Written by Upsolve Team.
Updated September 15, 2020
In October of 2018, the Nebraska Tourism Commission revealed its new slogan to the public - “Nebraska - Honestly, it’s not for everyone.” This cheeky nod to the fact that Nebraska is a unique state populated by unique people is, quite honestly, true. No one place is the right place for everyone. The same can be said when it comes to bankruptcy. While this is the best debt relief solution available for many Americans, it isn’t the right debt management strategy for everyone.
Bankruptcy can serve as a powerful tool to help you take control of your financial life. To know whether bankruptcy is right for you, you have to understand how it works. There aretwo types of bankruptcy that may be good options for you if you’re not a small business owner, Chapter 13 and Chapter 7. The basic premise of bankruptcy is that you make a list of all your creditors, give that list to the Bankruptcy Court, and the first thing that the Court does in response to your petition is notify your creditors that they must stop trying to collect debts from you. In a Chapter 13 bankruptcy, the Court will give you time to propose a repayment schedule to pay back some of the money that you owe. Generally, Chapter 13 bankruptcy cases resolve after 3-5 years of repayment. After that repayment is successfully completed, the remainder of your eligible debts will be erased.
By contrast, in a Chapter 7 bankruptcy in Lincoln, there is no repayment plan. Your debts are divided into secured and unsecured. Secured debts are those debts that are tied to some asset, like a car or a house, that may potentially be repossessed by your creditor if you fail to remain current on your account. As a general rule, you can’t get rid of secured debts in a Chapter 7 bankruptcy unless you are willing to return the asset. Unsecured debts are debts like credit cards, medical bills and payday loans. These are the debts that you can have discharged by filing a Chapter 7 bankruptcy inLincoln. For most people, the Chapter 7 bankruptcy process will take anywhere from 3 to 6 months from start to finish. A lot of that time is spent waiting for hearings and for the discharge order to be issued. One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit. Yes, bankruptcy does result in a temporary hit on your credit. However, the impact of continually late or missed payments, and maxed out credit cards is often more detrimental to an individual’s credit score than a bankruptcy filing is. There are agencies that can work with you for free to help you decide if bankruptcy is right for you. Because honestly, it’s not for everyone.
Lincoln Bankruptcy Lawyers - Estimated Cost
Once you have decided that you may benefit from filing for Chapter 7 bankruptcy in Lincoln, the next big decision you have to make is whether or not you want to hire a lawyer. The cost of a bankruptcy lawyer varies, but the attorneys’ fees stemming from a Chapter 7 bankruptcy in Lincoln will probably cost you between $1,100 and $1,200. You can call around to different lawyers and ask about their fees, however, choosing a lawyer is a really important decision and cost shouldn’t be the most important factor in your decision, whenever possible. You should meet with a lawyer in person) before you commit to hiring them. Many lawyers offer a free consultation, and you should take advantage of that opportunity when it is made available. Making a list of your questions to take with you on your free consultation is also a good idea. There are no dumb questions. If you are concerned or confused about anything, the free consultation is a great time to ask about anything you like. Make sure to ask any questions that you may have about the process, and what services are included in the fee that you’ve been quoted. For example, find out whether your fee includes your Court filing fees and/or your mandatory pre-filing credit counseling class. Finally, you should also use your consultation to get a “feel” for the lawyer and whether you can work together successfully.
How to File Bankruptcy in Lincoln, Nebraska for Free
Filing for Chapter 7 bankruptcy in Lincoln will take some time and effort but it is possible to do so successfully, with or without the assistance of an attorney. You must collect your Nebraska bankruptcy documents, fill out the bankruptcy forms, take some court-approved classes and attend a meeting of creditors.
Collect Your Lincoln Bankruptcy Documents
Now that you have decided that filing bankruptcy in Lincoln is a good option for you, you can start the process by pulling together the documents that you will need to reference as you fill out your bankruptcy paperwork. You will need (at minimum) the last 60 days’ worth of pay stubs. In the age of direct deposit, you may not have copies of your actual pay stubs. The easiest way to get them is to reach out to your employer’s human resources or payroll department. They can normally provide you with as many months’ worth as you need. You will also need your most recent tax returns. You should go back to the accountant that filed the return for you. If you are unable to reach them for some reason, or you filed without an accountant, you can still get a copy of the tax transcript directly from the IRS. You will also need your credit reports from all three credit reporting agencies. It’s important to get all three reports when filing a Nebraska bankruptcy because some creditors won’t appear on some reports and it is important that you list all creditors in your filing. Another important set of documents you’ll need access to are copies of old debt account statements. While most debts will show up on your credit report, not all creditors report the activity of their account holders in a timely manner. That doesn’t mean they won’t try to collect on the debt if you don’t list them as creditors in your bankruptcy filing.
Take Credit Counseling
Before filing bankruptcy in Lincoln, you are required to complete a court-approved credit counseling course. Most people take the course online. However, if you really want to have a live class with a live professor, there is an approved company in Omaha that offers a live class: Credit Advisors Foundation. They are located at 1850 South 72nd Street Omaha, NE 68124. They offer classes in English and Spanish and their phone number is 1-800-625-7725. There are a lot of companies that offer the course online though. Just make sure that the company you’re working with appears as an approved provider on the Justice Department’s website, or your participation in the course won’t “count” for the purposes of your bankruptcy filing. The first part of the credit counseling class will have you recreate your monthly budget. The goal is to analyze your spending and expenses and suggest ways to increase your disposable income. The course will also go over some of the most common reasons that individuals experience trouble when dealing with debt. Another important goal of the class is to make sure that you hae considered all of your options before you commit to bankruptcy.
Complete the Bankruptcy Forms
The most difficult and time-consuming part of filing bankruptcy in Lincoln involves filling out your forms. The bankruptcy forms are designed to give the Court a full picture of your finances. The forms ask about your current income, your past income, what property you own, what debts you have, etc. The questions are not particularly difficult, but answering them does take patience and diligence.
One of the most important forms that you will fill out is actually not a formatted “form” that asks a lot of questions. It’s the creditor matrix, which serves as a list of people and companies that you are indebted to. You put the list together yourself using your credit reports and old bills. The reason that this document is so important is that before you can get rid of a debt in bankruptcy, your creditor needs to receive notice of your Nebraska bankruptcy. For example, let’s say ABC Moving moved you into your new house 5 years ago and you still owe them $3,500.00. You file for bankruptcy and forget to include ABC Moving on your creditor matrix. Your bankruptcy goes through fine, but then a year from now, you start getting collection letters from ABC Moving because they didn’t know about your Nebraska bankruptcy. Generally, any creditor not listed on your matrix will remain allowed to collect on their debt.
Get Your Filing Fee
Like most court filings, filing for bankruptcy generally requires the submission of a filing fee. The filing fee contributes to running the Court and paying personnel. The filing fee for a Chapter 7 Nebraska bankruptcy is $335.00. Finding an extra couple of hundred dollars while you’re in the middle of a financial crisis may seem impossible. However, you can petition the Court to pay your filing fee in installments. The Bankruptcy Court offers a helpfulguide on how to apply to pay your filing fee in installments. If you earn a certain level of income, you may be able to get the fee waived altogether.
Print Your Bankruptcy Forms
If you opt to file for Nebraska bankruptcy without an attorney, you will need to either take paper copies of your forms down to the Lincoln Bankruptcy Court, or mail them. Mailing your documents may seem convenient, but there are some risks you should consider. If there is an error on your filing that causes the Clerk to reject the filing, the documents will be returned to you and you will then need to resubmit them before you can have an active bankruptcy case on file. If you are facing an aggressive creditor, you may not have time for multiple mailings. Once you take the bankruptcy forms and schedules and added in all of your supporting documentation, your bankruptcy packet could be up to 50 pages. If you don’t want to use your home printer to print that much material, you can always go to the public library. Lincoln has several full-service public libraries where you can print your forms. While the public library is usually the cheapest option, you can also use a commercial print shop like Kinkos or Office Depot.
Go to Court to File Your Forms
Once you have everything printed and signed, you’ll take it to the courthouse to file your case. The physical address for the Lincoln Bankruptcy Court is 460 Robert V. Denney Federal Building United States Courthouse 100 Centennial Mall North Lincoln, NE 68508. The phone number is (402) 437-1625. The mailing address for all Nebraska Bankruptcy Courts is tied to an Omaha address: Roman L. Hruska United States Courthouse 111 South 18th Plaza, Suite 1125 Omaha, NE 68102.
As with any federal court, you will need to go through security. Remember to leave anything that could be considered a weapon, including pocket knives and personal pepper spray in your car. After you have cleared security, ask for directions to the clerk’s office. Tell the clerk that you are filing for Chapter 7 bankruptcy and give them all of your documents. They will scan them and give you a Notice of Bankruptcy. Keep your notice in a safe place because you may need it to prove to creditors that you have formally filed for Nebraska Bankruptcy.
Mail Documents to Your Trustee
The Lincoln Bankruptcy Court will mail out notices of your bankruptcy to all of your creditors. However, you are responsible for mailing certain documents to the Trustee assigned to your case. The Trustee is an independent third party, usually an attorney, that is appointed to represent unsecured creditors in your bankruptcy. You will need to mail your tax returns, pay stubs and property tax information to the trustee in preparation for your 341 meeting in addition to any other information they may request. You’ll receive instructions related to this part of the process when the Court assigns a Trustee to your case.
Take Bankruptcy Course 2
You must complete two credit counseling classes before your bankruptcy case will be finalized. The first, or the ‘pre-petition’ class is taken before you file any paperwork with the Nebraska Bankruptcy Court. The second class, or the ‘post-petition’ is taken after you file your paperwork with the Court. Make sure that the company that you choose is also approved to provide both classes. The second class is designed to give help you plan your financial future so that you can avoid filing bankruptcy again. The second course is generally longer than the first one. Once you complete the second class you will receive a certificate that must be filed with the Court.
Attend Your 341 Meeting
If putting together your bankruptcy documents is the most difficult, time-consuming part of a bankruptcy, the 341 meeting is often the most anxiety-inducing part. People often worry that they will run into someone that they know and feel embarrassed. Another common worry is not being prepared to answer the Trustee’s questions. The 341 meeting, or Meeting of Creditors as it is also called, doesn’t have to be scary if you are ready for it. Your Trustee will conduct your 341 meeting. The purpose of the meeting is for your Trustee to verify your identify, clarify any questions about your filing while you’re under oath, and allow any creditors present to ask their own questions. Keep in mind that very few (if any) creditors actually show up for a typical 341 meeting. If you are filing bankruptcy in Lincoln, you can expect to be in the courthouse for less than a couple of hours.
Dealing with Your Car
The final major issue that you will need to deal with during your bankruptcy involves your car. If you still owe money on a car loan, you have a few options available. If you want to keep your car, the Court may permit you to keep it and keep paying for it. This is calledreaffirmation. It means that you agree to continue paying for the car, per the terms of your loan.
If, on the other hand, you think you may want to get rid of your car, you can surrender it. There are several reasons that you may want to get rid of a car: you owe more than it is worth, it needs expensive repairs or you think you can get a better interest rate on a different vehicle loan. Surrendering the car in bankruptcy means that you can not only get rid of the car, but also the debt.
Redemption is another way to deal with your car. When you redeem your car, you buy it from the creditor, usually in one lump sum, for the remaining balance owed (as determined by the car’s actual value). If you and the creditor cannot agree on what the car’s value is, the Court will hold a valuation hearing and set the car’s value. You let the Lincoln Bankruptcy Court know how you want to deal with your car on form B108 – The Statement of Intention. The Nebraska Bankruptcy Court has a reallyhelpful guide available on how to deal with your car in Chapter 7 bankruptcy.
Nebraska Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Lincoln
Nebraska Means Test
Figuring out whether you are eligible to file Chapter 7 bankruptcy in Lincoln involves assessing your income, deductions, and household size in accordance with the Nebraska bankruptcy means test. The means test compares your income to the incomes of similar households in Nebraska to determine whether you qualify for a Chapter 7 bankruptcy in Lincoln.
Median Income Levels for Nebraska
Nebraska Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Nebraska
Nebraska Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Nebraska Bankruptcy Forms
The Nebraska bankruptcy forms are generally the same as the federal forms that are standard across the nation. You can download them and fill them out on your computer, or print them and fill them out by hand. Each form will ask specifically about certain aspects of your finances. Making sure that the information you provide is complete and accurate is one of the most important steps when filing bankruptcy in Lincoln.
Bankruptcy exemptions are the rules that allow you to protect eligible property from creditors. The Nebraska bankruptcy exemptions are different from the federal bankruptcy exemptions. Some states, like Nebraska, choose to give their residents their own set of exemptions, which are listed in the Nebraska Code. Make sure to read through the whole list and take advantage of every exemption that applies to you when filing bankruptcy in Lincoln.