Nebraska Supreme Court Clarifies Homestead Claims and Limits Foreclosure to Debtor’s Share

11819 Miracle Hills Drive v. Ali, 322 Neb. 710 (2026)

11819 Miracle Hills Drive, LP (“Miracle Hills”) obtained a money judgment against Maman Lawan Ali for breaching a commercial lease. Miracle Hills then sought to collect the judgment through foreclosure of Ali’s one-half interest in the home he owned with his wife. His wife had not signed the lease. Thus, the judgment ran against Ali alone.

Ali argued Nebraska’s homestead statutes protected his home from foreclosure. The district court nevertheless ordered a sale unless Ali paid the debt within 20 days. Ali appealed.

The Nebraska Supreme Court overturned the foreclosure. Nebraska’s homestead laws protect homeowners from forced sales to collect debts.  

The homeowner must claim homestead protection by filing an application with the district court clerk.[1] At least ten days before any hearing, the homeowner must also give the creditor a copy of the application and a notice explaining when and where the court will hold the hearing.[2]  

The Supreme Court held Ali had failed to file the application to claim that protection. Ali thus could not claim the protections under the homestead statutes.

The Supreme Court, however, found plain error in the judgment against Ali. The judgment never affected the one-half interest held by Ali’s wife. The district court thus lacked jurisdiction to force a sale of the entire “Real Property.”                                           

The Supreme Court also faulted the district court for letting Miracle Hills choose who would conduct the sale. That is the district court’s decision. Because of these errors, the Supreme Court set aside the sale order and sent the case back for further proceedings. 

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Attorneys at Baird Holm LLP have experience assisting with real estate transactions, litigation and foreclosures. Please reach out with any questions.

Hannes D. Zetzsche
Drew D. Majcen