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Bankruptcy Exemptions in Nebraska- Part III | The WILDCARD

Nebraska Bankruptcy WildcardThe WILDCARD exemption in Nebraska bankruptcy cases


Nebraska law provides a wildcard exemption for any personal property except wages.  Personal property is generally defined as anything that is not real estate or wages.  In Nebraska, each debtor in bankruptcy receives a $2,500 wildcard exemption that may be used to protect any personal property.  The specific language of the wildcard exemption is found at Neb. Rev. St. § 25-1552:

Each natural person residing in this state shall have exempt from forced sale on execution the sum of two thousand five hundred dollars in personal property, except wages. The provisions of this section do not apply to the exemption of wages, that subject being fully provided for by section 25-1558. In proceedings involving a writ of execution, the exemption from execution under this section shall be claimed in the manner provided by section 25-1516. The debtor desiring to claim an exemption from execution under this section shall, at the time the request for hearing is filed, file a list of the whole of the property owned by the debtor and an indication of the items of property which he or she claims to be exempt from execution pursuant to this section and section 25-1556, along with a value for each item listed. The debtor or his or her authorized agent may select from the list an amount of property not exceeding the value exempt from execution under this section according to the debtor’s valuation or the court’s valuation if the debtor’s valuation is challenged by a creditor.

In a JOINT bankruptcy case (Husband and Wife file together), each WILDCARD exemption may be used together

To explain further, a husband and wife may each use their $2,500 together, i.e., $5,000, to protect whatever personal property that they so choose.  For example, if a couple owns a boat valued at $5,000, then that asset can be protected in a Nebraska bankruptcy because each debtor can use their “wildcard” exemption toward the protection of that asset.  The usage of the wildcard exemption is quite flexible.  They can be added together AND the exemption can normally be used to provide additional protection to other assets (that are protected by another exemption).  As an example, Nebraska allows individuals who use their vehicle to commute to and from work or use their vehicle during work to protect up to $2,400 (Neb. Rev. St. § 25-1556(4)).  Since the wildcard exemption is so flexible, you can add $2,500 (wildcard) to the $2,400 vehicle exemption to protect up to $4,900 of equity in the vehicle (in a one-debtor case).  In a joint Nebraska bankruptcy case, you can protect up to $7,400 ($5,000 + $2,400).  In short, the Nebraska wildcard exemption is extremely useful in protecting personal property in a Nebraska bankruptcy proceeding.

Nebraska’s Bankruptcy Wildcard exemption protects a variety of assets

In addition to tangible assets, such as cars, furniture and other assets that you can touch and feel, the Nebraska wildcard exemption also protects intangible assets like bank accounts, contract rights, account receivables and other similar assets.  It is very common to use this bankruptcy exemption to protect bank balances, tax refunds and household goods and furnishings.  In essence, this is the bankruptcy exemption in Nebraska that normally fills in the blanks when there is no other specific exemption that applies.  To be sure, there are limitations to this exemption, but bankruptcy attorneys in Omaha and elsewhere in Nebraska use this specific statutory exemption the most and for a good reason.

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