Senators advanced a bill from general file Jan. 8 that would expand bankruptcy exemption provisions that were last modified 20 years ago.
Currently, a person may exempt up to $2,500 of personal property when filing for bankruptcy or resolving a creditor judgment. LB105, introduced by Bancroft Sen. Lydia Brasch, would increase that exemption to $5,000.
While bankruptcy should come with accountability, Brasch said, it should not mean destitution for individuals and families who still must support themselves.
“Debtors should be able to exempt at least as much personal property as they did in 1997,” she said. “The longer the Legislature goes without updating the exemptions, the less the debtors will be allowed to keep for essential needs because of inflation.”
LB105 additionally would increase an exemption for household items from $1,500 to $3,000 and an exemption for business tools and equipment from $2,400 to $5,000. The bill also would provide an exemption for a debtor’s interest in a motor vehicle for up to $5,000.
Omaha Sen. Bob Krist supported the bill, saying that adjusting the exemption limits for inflation is common sense.
“This is something we can do to help people get back on their feet in a proper and fair way,” he said.
Senators advanced the bill to select file 41-0.