of the most effective debt settlement specialists now work primarily from the internet which makes scheduling interviews a breeze. To most Nebraskans, Chapter 7 bankruptcy will remain the first alternative for the elimination of their unsecured debts, but, with the rise of debt settlement negotiation, it’s far from the only one available.

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