The Nebraska Bankruptcy Court has issued a new opinion extending greater protection to vehicles owned by unemployed debtors. In the case of Angelita Quintero decided on August 22, 2012, the Court expanded the “Tool of the Trade” exemption provided under Neb. Rev. Stat 25-1556(4) which allows up to $2,400 of protection for a vehicle used in a business or used by a debtor to commute to and from work. The Court extended the protection to debtors who are temporarily unemployed and who intend on returning to the workforce.
“In liberally construing the exemption statutes, this court has been receptive to the statutory interpretation that a debtor need not be currently employed in order to claim a tool of the trade exemption in a vehicle, as long as there is evidence the debtor is only temporarily unemployed as of the petition date and intends to resume working.”
In addition to the Tool of the Trade exemption, Nebraska debtors are also able to protect the equity of their vehicle under the “Wildcard” exemption Neb. Rev. Stat. 25-1552 which protects up to $2,500 of any personal property. Thus, debtors are able to combine the Wildcard and Tool of the Trade Exemption and protect up to $4,900 of equity in their vehicle.
The Quintero decision will help many unemployed debtors who were facing the grim prospect of losing their vehicle while searching for a new job.