Bankruptcy & Foreclosure in Nebraska
In Nebraska, most home foreclosures start with the mortgage company filing a Notice of Default with the Register of Deeds in the county where the home is located. The homeowner then receives the Notice of Default by certified mail. Thirty (30) days after mortgage company files the Notice of Default, it will, through its attorney, publish a Notice of Sale for a minimum of five consecutive weeks. The home is then sold at a foreclosure auction.
This process, called a Trust Deed Foreclosure, is quick because Nebraska state law does not require that your mortgage company file a lawsuit to foreclose as there is not right of redemption. This means that once the foreclosure sale takes place, you cannot reinstate or take back ownership of your home.
A Chapter 13 bankruptcy can be a useful tool if you wish to retain your home. As long as the bankruptcy is filed prior to the foreclosure sale, you will be able to retain your home by paying the mortgage arrearage through a Chapter 13 bankruptcy repayment plan. In Nebraska, you will also be required to make your regular monthly mortgage payment.
For example: You were unemployed for eight months and could not pay your mortgage. You are now $8,000 behind and you have received the Notice of Default. You are now back to work and have started making regular mortgage payments. Because of your current income, you do not qualify for a loan modification. Coming up with $8,000 to bring your loan current is not in your budget. You can file a Chapter 13 bankruptcy, stop the foreclosure, and cure your $8,000 mortgage arrearage through a 3-5 year plan.
If you are facing a foreclosure and do not wish to retain your home because you owe more than it is worth, it needs costly repairs, or you can no longer afford the mortgage payment, filing a Chapter 7 or Chapter 13 bankruptcy can protect you from the risk of your mortgage company suing you for potential deficiencies.