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Bankruptcy Homestead Exemption Updated in Nebraska

Protect Home Equity with Bankruptcy Homestead Exemption in Nebraska 2014

Protect Home Equity with Bankruptcy Exemption

Nebraska Legislature Expands Protection of the Homestead but other bills fail to pass

Previously, certain individuals could not protect the equity in their house if they encountered financial trouble in Nebraska.   (Please see my earlier bankruptcy exemption blog from January 23, 2013) In general, the old law allowed only the Head of the Household or individuals 65 years of age or older the ability to protect their equity up to $60,000.  However, starting July 18, 2014, every homeowner, regardless of marital status or age, will be afforded the full $60,000 protection!

For a historical perspective, the following is a comparison between the old and new Nebraska bankruptcy exemption statutes:

NEW LAW:

40-105. Homestead; selection; procedure.

When an execution for the enforcement of a judgment obtained in a case not within the classes enumerated in section 40-103 is levied upon the lands or tenements of a claimant, the claimant may at any time prior to confirmation of sale apply to the district court in the county in which the homestead is situated for an order to determine whether or not such lands or tenements, or any part thereof, are exempt as a homestead and, if so, the value thereof.

Source:Laws 1879, § 5, p. 58; R.S.1913, § 3080; C.S.1922, § 2820; C.S.1929, § 40-105; R.S.1943, § 40-105; Laws 1947, c. 153, § 1, p. 420; Laws 2010, LB907, § 2; Laws 2014, LB964, § 2.
Effective Date: July 18, 2014

OLD LAW:

When an execution for the enforcement of a judgment obtained in a case not within the classes enumerated in section 40-103 is levied upon the lands or tenements of a head of a family or an unmarried person age sixty-five or older, such person may at any time prior to confirmation of sale apply to the district court in the county in which the homestead is situated for an order to determine whether or not such lands or tenements, or any part thereof, are exempt as a homestead and, if so, the value thereof.

Credits

Laws 1879, § 5, p. 58; Laws 1947, ch. 153, § 1, p. 420; Laws 2010, LB 907, § 2, eff. July 15, 2010.
Codifications: R.S. 1913, § 3080; C.S. 1922, § 2820; C.S. 1929, § 40-105; R.S. 1943, § 40-105.

Other proposed 2014 bankruptcy exemption changes were defeated

Unfortunately, two other proposed changes to the Nebraska Bankruptcy Exemptions were defeated in 2014.  Specifically, Legislative Bills 962 and 963 of the 103rd Nebraska Legislature second session were not passed.  These bills, had they been passed, they would have increased the amount of personal property that a person being sued or filing bankruptcy could have protected from a creditor or bankruptcy Trustee.

Questions and comments are always welcome!

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