In Nebraska, New Bill Proposes Protections Against Rampant Debt Collection

Bill seeks to block collectors from cleaning out debtors’ bank accounts over medical debts of a few hundred dollars.

News Story (Nebraska)

Paul Kiel
January 24, 2017

Tags: Consumer Protection, Debt Collection

Organizations mentioned/involved: Legal Aid of Nebraska


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.

In a recent case handled by legal aid attorneys, a woman was arrested in front of her children for failure to appear at an exam over a $177 medical debt. Since she didn’t have the $100 bail, she spent two hours in a jail cell before her father could arrive with the money. The woman, who works as a waitress, had actually not received notice of the hearing, according to a lawsuit filed on her behalf by Legal Aid of Nebraska against the collector and the state of Nebraska. The suit, which is ongoing, alleges a violation of the state’s century-old prohibition against debtors’ prisons.