The COVID-19 virus has caused millions of Americans to file unemployment claims, and the federal government has increased state unemployment benefits by $600 per week though July 2020.

May a creditor garnish unemployment benefits in Nebraska?

Nebraska Statute 48-647 states that “benefits received by any individual, so long as they are not mingled with other funds of the recipient, shall be exempt from any remedy for the collection of all debts, except debts incurred for necessaries furnished to such individual or his or her spouse or dependents during the time when such individual was unemployed.”

Two things stand out in this exemption law.

First, if unemployment funds are mixed in an account with other funds, the protection may be lost.  Second, judgments for new necessaries (i.e., medical debts) incurred after unemployment begins may garnish unemployment funds.


The key thing to protecting unemployment benefits in Nebraska is to keep those payments in a separate bank account.  It appears that many Nebraskans now receive benefits on a debit card called a “ReliaCard.”  Since the funds on this account are not mixed with other funds, the account funds are exempt.  But, if your unemployment funds are deposited into your regular checking account that contains other funds or deposits, you may want to open another account to hold the unemployment funds. When unemployment funds are comingled with other funds, the exemption protection is lost.


What happens if garnishment summons is sent to the bank holding your unemployment benefits? Since the funds are exempt under Nebraska statute 48-647, is the garnishment automatically denied?

No! Even though an exemption law exists to protect unemployment benefits, you must claim your exemption rights and demand a hearing on the garnishment.  Nebraska’s exemption laws are not self-executing.  They exist, but you must file an application with the court to assert those rights.


If your bank receives a garnishment summons, use this form to request a hearing.  Check off on this box: “(1) the funds asked for are exempt from garnishment.”  This form must be filed with the Clerk of the Court.  The address of the court should be on the top of the garnishment summons.  The form must be signed and you should enter the case number on the form.  You can mail this form to the court or bring it directly to the courthouse.


At the same time you file the Request for Garnishment Hearing form, you should also file a form to claim your exemption. Requesting the hearing is not enough.  You must also tell the court what law protects the unemployment benefit.  This Claim of Exemptions Form will should be completed, signed and filed with the Clerk of the Court at the same time you request the hearing.  On that form you will need to write in “Unemployment Benefit Exemption, Nebraska Statute 48-647”.


If you have other funds in a bank account being garnished, the Nebraska Wildcard Exemption of 25-1552 protects account funds of up to $5,000.  Regardless of the source of the deposit–wages, gifts, tax refunds, unemployment, etc,–the Wildcard exemption protects a bank account funds up to $5,000.  For most people that exemption law is all they need.

The problem with Nebraska’s exemption scheme is that it is too complicated to apply.  Yes, we have very good exemption laws, but almost nobody understands how to apply them, and Nebraska judges are often confused and surprised that bank account funds can be protected.  They rarely conduct exemption hearings and frequently deny exemption requests when the funds are clearly protected.  When your local judge does not know how exemption laws work you have a problem.

Are unemployment benefits exempt?  Yes, if you apply for a garnishment hearing and assert your exemption rights.


Image courtesy of Flickr and Sarah Mirk

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Photo of Sam Turco Sam Turco

I was born and raised in Omaha, Nebraska, the 3rd of six children.  We grew up in the meat packing district of South Omaha.  I graduated from Omaha Central High School 1985.

 My wife, Kathy, and I are raising 3 children.   Outside of…

I was born and raised in Omaha, Nebraska, the 3rd of six children.  We grew up in the meat packing district of South Omaha.  I graduated from Omaha Central High School 1985.

 My wife, Kathy, and I are raising 3 children.   Outside of work, I spend a lot of time escorting children to sporting events while trying to sneak in a long bicycle ride on the weekends.

Areas of Practice
  • 100% Bankruptcy Law
Litigation Percentage
  • 5% of Practice Devoted to Litigation
Bar Admissions
  • Nebraska, 1992
  • Iowa
  • U.S. District Court District of Nebraska, 2010
  • U.S. Tax Court