Nebraska bill aims to protect residents from being sued over small amounts of debt

Jan 31, 2017

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A bill being proposed in the Nebraska Legislature would protect Nebraskans from being sued over just a few hundred dollars in debt.

As ProPublica reports, a Nebraska lawmaker has introduced a bill that would curb what collectors can take from debtors after filing suit and obtaining a court judgment.

The bill would protect the first $2,000 in a debtor’s bank account from garnishment and would prevent debtors with children from having to go to court to keep more of their paychecks. It would also lower the default garnishment amount from 25 percent to 15 percent and shift the burden to collectors to file sworn affidavits that debtors have no dependents in order to take the full 25 percent.

Unpaid medical debt can also land someone in jail in Nebraska. Collectors have the power through the court to summon a debtor for a “debtor’s exam,” which allows them to ask questions about any income or assets. If the debtor doesn’t show up, an arrest warrant can be issued for contempt of court, and judges routinely issue such warrants, said Milo Mumgaard, executive director for Legal Aid of Nebraska.

The new bill seeks to prevent similar situations by raising the standard under which debtors can be considered in contempt of court.