Don't Miss These Deadlines

With an economic downturn on the horizon, there is likely to be a high rate a default on credit cards, home mortgages, and car loans. Nebraskans will need to know what deadlines that they must pay attention to in order to avoid an emergency or disaster.

Answering Lawsuit. You have 30 days from being served with a lawsuit to file a response. If you miss this deadline, the plaintiff (creditor) bringing the lawsuit, can obtain a default judgment and move forward with garnishing your wages and/or your bank accounts. The Nebraska Supreme Court provides a general answer and denial for you to prepare and file with the court.

Claiming Exemptions. If a creditor obtains a judgment against you and moves forward with garnishing your bank account, you should receive a Notice to Judgment Debtor. You have to move swiftly having only 3 business days from receiving the notice to request a hearing to determine if the account is exempt. In Nebraska, you have a $5,000 wildcard exemption to protect a bank account, meaning if you have $5,000 or less in your account it is fully exempt (protected).

Trust Deed Foreclosure. Most foreclosures in Nebraska are completed pursuant to the Nebraska Trust Deed Act, meaning that the creditor/lender does not have to initiate a court action to foreclose. The lender simply has to file a Notice of Default with the Register of Deeds for the county where the Deed of Trust is filed. The lender will send that Notice by certified mail to the borrower. The lender then has to wait 30 days after filing the Notice of Default before publishing notice of sale, which has to run for five (5) consecutive weeks. Once the sale takes place, there is no right of redemption in Nebraska.

Right to Cure Car Loan. The lender has to provide written notice to the borrower that the borrower has 20 days to cure the default from borrower's failure to make a required payment. If the default is not cured, then the borrower can accelerate the loan, making the entirety of the loan due, and pursue repossession. The lender is not required to provide the same notice and the borrower has no right to cure.

Instead of worrying what will come next, meet with a bankruptcy attorney to discover your options tailored to your situation. Patino Law Office is a boutique bankruptcy firm located in Omaha, Nebraska providing services statewide.

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Contactless Bankruptcy

In Nebraska, it is possible to file for bankruptcy without meeting your attorney in person. That is because now you can make your way through the entire process virtually. I call this the new era of contactless bankruptcy. Gone are the days of providing paper copies of bills, paychecks, and bank statements. You can now accomplish all of that using either secured email or a client portal. Gone are the days of making payments with cash or check. You can now easily make a secured online payment with a debit card or eCheck. Gone are the days of signing a large stack of paper documents. You can now review and sign documents electronically.

If you or someone you know are thinking about filing for bankruptcy, but are hesitant because you are nervous to leave your home or go to an office building, then contactless bankruptcy is designed just for you. You still have the personal direct support and guidance of an attorney. You can become debt free from the safety and comfort of your home.

The process of a contactless bankruptcy is easy and straightforward:

1. Schedule consultation online 24/7.
2. Meet with attorney telephonically or via web conference.
3. Retain attorney by making payment online with debit card or echeck.
4. Provide paperwork using a secured client portal.
5. Review and sign paperwork digitally using a tool like Docusign or DocHub.
6. Appear at court hearing telephonically.
7. Receive bankruptcy discharge to become debt free.

Chapter 12 Bankruptcy In Nebraska

New Chapter 12 Bankruptcy Law to Help More Farmers

In the fall of 2019, Congress passed the Family Farmer Relief Act of 2019, which increased the debt limit for Chapter 12 bankruptcy. This law financially benefits family farmers in Nebraska. The amount of debt a family farmer may have to qualify almost doubled to $10,000,000.

Factors for Farmers to Consider

Expanding eligibility means that more family farmers are likely to look to Chapter 12 bankruptcy as a viable solution. For the Nebraska family farmer debating a whether to file bankruptcy, here are some factors to consider:

1. You can’t find a lender for the 2020 season, but you might be able to operate on current or incoming cash from sale of grain, cattle, machinery, equipment, or insurance checks.
2. Your bank is unwilling to refinance your debt and you have little to no equity.
3. You want to let go of low performing land leases that lose you money.
4. You intend to sell land, machinery, or equipment and anticipate a large capital gains tax bill from the IRS.
5. You attempted mediation, but it went nowhere.
6. You co-signed, guaranteed or pledged assets as collateral on a family member’s farm debt and that family member has defaulted or filed bankruptcy.

Filings on the Rise!

And know that you are not alone! In 2019, there were 40 Chapter 12 bankruptcy cases filed in Nebraska. This is the highest number of filings since the 55 filed in 2003.  These cases have steadily been on the rise with 8 filed in 2015, 12 in 2016, 20 in 2017, and 27 in 2018. The new law may result in a record number of filings in Nebraska during 2020.

Deciding whether to file a bankruptcy is a complex and emotional decision. Finding the right attorney to work with you is crucial. Instead of worrying what will come next, meet with a bankruptcy attorney to discover your options for your financial situation.

Learn more about Chapter 12 Bankruptcy Eligibility

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The Head and the Heart: A Holistic Approach to Bankruptcy

We are here to help. It is a sound bite that I wholeheartedly include in many emails and conversations with clients. It is not merely a slogan or a marketing ploy. In many instances, a client is coming to us at his or her lowest point, faced with having to file bankruptcy to deal with insurmountable debt. As a bankruptcy attorney, I am here to empower the client on the path forward, providing support beyond what is required to comply with the bankruptcy laws.

In my practice, I am here for clients experiencing the joys of babies being born and for the heartbreaks of the passing of a loved one. I am here to see bankruptcy clients as more than just a bucket of debt. People seeking bankruptcy relief crave stability, clarity, and ease. This is all accomplished through providing a bankruptcy practice that provides a heart-centered process. In the end, the law is the law, but it is how a client experiences legal support that makes the real impression.

Bankruptcy is a tough legal process to navigate on your own because of the technical requirements and the legal customs that only a practitioner can know and appreciate. To assist clients as they navigate the process, we have developed a bankruptcy framework that is consistent, but at the same time highly adaptable to specific needs (be that legal or otherwise).

Initial Consultation. The bankruptcy process begins with a free consultation with one of our bankruptcy attorneys. Our client service manager works with you to schedule the appointment. During the consultation, the attorney hears your story and educated on the solutions available to you.

Hiring Attorney. After the consult, the bankruptcy attorney will collaborate with our client service manager to determine a fee tailored to your situation. If you decide to move forward with your bankruptcy, you will pay the attorneys fees and bankruptcy filing fee.

Bankruptcy Drafting. Once you have hired the firm, you will receive a comprehensive list of information and documentation specifically needed for your bankruptcy team to draft the bankruptcy paperwork.

Review and Sign Appointment. Once your bankruptcy paperwork is drafted, your bankruptcy attorney will meet with you to review it to ensure accuracy and that you understand the paperwork that will be filed on your behalf.

Bankruptcy Court. Your bankruptcy attorney will attend the bankruptcy court hearing with you. It is important to us that you feel supported and comfortable going to court.

Deciding whether to file a bankruptcy is a complex and emotional decision. Finding the right attorney to work with you to make that decision is crucial. Instead of worrying what will come next, you should meet with a bankruptcy attorney with a heart to discover your options for dealing with your financial situation.

When to File Chapter 13 Bankruptcy in Nebraska

Figuring out when is the best time to file for Chapter 13 bankruptcy doesn’t have to be hard. In many situations, the person dealing with financial distress has been trying to figure out how to handle their debt for months or even years. The person is constantly juggling money, deadlines, and how they’re going to get it all accomplished. Chapter 13 bankruptcy exists as a solution to allow people in Nebraska to consolidate debt and handle it all in one place at one time. The creditors get dragged into the bankruptcy system and must partake in the 3-5-year repayment plan.

There are some factors to evaluate when figuring out whether Chapter 13 bankruptcy is a viable solution for the financially distressed Nebraskan.

1. Good Income, But Not Enough. You always pay your debt on time, but you run into a situation where you never get ahead. The Debt continues to grow with no sign of stopping. On paper, you make good income, but it is not enough to pay down your debt or to build any savings. The Chapter 13 bankruptcy is largely based upon your disposable monthly income or excess monthly income, basically the amount of money you have left over ever month after considering general living expenses.
2. Temporary or Permanent Reduction of Income. You were out of work for a short period of time or now have taken a new job with a significant pay cut. Your income no longer stretches as far as it used to, and you have fallen behind on your bills. You do not have an ability to catch up or get ahead.
3. Behind on Mortgage or Car Loan. For whatever reason, divorce, job loss, death of a love one, etc., you have fallen behind on your mortgage or car loan. You’ve tried to complete the loss mitigation packet with your mortgage company and have gotten nowhere. You’ve tried to work out a deal with your car lender, but they want too much. The Chapter 13 bankruptcy allows you to cure the arrears, the amount you have fallen behind in your 3-5-year repayment plan.
4. Tax Debt. You have recent income tax debt or other tax debt that you cannot afford to resolve through a repayment plan. You can resolve your tax debt by handling it through a Chapter 13 bankruptcy.
5. Status Quo Keeps You in Debt Cycle. Iusually spend some time comparing the Chapter 13 bankruptcy with the alternative, which is the status quo. I call it the “do nothing” approach. You always have the option of doing nothing other than what you’re currently doing. However, there is typically no clear light at the end of the tunnel with this option. For example: I had a client who was faced with $2,500 per month in minimum monthly payments. In a Ch. 13 she was able to repay 100% of her debt through a 5-year repayment plan making monthly payments of $1,000 and will be debt free at the end of the Chapter 13 plan.
6. Asset Retention. In a Chapter 13 bankruptcy, you keep your property. The plan is funded through post-filing excess/disposable income. Pause before you start liquidating your retirement accounts or other assets before considering Chapter 13 bankruptcy as a viable solution to handle your debt. I have seen countless times where a client liquidates assets to handle debt when they could have retained the asset and still handled the debt.
7. Accelerated Debt Recovery. If you successfully complete your repayment plan, you are debt free in 3-5 years. That is a much better situation than paying minimum payments on credit cards indefinitely. I frequently am asked, “how will bankruptcy negatively impact me?” I usually respond with the fact that a Chapter 13 bankruptcy puts you in a better position financially quicker than if you were trying to resolve this with another non-bankruptcy solution.
8. Creditors Must Participate. The bankruptcy automatic stay, the provision in the bankruptcy laws that protects you, prohibits creditors from attempting to collect a debt directly from you. What that means is that all the phone calls, collection efforts, and lawsuit stop. The general unsecured creditors (i.e. medical bills, credit cards, consolidation loans, etc.) must file a claim within 70 days of your case being filed in order to participate in the distribution. If they snooze, they lose. Also, it is a lot easier to deal with all your creditors in one place instead of scattered all over the place.
9. Stop Garnishments. The garnishment laws in Nebraska allow for 15% to 25% of your gross adjusted wages to be garnished. For some people, this involuntary repayment of debt causes you to default on your other debt such as your house or car. It creates a domino effect. You can get into a Chapter 13 to stop the garnishment and propose a repayment plan based upon your budget as opposed to an unforgiving percentage of your income.

Deciding whether to file a bankruptcy is a complex and emotional decision. Finding the right attorney to work with you to make that decision is crucial. Instead of worrying what will come next, you should meet with a bankruptcy attorney to discover your options for dealing with your financial situation.

Expanded Eligibility for the Financially Distressed Family Farmer

Congress passed a new law to increase the debt limit for Chapter 12 Bankruptcy, which will benefit financially distressed family farmers in Nebraska obtain bankruptcy relief. Under the new bankruptcy law that just went into effect, the Family Farmer Relief Act of 2019, the amount of debt a family farmer may have to qualify for a Chapter 12 bankruptcy almost doubled to $10,000,000.

For family farmers who are in financial distress, this change opens the doors to a viable bankruptcy solution. Previously, when a family farmer in Nebraska didn’t qualify for a Chapter 12 bankruptcy because he or she exceeded the debt limit, there was few other viable bankruptcy solutions.

This typically meant that the only bankruptcy solutions the Nebraska family farmer could utilize was either the Chapter 11 or Chapter 7. The Chapter 11 bankruptcy may work well for some larger family farming operations but works poorly for many smaller family farms. This has to do with the requirement that family farmers end up having to pay back all the debt in full, which is infeasible for many cash strapped farmers. The Chapter 7 may work well for a family farmer looking to orderly liquidate assets and obtain a discharge, eliminating legal obligations on debts, but not for the farmer that is looking to continue farming in Nebraska.

The ongoing trade war with China has impacted the Nebraska farming industry tremendously. Add that to flooding and low grain/cattle prices and Nebraska family farmers are bracing for disaster.

Expanding Chapter 12 bankruptcy eligibility to more family farmers, hopefully means that more family farmers will look to Chapter 12 bankruptcy as a viable solution to reorganize.

1. Capital Gains Tax. Outside of Chapter 12 bankruptcy, capital gains tax from sale of farm assets (machinery equipment) and arguably end products (grain, cattle, etc.) is a priority unsecured debt, which means the family farmer must pay it in full. In a Chapter 12, those same taxes are considered a general unsecured debt, meaning that the family farmer may only pay a pro rata or percentage of the debt based upon amount of disposable income or equity in property.
2. Cure Defaults. Through a confirmed Chapter 12 plan, the family farmer can cure defaults of secured debt in order to retain property such as equipment, machinery, and land.  
3. Controlled Sale of Assets. In many situations, the family farmer uses the Chapter 12 bankruptcy to downsize operations, selling assets and tapping into equity to pay down debt and to operate on. Using the Chapter 12 bankruptcy, the family farmer can avoid the fire sale or having to sell an asset at a less than ideal time.
4. Designed to keep family farms intact. The Chapter 12 exists specifically to provide family farmers with a bankruptcy solution tailored to their unique needs.
5. Opportunity to Pay Unsecured Creditors Less than 100%. In some instances, the family farmer may be able to pay general unsecured creditors (i.e. credit cards, vendors, suppliers, medical debt, etc.) less than 100% of the debt owed through the 3-5 year Chapter 12 bankruptcy plan.  

Deciding whether to file a bankruptcy is a complex and emotional decision. Finding the right attorney to work with you to make that decision is crucial. Instead of worrying what will come next, you should meet with a bankruptcy attorney to discover your options for dealing with your financial situation.