Federal Bankruptcy Court in Nebraska

The federal bankruptcy court system in Nebraska operates as a specialized division of the federal judiciary, handling debt relief and reorganization cases under Title 11 of the United States Code. This page covers the court's structure, jurisdiction, the major bankruptcy chapters available to Nebraska filers, and the procedural framework governing cases. Understanding how this court functions is essential for interpreting Nebraska's broader legal landscape, including its relationship to federal district court proceedings and state-level debt-related law.

Definition and scope

The United States Bankruptcy Court for the District of Nebraska is a unit of the U.S. District Court for the District of Nebraska (28 U.S.C. § 151). Bankruptcy courts are Article I courts — meaning judges are appointed by the circuit court of appeals rather than by the President with Senate confirmation, a structural distinction from Article III courts. The District of Nebraska operates as a single bankruptcy district, with courthouses in Omaha and Lincoln as the primary locations for hearings and filings.

Scope and coverage: This page addresses federal bankruptcy proceedings governed by Title 11 of the U.S. Code and administered within Nebraska's geographic boundaries. State court debt-collection actions, state receivership proceedings, and Nebraska probate administration (addressed under Nebraska probate and estate law) fall outside the federal bankruptcy court's direct authority. Nebraska state law governs certain exemptions available to bankruptcy filers — specifically, Nebraska Revised Statutes §§ 25-1552 through 25-1563 define property exemptions — but the court applying those exemptions is federal. Tribal lands and sovereign entity issues (see Nebraska tribal courts) also involve distinct jurisdictional questions not resolved by federal bankruptcy jurisdiction alone.

The court's authority derives from the Bankruptcy Reform Act of 1978 as codified in Title 11, and its procedural rules are governed by the Federal Rules of Bankruptcy Procedure promulgated by the U.S. Supreme Court under 28 U.S.C. § 2075. Local rules specific to the District of Nebraska supplement those federal rules and are published on the court's official website at neb.uscourts.gov.

How it works

Federal bankruptcy cases in Nebraska follow a structured procedural framework from petition to discharge or dismissal. The process unfolds in discrete phases:

1. Petition filing — A debtor (or, in involuntary cases, creditors) files a petition with the bankruptcy court clerk. Filing triggers an automatic stay under 11 U.S.C. § 362, immediately halting most collection actions, foreclosures, and wage garnishments against the debtor.
2. Trustee appointment — The U.S. Trustee Program, a component of the U.S. Department of Justice, appoints a trustee appropriate to the case chapter. Region 13 of the U.S. Trustee Program covers Nebraska (28 U.S.C. § 581).
3. Meeting of creditors (341 meeting) — Required under 11 U.S.C. § 341, this non-judicial meeting allows the trustee and creditors to question the debtor under oath about assets, liabilities, and financial affairs.
4. Claims administration — Creditors file proofs of claim; the trustee or debtor may object. Priority categories established by 11 U.S.C. § 507 govern the order of payment.
5. Plan confirmation or asset liquidation — Depending on the chapter, debtors either submit a repayment plan (Chapters 11, 12, 13) for court confirmation or a trustee liquidates nonexempt assets (Chapter 7).
6. Discharge or dismissal — A successful case concludes with a discharge order extinguishing qualifying debts under 11 U.S.C. § 524. Cases may be dismissed for non-compliance with court requirements.

Appeals from bankruptcy court decisions go to the U.S. District Court for the District of Nebraska or, by agreement, directly to the Eighth Circuit Court of Appeals under 28 U.S.C. § 158.

Common scenarios

Four principal bankruptcy chapters account for the overwhelming majority of cases filed in Nebraska:

Chapter 7 (Liquidation): The most frequently filed chapter nationally and in Nebraska. A trustee collects and liquidates nonexempt assets, distributing proceeds to creditors. Debtors must pass a means test established by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), comparing household income against the Nebraska median income threshold published by the U.S. Trustee Program. Chapter 7 cases typically conclude within 4 to 6 months of filing.

Chapter 13 (Individual repayment plan): Available to individuals with regular income whose unsecured debts are below $465,275 and secured debts below $1,395,875 (figures subject to periodic adjustment under 11 U.S.C. § 109(e) and published in the Federal Register). Debtors propose a 3- to 5-year repayment plan, retaining assets while making structured payments.

Chapter 11 (Business reorganization): Used primarily by corporations, partnerships, and high-debt individuals. The debtor typically operates as a "debtor in possession" and proposes a reorganization plan subject to creditor voting and court confirmation. The Small Business Reorganization Act of 2019 created Subchapter V of Chapter 11, streamlining reorganization for businesses with debts under $7.5 million (threshold temporarily raised under the CARES Act; the current operative ceiling is set by statute and updated periodically).

Chapter 12 (Family farmer and fisherman): A chapter specifically designed for family farmers and family fishermen with regular annual income. Nebraska's significant agricultural sector makes Chapter 12 a relevant filing option; eligibility requires that more than 50% of gross income derive from farming or fishing operations (11 U.S.C. § 101(18)). This chapter intersects with Nebraska agricultural law on matters of farm asset exemptions and land retention.

Decision boundaries

Several threshold determinations govern whether a case proceeds and under which chapter:

Means test eligibility (Chapter 7 vs. Chapter 13): If a debtor's current monthly income exceeds the Nebraska median, the means test under 11 U.S.C. § 707(b) applies. A presumption of abuse arises if disposable income after allowed deductions exceeds the statutory threshold, potentially barring Chapter 7 access.

Automatic stay scope and exceptions: The stay is automatic but not absolute. Exceptions enumerated in 11 U.S.C. § 362(b) exclude criminal proceedings, certain domestic support actions, and regulatory enforcement by governmental units. Serial filers — debtors who filed and had cases dismissed within the prior year — receive a limited 30-day stay under § 362(c)(3).

Exemption elections: Nebraska debtors must choose between the federal exemption schedule (11 U.S.C. § 522(d)) and Nebraska's state exemptions (Nebraska Revised Statutes §§ 25-1552 through 25-1563). Nebraska has not opted out of the federal exemptions, so this election is available — a contrast to the 36 states that have opted out and require use of state exemptions only.

Dischargeability of specific debts: Not all debts are dischargeable. Student loans, most tax debts within 3 years of filing, domestic support obligations, and debts arising from fraud are excepted from discharge under 11 U.S.C. § 523. Creditors seeking to except a debt from discharge must file an adversary