Skrupa Law Office, LLC is a firm focused on bankruptcy, so we know how to handle your situation professionally and in a timely manner in order to put you at ease during the process. We have filed more bankruptcies than any other firm in Omaha and we can help you as well. At Skrupa Law we strive to keep you updated on all the law changes, so nothing comes as a surprise to you during a bankruptcy. For example, Nebraska bankruptcy judges recently changed the law concerning auto liens and bankruptcy.
Prior to the change in law a person could file bankruptcy and have a title loan avoided if the vehicle was worth less than the loan amount and the value of the vehicle could be exempted under the “Tool of the Trade” exemption. The “Tool of the Trade” exemption could be used if the person simply used their vehicle to commute to and from work.
The new law states that the person filing for bankruptcy cannot use the “Tool of the Trade” exemption to avoid a nonpossessory, non-purchase–money security interest in a vehicle unless the vehicle is used for or in conjunction with the person’s job. For example, a person who uses his/her truck to plow snow for income can claim the exemption, whereas a person who uses his/her truck to commute to and from work cannot claim the exemption in order to avoid a lien.
Example Bankruptcy Case Study
In the case of Gregory and Kimberly Cardwell, the couple signed a lien on their two vehicles to the bank as collateral in order to get a new loan, but soon after they had to file for bankruptcy. Their bankruptcy attorney made a motion to avoid the liens because the loan amount exceeded the value of the vehicles and he believed the vehicles were exempt under the “Tool of the Trade” exemption since the Cardwells used the vehicle to commute to and from work. The judge denied the motion and ruled that the vehicles were not a “Tool of the Trade” for purposes of the lien avoidance statute because the vehicle was not used for or in conjunction with the Cardwells’ jobs. The couple only used their vehicles as transportation to and from work and not to do their jobs.
Exceptions to the Auto Lien Law
Under the new law you cannot use the “Tool of the Trade” exemption to avoid liens unless you use your vehicle for or in conjunction with your job. However, you can still use the “Tool of the Trade” exemption to help keep your vehicle from being seized by the Bankruptcy Trustee if you use the vehicle to commute to and from work.
Contact Skrupa Law Attorneys in Omaha at (402) 999-0247
Skrupa Law Office, LLC is a bankruptcy law firm focused on helping you through the stress of filing for bankruptcy. If you are not sure how to handle the possibility of losing your car or property in bankruptcy, contact Skrupa Law today to find out your possible options. If you have any questions or concerns about bankruptcy or auto liens, our Omaha office number is (402) 999-0247. If you’re located in Lincoln feel free to call the office there at (402) 464-3311. We will help you to our best abilities.