Bankruptcy in Nebraska (2026): Exemptions & Means Test

Filing bankruptcy in Nebraska means following one set of property rules: Nebraska has opted out of the federal bankruptcy exemptions, so filers must use Nebraska's own exemption statutes in the Nebraska Revised Statutes and the state constitution. Bankruptcy itself is federal, but the exemptions that decide what you keep, and the means-test income that decides which chapter you can use, are state-specific. Nebraska recently doubled its homestead exemption, so the figures below are current as of mid-2026, and you should confirm the latest amounts before relying on them.

This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.

Does Nebraska use state or federal bankruptcy exemptions?

Nebraska has opted out of the federal exemption system. Under Neb. Rev. Stat. 25-15,105, the federal exemptions in 11 U.S.C. 522(d) are rejected by the State of Nebraska, which elects to retain the personal exemptions provided under Nebraska statutes and the Nebraska Constitution for any bankruptcy petition filed in Nebraska. In plain terms, a debtor domiciled in Nebraska must use the state exemptions. The menu of federal bankruptcy exemptions is not available here. About two-thirds of states have opted out in this way.

Even though the federal exemption schedule is off the table, a Nebraska filer may still claim the federal nonbankruptcy exemptions preserved by 11 U.S.C. 522(b)(3). Those include things like Social Security benefits, certain veterans' and federal-employee benefits, and tax-exempt retirement accounts. Married couples filing jointly can generally each claim a full set of the Nebraska exemptions for personal property, though the homestead is generally treated as a single household exemption.

Nebraska homestead exemption

Nebraska's homestead exemption is the headline protection for homeowners, and the Legislature recently doubled it. Under Neb. Rev. Stat. 40-101, as amended by LB 1195 effective July 18, 2024, a natural person residing in Nebraska may exempt a homestead not exceeding $120,000 in value, up from the prior $60,000. The exemption covers the dwelling house in which the claimant resides, its appurtenances, and the land on which it sits.

The statute limits the size of the protected parcel. Outside an incorporated city or village, the homestead may include up to 160 acres. Within an incorporated city or village, the claimant may instead select a quantity of contiguous land not exceeding two lots. The exemption protects equity, so the value is measured after subtracting mortgages and other liens. Because the $120,000 figure was set by statute rather than indexed, it changes only if the Legislature amends the law, so confirm it is current before filing.

Homestead protection covers equity, not the full value of the home. A residence worth far more than the mortgage plus the $120,000 exemption can leave non-exempt equity that a Chapter 7 trustee may reach, which is one reason homeowners with substantial equity often look at Chapter 13 instead.

Vehicle, wildcard, and personal-property exemptions

Nebraska's personal-property exemptions are spread across several statutes. The headline is a $5,000 personal-property wildcard under Neb. Rev. Stat. 25-1552, which protects up to $5,000 in personal property (other than wages) for each natural person residing in Nebraska, with no requirement to forgo a homestead claim. This wildcard is the main way renters and homeowners protect a car, a bank balance, or household items.

Other key personal-property exemptions include:

• Tools, implements, or professional books used in the debtor's principal trade, up to $5,000 (motor vehicles excluded), plus a separate $5,000 motor-vehicle exemption, both under Neb. Rev. Stat. 25-1556.
• Household furniture, household goods, and personal effects, with statutory limits.
• Clothing actually used by the debtor and family.

Nebraska provides a stand-alone $5,000 motor-vehicle exemption under Neb. Rev. Stat. 25-1556(1)(e), and vehicle equity beyond that can often be covered by the $5,000 wildcard under 25-1552. Wages are protected too: under Neb. Rev. Stat. 25-1558, a head of family keeps at least 85 percent of disposable earnings and other workers keep at least 75 percent. A separate floor in 25-1558(1)(b) limits garnishment to the amount by which weekly disposable earnings exceed thirty times the federal minimum hourly wage, so a low earner can have nothing garnishable at all. Tax-qualified retirement accounts are protected under separate Nebraska exemptions and federal law.

The Chapter 7 means test in Nebraska

The means test screens who can file Chapter 7. The first step compares your household's current monthly income, annualized, to the median family income for a Nebraska household of the same size. If your income is at or below the Nebraska median, you generally pass and may proceed with Chapter 7. If it is above the median, you complete the longer calculation that subtracts allowed expenses to see whether you have disposable income that should fund a Chapter 13 plan instead.

The U.S. Trustee Program publishes the median figures and updates them periodically. For cases filed on or after April 1, 2026, the Nebraska median family income is:

Add $11,100 for each additional person beyond four. These figures apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises the median income data roughly twice a year, so confirm the current numbers for your filing date.

Chapter 7 vs. Chapter 13 in Nebraska

Chapter 7 is a liquidation. A trustee can sell non-exempt property to pay creditors, but because Nebraska's homestead now protects up to $120,000 of home equity and the $5,000 wildcard covers personal property for every filer, many Chapter 7 cases are "no-asset" cases where nothing is sold. Most remaining unsecured debt, such as credit cards and medical bills, is discharged in a few months.

Chapter 13 is a reorganization for filers with regular income. You keep your property and repay some or all of what you owe through a three-to-five-year plan. Chapter 13 is often chosen by Nebraska homeowners who are behind on a mortgage or who have home equity above the $120,000 homestead, because the plan can spread out missed payments and stop a foreclosure while you catch up.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362. The stay immediately halts most collection activity, including foreclosure sales, wage garnishment, repossession, and collection calls, while the case proceeds.

Where you file bankruptcy in Nebraska

Nebraska is a single federal bankruptcy district. The U.S. Bankruptcy Court for the District of Nebraska has staffed offices in Omaha and Lincoln and holds proceedings for western Nebraska residents in North Platte. Because there is only one district, every Nebraska filer uses the same court, with the office or hearing location depending on where you live. Before filing, federal law requires you to complete an approved credit-counseling course, and you must complete a debtor-education course before your debts are discharged.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a car loan or mortgage continue if you want to keep the collateral and keep paying.

Because the homestead recently changed and the choice between Chapter 7 and Chapter 13 depends on your full financial picture, many people consult a licensed Nebraska bankruptcy attorney before filing.