Nebraska Bankruptcy Exemptions
Small businesses and the Nebraska bankruptcy exemption policy of trustees
Small business owners may profit from the Nebraska bankruptcy exemptions. If the business is owned by an individual, the trustee may continue to operate the business for a short period, so long as the trustee considers continued operation to be in the best interests of the debtor, creditors and the estate. In practice, when outstanding accounts are due and payable, the trustee may pay mortgages until collecting amounts owed. Small business owners have an opportunity to work with the trustee, collect outstanding cash, and reduce debts which are secured by exempt property.
Small business options
Rather than liquidate through Chapter 7, many small business owners choose Chapter 13 which does not limit the time for continued operation. The debtor retains control, and may apply cash collections to the reduction of debts secured by exempt property so long as payments are made in the regular course of business. Prepayments are not allowed, yet unsecured creditors may remain unpaid while continuing payments on secured debts. Then, if the best interest of the estate would be better served under Chapter 7, debtors may convert Chapter 7 to Chapter 13 at anytime.