Debt Relief
How Does LendingTree Get Paid?

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Nebraska Debt Relief: Your Guide to State Laws and Managing Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

Living in Nebraska comes with a lot of advantages compared to the rest of the country. For example, median home prices from 2013 to 2017 measured by the U.S. Census Bureau were actually 26% cheaper in Nebraska than the U.S. median home value. And median rents there in the same period were lower, too — 21% less, in fact.

As with many other things, though, low costs in one area get balanced out by higher expenses in others. Nebraska residents have higher-than-U.S.-average health care costs. Anyone who has ever faced medical debt knows it’s nothing to envy, and that it’s only one of countless factors that can push you into debt. For example, the agricultural industry is a major employer in the state and it is notoriously fickle.

A lot of things can push people over the edge financially. But if you know the laws surrounding debt collection, and your options for dealing with debt, you can make the best of a bad situation. We’ll show you how to do that in this article, and provide you with Nebraska-specific tips and resources for helping you get out of debt so you can move on with your life.

Debt in Nebraska: At a glance

Nebraska debt
Type Per capita balance, 2018 Rank out of 50 states* U.S. per capita balance
Credit card debt $2,870 30 $3,220
Student loan debt $5,080 31 $5,390
Auto debt $4,160 37 $4,700
Mortgage debt** $25,680 34 $33,680
*No. 1 is the highest
**First-lien debt only
Source: Federal Reserve Bank of New York, March 2019

Debt collection in Nebraska

In an ideal world we’d all pay our debts on time, if possible. Even better, we’d pay off our debts early. However, things can happen that prevent that. If you’re not able to pay your debts, it’s important to understand what will happen and what your rights are.

Unfortunately, many people have been taken advantage of by unscrupulous debt collectors, so knowing the ways in which you’re protected can help ensure that you still come out ahead.

If you don’t pay your debts, your lender may come after you for an extended period. Eventually, they may hire a third-party debt collector or even sell your debt to a debt buyer, to whom you will now owe the money instead of the original lender. As soon as a debt collector or a debt buyer takes control, you now have certain rights under the federal Fair Debt Collection Practices Act (FDCPA).

This act gives you certain protections. Debt collectors cannot lie, harass or threaten you in order to get you to pay up. They also can’t tell anyone else that you’re in debt. Finally, it sets limits on how debt collectors can contact you. Under the FDCPA, debt collectors cannot:

  • Contact you outside of the hours between 8 a.m. and 9 p.m.
  • Contact you at all (with exceptions), if you ask them to stop
  • Contact you instead of your lawyer, if you ask them not to do so
  • Contact you at your workplace, if you ask them not to do so

Some states have passed laws that extend the FDCPA to original creditors, meaning these laws apply to everyone who might try to collect a past-due debt, including the business that originally gave you the loan or credit. However, the state of Nebraska has not done this. Original creditors (i.e., the people to whom you first owed money) are exempt from these laws in the state.

Responding to collection letters

If a debt collector calls you up, it’s important to ask them to send you a debt validation letter listing out the following details:

  • The name and address of the debt collection agency
  • Who the original creditor is, and what the debt is for
  • A breakdown of what is owed, including the original debt, fees and interest

It’s important to get this information in writing so that you have a record of your communication with the debt collector. It’s not uncommon for debt collectors to contact the wrong person about the wrong debt, or for such a call to be an early warning sign of identity theft. That’s why you need to get this information on paper first, so you can take steps to correct it, if necessary.

If you’re able, you can work with the debt collector to repay your debt. You can also request more information, dispute the debt if you don’t actually owe it, or ask the debt collector to stop contacting you entirely. The Consumer Financial Protection Bureau (CFPB) has sample templates that you can use for each of these situations.

One thing that’s not a good idea, however, is ignoring phone calls and letters from debt collectors. If you do, they can sue you. Each debt collector is different and makes its own decisions about whether to take you to court. However, your odds of being sued go up if you owe a large debt (enough to make it worthwhile for them to engage in a lawsuit). Debt collectors may also be more likely to sue if you live in a state that allows wage garnishments, as Nebraska does, to an extent.

If a debt collector is violating any rules, you can report them to the following offices through forms provided on their websites and linked below:

Another option is to sue the debt collector, if they are causing you financial hardship or anguish (at least enough for you to want to take them to court). However, even if a judge does rule in your favor, you still will owe the debt. Winning a case against a debt collector doesn’t erase the original debt.

If you are sued and if a judge rules against you, a few things can happen under Nebraska state law. A debt collector can take:

  • All of the money in your bank account, up to the amount owed.
  • Up to 25% of your after-tax pay through a wage garnishment court order (or 15% of your after-tax pay, if you’re the head of the family).
  • A lien on it up to the last $12,500 worth of equity in your home
  • A lien on your car, up to the last $2,500 worth, which will remain yours.

You are allowed to keep at least six months’ worth of supplies and fuel, $1,500 worth of tools and equipment and $1,500 of miscellaneous personal possessions.

Understanding Nebraska’s statute of limitations

Even though a debt collector is allowed to sue you if you don’t pay up, there still are limits in place. The statute of limitations is how long a debt collector has to sue you to recoup a debt. The length of the statute of limitations varies by state and by what type of debt it is.

In Nebraska, if you don’t pay your credit card bill, for example, a debt collector only has four years from your last payment to sue you. After that time passes, you still owe the debt and debt collectors can come after you for it, but they cannot sue you for it anymore. At this point, it is considered a time-barred debt.

Nebraska Statute of Limitations on Debt
Mortgage debt 5 years
Medical debt 5 years
Credit card 4 years
Auto loan debt 4 years
State tax debt 3 years or more

It’s also important to know that paying anything toward your debt (even just a penny) or agreeing to do so with a debt collector restarts the clock. So if it’s been three years and 11 months since your last credit card payment, you’re only one month away from being protected from a lawsuit — just something to think about.

Nebraska debt-relief programs

It’s often a good idea to work with an attorney, especially if a debt collector takes you to court. But not everyone has that option, or is at a point where an attorney is yet needed. Perhaps you just need help in exploring your options, or developing better money management skills so that you can deal with your debt.

In those cases, a debt-relief program such as a credit counseling agency might be able to serve you better. The National Foundation for Credit Counseling (NFCC) offers a list of non-profit member agencies that can help you out, often for free or at least at an affordable price.  Debt settlement companies may also be able to help you negotiate a payoff plan with your creditors, although it’s important to know that these companies generally charge for their services. You also need to vet these companies carefully to avoid getting into trouble more with an unscrupulous settlement company. Here are a few reputable companies that may be able to help you:

  • National Debt Relief: Provides debt settlement, consolidation and credit counseling services.
  • Freedom Debt Relief: Provides debt settlement services for people who have at least $12,000 worth of unsecured debt, such as credit cards or personal loans.
  • Accredited Debt Relief: Refers you to other debt settlement companies if you have at least $7,500 worth of unsecured debt.
  • New Era Debt Solutions: Provides debt settlement services if you have at least $750 worth of debt for each unsecured debt account.

Payday lending laws in Nebraska

Payday loans are appealing to a lot of people because they’re quick and easy to get, and don’t require a credit score check. These loans are for small amounts (no more than $500 in Nebraska) and for a short term (before your next paycheck, up to a maximum of 34 days in the state) if you happen to run out of money before your next paycheck.

  • Maximum loan amount: $500
  • Maximum loan term: 34 days
  • Finance charges: $15 per $100 borrowed

However, payday loans come with sky-high fees (some as high as a 400% annual percentage rate (APR), compared with around a 15% APR for a typical credit card). Many people also roll paycheck loans over from one paycheck cycle to another, all the while accumulating outrageous fees and getting caught up in a cycle of debt.

That’s why payday loans aren’t recommended. There are many better alternatives to payday loans instead, even if you have poor credit.

However, if you do need to take out a payday loan, it’s important to make sure the lender is licensed in Nebraska. It’s possible that some lenders may use payday lending as a front for identity theft or illegal business practices, as may have happened in the case of Steve’s Payday Loans in Nebraska in 2017, as flagged by the Nebraska Department of Banking and Finance. You can check to make sure a payday lender is licensed on the department website. Select “Delayed Deposit Service” from the dropdown menu to check specifically for payday lenders.

Tips to tackle debt in Nebraska

Many people don’t realize this, but the terms of your debt aren’t necessarily set in stone. There are things you can do to change how you repay your debt, to some extent. This may be more difficult if your debt is in collections because this can harm your credit score (and thus your options for changing your debt), but it may still be possible. If your debt isn’t yet in collections but you’re having a hard time making your payments, it might be well worth your time to consider one of these options.

Consolidate your debt

If you’re paying off more than one debt, you may be able to consolidate your debts so that you’re paying off one single loan. This makes your debt repayment simpler, and you may even be able to qualify for a better rate. For example, if you have several credit cards with balances on them, you may be able to pay them off with a lower-interest-rate personal loan.

It’s important to note that the lowest interest rates typically go to the people with the highest credit scores. If your credit isn’t the best, it may be difficult to get approved for a consolidation loan, or to get a consolidation loan at a lower rate than you’re currently paying.

Additionally, certain loans, such as federal student loans, are best kept separate from your other debt. That’s because these loans come with certain protections, like the option for student loan forgiveness or income-driven repayment plans. You can still consolidate federal student loans, but it’s often a better idea to do it with the federal government rather than a for-profit lender so that you don’t lose these special protections.


If you have a high-interest loan, such as a mortgage or an auto loan, another option is to simply refinance the loan with a lower interest rate. You may be able to refinance student loans as well. If you have federal student loans, however, it’s generally not a good idea to refinance them because you may lose out on certain protections, such as income-driven repayment plans that can help you if you’re having trouble making your payments, or student loan forgiveness programs.  It’s essentially the same thing as consolidating your debt, only you do it with a single loan rather than collapsing multiple loans into a new loan.

When you refinance your loan, you often have the option of extending the loan out for a longer term. So, for example, if you have 20 years remaining on your mortgage, you may be able to refinance for a new 30-year mortgage. This spreads the remaining balance over a longer time period and so your monthly payments may be lower.

This is a bit of an artificial effect, however. In reality, because you’re paying interest each month for a longer amount of time, you may end up paying far more in interest over time than you actually save. This is why it’s always a good idea to use a refinancing calculator to compare the two loans and see not only what your monthly payments might be, but how much the loan will cost you overall by the time you’re finished paying it off.

Use a balance transfer card

If you’re dealing with mounting credit card debt, another option is to use a balance transfer card to pay it off. The balance transfer card strategy works like this:

  • Open a balance transfer card with a lower APR, ideally a 0% APR promotional interest rate (promotional rates must be at least six months in length)
  • Transfer your old credit card balance over to the new balance transfer card
  • Try to pay off the balance before the promotional period runs out

If you have a good enough credit score to qualify for one of these deals and are able to pay off the balance before the promotional period ends (usually within 12 to 21 months), you’ve essentially gotten an interest-free loan. Not having to pay interest on your credit card balance can make it a lot easier to get ahead, because 100% of your payments will be going toward paying down the balance.

It’s not a flawless plan, however. Often, balance transfer cards charge a 3% balance transfer fee — i.e., a small percentage of the amount you’re transferring over — so you do end up paying at least something in fees. Banks may limit these types of cards to people with good or excellent credit. Additionally, if you’re not able to pay off the balance before the promotional period ends, you will have to start paying high interest again unless you go through the whole process another time with a new balance transfer card. This can be a lot of work, but some people are able to pay off their debt successfully with this method.

Filing for bankruptcy in Nebraska

Let’s say you’ve tried all of the options on this list. You’ve tried working with your debt collectors or refinancing or consolidating your debts, to no avail. Maybe you’ve even tried working with a credit counseling or debt relief agency, and your last feasible option is to file for bankruptcy.

Bankruptcy can have long-lasting effects on your financial life, and can stick around for up to 10 years on your credit report. However, if you have limited options,  bankruptcy may be the only way for you to move forward and get past your debt collectors. For many people, it truly is a light at the end of the tunnel when all other routes are closed off.

There are two main types of bankruptcy, and both have different implications. You may be more familiar with Chapter 7 bankruptcy, where a judge orders the sale of your assets, such as your house, car or other possessions. But another, less intrusive option is a Chapter 13 bankruptcy, which essentially is just a three- to five-year repayment plan, after which your remaining debts may be partially or entirely forgiven by a court order.

Again, remember that bankruptcies can stay on your credit report for up to 10 years, though. This can cause a big dip in your credit score, which can also make it harder to qualify for credit until after the bankruptcy drops off your credit report.

You can learn more about filing for bankruptcy in Nebraska on the state’s bankruptcy court website. A bankruptcy isn’t anyone’s idea of a good time, but you should know that it is possible. Eventually, it will fall off your credit report and stop hurting your credit score.

The bottom line

Being stuck in debt is a frustrating experience. Add to that the pressure of debt collectors calling  repeatedly, worries about creditor lawsuits and contemplating bankruptcy, and it can seem insurmountable.

The good news is that while being in debt is never easy, Nebraskans have a lot of protections and options available to them, if they do find themselves in this tough spot. If you’re still able to make your debt payments but you’d like that to be a bit easier, you can consider refinancing or consolidating your debt. If you’re already behind on payments, speaking with a credit counseling agency, knowing your rights with debt collectors and knowing when it’s time to file for bankruptcy can help give you peace of mind.

No matter your situation, Nebraska’s state laws and several federal laws do allow you a way out, as long as you know which route to take.

The information in this article is accurate as of the date of publishing. 


No matter your situation, we'll find the best solution together. Just a few clicks (or taps) away!

Recommended Reading