Find Bankruptcy Lawyers Near You in Lincoln, NE

The typical cost for hiring a bankruptcy lawyer in Lincoln, Nebraska for a Chapter 7 case ranges from $1,200 to $2,500, depending on the complexity of your assets, debts, and whether you own a home or business. For a Chapter 13 case, attorney fees are higher, generally between $3,000 and $5,000, because the lawyer must draft a repayment plan and manage the case over three to five years. Many lawyers offer payment plans, allowing you to pay the fee in installments before filing, and some accept credit cards. The court filing fee is separate: $338 for Chapter 7 and $313 for Chapter 13, which can also be paid in installments with court approval. For those with very limited income, Legal Aid of Nebraska provides free legal assistance to qualifying individuals. This information is general and does not constitute legal advice; you should consult with a qualified bankruptcy lawyer in Lincoln to discuss your specific situation and costs.

Bankruptcy law provides a legal pathway for individuals and businesses in Lincoln, Nebraska to address overwhelming debt and obtain a fresh financial start. The most common forms of consumer bankruptcy are Chapter 7 and Chapter 13, while Chapter 11 is typically reserved for business reorganizations. Chapter 7, often called liquidation bankruptcy, requires the debtor to surrender non-exempt assets to a trustee, who sells them to pay creditors. In exchange, most unsecured debts are discharged within three to six months. This option is best suited for individuals with limited income and few valuable assets, such as those living paycheck to paycheck or facing medical debt. Chapter 13, by contrast, is a reorganization plan for individuals with regular income who can afford to repay a portion of their debts over three to five years. It allows debtors to keep their property, including homes and vehicles, while catching up on missed mortgage or car payments. Chapter 11 is more complex and expensive, designed for businesses or high-income individuals with debts exceeding Chapter 13 limits; it involves a court-approved restructuring plan. For most Lincoln residents, the choice between Chapter 7 and Chapter 13 hinges on income, asset value, and the nature of the debts.

Nebraska has specific bankruptcy exemption laws that determine what property you can keep when filing for Chapter 7. Unlike some states, Nebraska requires its residents to use state exemptions rather than the federal exemption system. The Nebraska homestead exemption allows you to protect up to $60,000 of equity in your primary residence, or $120,000 for married couples filing jointly. This amount is modest compared to some states, so Lincoln homeowners with substantial equity may need to consider Chapter 13 to avoid losing their home. For vehicles, Nebraska exempts up to $5,000 of equity in one motor vehicle. There is also a wildcard exemption of $5,000 that can be applied to any personal property, such as cash, jewelry, or household goods. Additionally, Nebraska law exempts necessary clothing, household furnishings, tools of the trade up to $5,000, and certain retirement accounts like IRAs and 401(k)s up to a reasonable amount. These exemptions are codified in Nebraska Revised Statutes Sections 25-1552 through 25-1564. It is critical to work with a Lincoln bankruptcy lawyer who understands how these state-specific exemptions interact with your assets to maximize what you can keep.

The means test is a critical calculation that determines whether you qualify for Chapter 7 bankruptcy. This test compares your current monthly income to the median income for a household of the same size in Nebraska. As of 2024, the median annual income for a one-person household in Nebraska is approximately $61,000; for a two-person household, it is about $78,000; for a three-person household, roughly $95,000; and for a four-person household, around $113,000. If your income is below the median, you automatically pass the means test and can file for Chapter 7. If your income exceeds the median, you must complete a detailed calculation of your disposable income after subtracting allowed expenses, such as housing, food, transportation, and taxes. If your disposable income over five years is less than $8,175, you still qualify for Chapter 7. If it is between $8,175 and $13,650, you may qualify depending on the percentage of debt owed. If it exceeds $13,650, you are presumed to have enough income to repay creditors and must file for Chapter 13 instead. This test is designed to prevent higher-income debtors from abusing Chapter 7. A Lincoln bankruptcy lawyer can help you accurately compute these figures and determine your eligibility.

Filing for bankruptcy triggers an automatic stay, which immediately stops most creditor collection actions, including phone calls, wage garnishments, lawsuits, and foreclosure proceedings. This protection gives you breathing room to reorganize your finances. The timeline from filing to discharge varies by chapter. For Chapter 7, the process typically takes three to four months: you file the petition, attend the meeting of creditors (also called the 341 meeting) about 30 days later, and receive your discharge approximately 60 to 90 days after that. For Chapter 13, the timeline is longer: you file the petition, propose a repayment plan, attend the 341 meeting, and then make monthly payments for three to five years before receiving a discharge. Before you can file, you must complete two mandatory courses: a pre-filing credit counseling session from an approved agency within 180 days before filing, and a post-filing debtor education course before your debts are discharged. These courses cost between $10 and $50 each. Failure to complete either course can result in your case being dismissed. Your Lincoln bankruptcy lawyer will provide you with a list of approved agencies and deadlines.

The costs of bankruptcy in Nebraska include court filing fees and attorney fees. As of 2024, the filing fee for Chapter 7 is $338, and for Chapter 13 it is $313. These fees are set by federal law and must be paid to the court, though you may request to pay in installments. Attorney fees in Lincoln for a simple Chapter 7 case typically range from $1,200 to $2,500, depending on the complexity of your assets and debts. For Chapter 13, attorney fees are higher, usually between $3,000 and $5,000, because the case involves a multi-year repayment plan and more court oversight. Many Lincoln bankruptcy lawyers offer payment plans, allowing you to pay the attorney fee in installments before filing. Some lawyers also accept credit cards, though this may incur additional fees. For those with very low income, pro bono resources are available through organizations such as Legal Aid of Nebraska, which provides free legal assistance for qualifying individuals. You can also find low-cost clinics through the Nebraska State Bar Association or local law schools. It is important to note that you cannot pay an attorney with funds from a credit card advance or loan that you intend to discharge in bankruptcy.

Life after bankruptcy involves both challenges and opportunities. A Chapter 7 discharge remains on your credit report for 10 years from the filing date, while a Chapter 13 discharge stays for 7 years. During this time, you can begin rebuilding your credit by obtaining a secured credit card, making all payments on time, and keeping credit utilization low. Many lenders are willing to extend credit to post-bankruptcy borrowers, though interest rates may be higher initially. It is also important to understand that not all debts are dischargeable. Student loans are generally not dischargeable unless you can prove undue hardship, which is very difficult to do. Most tax debts from recent years, particularly income taxes less than three years old, are also not dischargeable. Child support and alimony obligations cannot be discharged, nor can debts arising from fraud or willful injury. Debts for personal injury caused by drunk driving are also non-dischargeable. A Lincoln bankruptcy lawyer can review your specific debts to identify which ones may survive the bankruptcy. With careful planning and disciplined financial habits, you can rebuild your credit score and achieve long-term financial stability after bankruptcy.