BANKRUPTCY

Iowa Chapter 7 Bankruptcy Attorney

A voluntary bankruptcy case is a legal proceeding started by a debtor asking for some type relief specifically provided for by the federal bankruptcy code. Almost always the relief sought is debt relief and protection from creditors.

For individuals, two types of relief are typically used. The most popular is liquidation under Chapter 7 of the Bankruptcy Code. In a liquidation case, which is sometimes referred to as a straight bankruptcy, any substantial non-exempt assets of the debtor are converted to cash and distributed to creditors according to certain rules. The individual debtor ordinarily receives a discharge, which frees him or her from any responsibility to pay most debts and also provides various other protections. Most Chapter 7 cases are non-asset cases enabling debtors to keep all of their property throughout the bankruptcy case.

Chapter 7 liquidation allows a debtor to discharge or liquidate their unsecured debts at the conclusion of the case. However, the term Chapter 7 bankruptcy is often misunderstood. As a result there are a lot of myths about what a Chapter 7 is or what is permitted in a Chapter 7 bankruptcy proceeding. Some of the common myths out there are you cannot keep your home or your car in a bankruptcy. This is generally not true. It cannot stop a foreclosure on your home; that is another myth which is not necessarily true. Or you cannot discharge certain types of medical debts. Again these are all myths that are generally not true. A Chapter 7 enables the debtor to relinquish or discharge all types of unsecured debt provided they meet the qualifications for that type of discharge.

Chapter 7 bankruptcy has given many people the “fresh start” they need to get their financial affairs back on track. In recent years, those filing for chapter 7 bankruptcy protection has diminished somewhat, however Chapter 7 continues to be the chapter most often used and provides the help many debtors are seeking.

The Criteria Of Qualification For A Chapter 7 Bankruptcy

Often time’s people have misconceptions about what is needed to file for Chapter 7 bankruptcy protections. Any person residing, domiciled, or having property or a place of business in the United States may file a petition to start a chapter 7 bankruptcy case. To be eligible, the individual must, with certain limited exceptions, have completed a credit counseling course from an approved budget and counseling agency within the 180 days before filing the bankruptcy petition. This course is often available online and varies in price from ten dollars up to around fifty dollars. A person need not be broke to file for chapter 7 protections. A person, whether a citizen or not, may file a bankruptcy case even if the person does not reside in the United States, as long as the person has assets in the United States. Also, it is important to note that in limited circumstances a chapter 7 case may be dismissed by the court for “abuse,” and an individual whose income is above certain standards is subject to a means test to determine whether there is what the rules term “a presumption of abuse” based on the debtor’s ability to repay his or her creditors.

An individual is not eligible to file a for Chapter 7 protection of the bankruptcy code if, within the preceding 180 days, (1) they were the debtor in a bankruptcy case dismissed for willful failure to abide by orders of the court or to appear before the court in proper prosecution of the case or (2) they requested and obtained a voluntary dismissal of a bankruptcy case following filing of a request for relief from the automatic stay provided by under the bankruptcy code. Also, if you have already received a discharge in a Chapter 7 bankruptcy, you must wait eight years from the date you filed the previous case before you can file another Chapter 7 and receive a discharge. 

For more information on Chapter 7 Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (515) 451-1260 today.

Iowa Chapter 13 Bankruptcy Attorney

A Chapter 13 bankruptcy is akin to a payment plan however, unlike most payment plans, a Chapter 13 payment plan may not require you to pay all of your debt off. Under the Chapter 13 payment plan the debtor will pay off some of the past-due and current debts over 36 to 60 months. At the conclusion of the payment plan period, the remaining debts are discharged similar to a Chapter 7 proceeding. Unlike a Chapter 7 proceeding, you don’t have to turn over non-exempt property as the debtor will pay the value of the property during the payment plan period. One of the most important aspects of a Chapter 13 case is it will permit the debtor to keep valuable property such as a home and car and other secured property the debtor wants to keep. Also, it allows the debtor to cure a default on a mortgage or car loan over the payment plan period. Additionally, a debtor may be able to modify secured loans if the terms are very harsh.

The Criteria Of Qualification For A Chapter 13 Bankruptcy

Similar to Chapter 7 bankruptcy, the debtor must take a pre-filling credit counselling course from an approved provider within a 180 days or six months of filing. An individual debtor must have what we call a regular income sufficiently stable and regular to enable such a person to make payments under the plan. However unlike a Chapter 7 to be eligible to file Chapter 13, an individual must not have debt over, the last figure was $394,000 of non-contingent liquidated unsecured debts, or over $1.1 million of non-contingent liquidated secured debts. Also an individual may not be eligible to file for Chapter 13 protection if they had a bankruptcy case dismissed with in the previous six months.

What Types Of Debt Can Be Discharged Under A Chapter 13 Bankruptcy?

Upon completion of all payments under the plan, the debtor will be entitled to a discharge. The discharge relieves the debtor of all debts provided for in the plan, except for certain debts specifically disallowed by the bankruptcy code. Like a Chapter 7 discharge, alimony or child support, certain taxes, and secured debts are not dischargeable. The debtor must certify that any domestic support obligations are current or paid in full before a discharge is allowed. Although the discharge in a Chapter 13 case is many times broader than a Chapter 7 case, however, there are still debts that are not dischargeable such as:

Long-term debts with final payments due after completing the plan cured in the plan such as a mortgage;

Debts incurred through false pretenses or fraud;

Certain tax debts;

Debts not listed in the bankruptcy;

Debts for fraud as a fiduciary;

Domestic support obligations;

Most student loan debts;

Certain drunk driving debts;

Certain criminal fines and restitution orders;

Debts for damages awarded in a civil action because of willful or malicious conduct by the debtor that caused personal injury or death.

What Assets Is Someone Allowed To Retain In A Chapter 13 Bankruptcy?

In Chapter 13 bankruptcy, you’re allowed to keep all of your property. You might have to pay back more of the un-secured debts during your Chapter 13 plan if you have nonexempt assets. Also, if one plans on keeping secured property, you must keep paying on that secured asset such as a home or a car.

The Major Difference Between A Chapter 7 And A Chapter 13 Bankruptcy

In a Chapter 7 proceeding, you are asking the bankruptcy court for immediate relief with the goal of discharging or liquidating all of your non-secured debts you owe to obtain a ‘fresh start’. Usually, Chapter 7 cases are non-asset cases allowing the debtor to keep all of their assets throughout the proceeding.

In a Chapter 13 proceeding, you are asking the bankruptcy court to set up a payment plan to pay back all or a portion of your debts over a period of time. The amount you have to repay depends on how much your income relative to the types of debts you owe, how much property you own and so forth.

For more information on Chapter 13 Bankruptcy In Iowa, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (515) 451-1260 today.