Iowa Bankruptcy Information
Whether a Chapter 7, Chapter 13 or Bankruptcy Alternative, an Iowa bankruptcy lawyer can help take the guesswork out of the legal process, giving you the resources and information you need to make the best decision for you and your family.
Chapter 13 Bankruptcy in Iowa
Filing Chapter 13 Bankruptcy may be a good option for individuals who do not pass the means test or who have property and assets they would like to keep. Unlike Chapter 7 Bankruptcy, Chapter 13 Bankruptcy will not automatically discharge your debt, but will force you to repay some or all of your debt through a 3 to 5 year repayment plan.
An Iowa Bankruptcy Lawyer will file your bankruptcy petition and all proper Chapter 13 bankruptcy forms and will work with you to develop your bankruptcy repayment plan. At the end of your 3 to 5 year debt repayment plan, all qualifying debt will be discharge.
Certain assets will be exempt from the Chapter 7 Bankruptcy or Chapter 13 filing bankruptcy process. Exempt assets are outlined at the federal level through the federal bankruptcy exemption list. Many states, however, have constructed their own list of bankruptcy exemptions and may allow you to choose between the federal or state list. Certain states will require you to use the state exemption list. In the state of Iowa, you are not allowed to choose the federal exemptions and you must use the State of Iowa Bankruptcy Exemptions.
Chapter 7 Bankruptcy in Iowa
Chapter 7 Bankruptcy is the least expensive, the quickest and the most common type of bankruptcy. The first step in Chapter 7 Bankruptcy is to meet with a bankruptcy lawyer in Iowa who will review your financial situation.
If you decide filing Chapter 7 Bankruptcy with attorneys is your best option, an Iowa attorney will file your bankruptcy petition and a Statement of Your Financial Affairs in the appropriate Iowa Bankruptcy Court. These forms will identify your creditors, the amount and type of debt you owe, your income and expenses and your property you own. Fortunately, filing the bankruptcy petition will provide you at least a temporary \"automatic stay\" which will delay debt collection efforts. Chapter 7 may not halt collection efforts all together. Efforts may continue if a Bankruptcy Judge decides there is \"cause\".
A trustee will be assigned to your bankruptcy case and will sell your assets and use the money from the sale to pay your creditors. Priority creditors will be paid first according to federal bankruptcy law. At the completion of the Chapter 7 Bankruptcy process, which is usually four to six months, your qualifying debt will be discharged. Dischargeable debt can include hospital expenses, unsecured personal loans and credit card debt. Corporations, married couples, individuals and partnerships all may qualify to file Chapter 7 Bankruptcy.
In 2005 under the Bankruptcy Abuse Prevention and Consumer Act (BAPCA), it became more difficult for most individuals to qualify for Chapter 7 Bankruptcy. Under the BAPCA, you must pass an income test. The income test will determine if your median income is below other residents in the state of Iowa. If it is below, you probably will be able to file Chapter 7 Bankruptcy, if it is above, additional \"means testing\" will need to be done. Means testing will subtract certain expenses from your income such as your house payment, car payment, certain amount of school tuition and taxes owed. If your remaining income allows you to pay $6,000 or $100 per month toward debt in the next 60 months, you may not qualify for Chapter 7 Bankruptcy. If you fail this test, but you can still pay up to 25% in debt repayment, you may not qualify for Chapter 7.
The goal of the new legislation is to require more individuals to have to repay their debt. The BAPCA also requires credit counseling prior to filing bankruptcy and completion of a financial management course prior to the dismissal of your debt.