If you are unable to make ends meet, if you are tired of getting constant calls from creditors asking for money, if you want a fresh start, bankruptcy may be the answer. Making the decision to file bankruptcy is not an easy decision to make. However, in many cases filing bankruptcy is the only answer to deal with a mounting sea of debt. Every year more than a million people make the decision to file for bankruptcy. You should not feel guilty or ashamed about filing bankruptcy. People who file bankruptcy would prefer to pay their bills, but when life throws roadblocks in your way, you need to take action. Bankruptcy may be the answer you have been looking for. Bankruptcy is a multi-step process with many forms and procedures. Our attorneys have the experience necessary to put you at ease. We can help you experience a life debt-free, without the hassle of creditors calling you, harassing you for payment. Call us today for your free consultation:
319-984-5479 or 319-352-1637. We are licensed in both the Northern and Southern Districts of Iowa.
WHAT IS BANKRUPTCY
Bankruptcy is a federal law that allows Americans to get a fresh start by discharging debt they simply cannot pay. Bankruptcy is essential to our free market economy and a key reason we have so many successful Americans, because it enables us to take chances. Bankruptcy is also a great leveler. Wages for most Americans have not kept up with inflation. Bankruptcy is a way to even the playing field and give hard working Americans a chance to start fresh and save for important expenses like home purchase, college and retirement. Without bankruptcy, millions of Americans would struggle needlessly. There are several different types of bankruptcy. Chapter 7 and Chapter 13 are the most common types of bankruptcy.
Chapter 7 Bankruptcy - This is the most common consumer filing. It allows the bankrupt person to retain essential property. Non-exempt property is sold and proceeds distributed to creditors, but in most Chapter 7 Bankruptcy cases there are no assets.
Chapter 13 Bankruptcy - Chapter 13 bankruptcy allows the individual to keep all or some of their assets and work out a schedule for repayments with future income.
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WHAT IS AN AUTOMATIC STAY AND WHY SHOULD I CARE?
One benefit of filing for bankruptcy relief is that it may, although sometimes temporarily, stop a lawsuit. This is accomplished through an automatic stay. Once a bankruptcy petition is filed, the bankruptcy clerk mails notices to all the creditors listed. A creditor is a person or business that loaned you money or extended credit for a purchase. Most creditors are banks, credit card companies, or a business that provided an asset or service with the promise to be paid in the future, such as a hospital. Until the stay ends, creditors cannot call you, send you bills, threaten you, file a lawsuit, or continue with an ongoing lawsuit. Any further harassment by your creditors after they have received notice of your bankruptcy, including further action regarding a lawsuit they may have filed against you, is considered a violation of the automatic stay, and they can be fined for such conduct. However, such violations must be willful. Creditors who were not properly notified of the bankruptcy and continue their collection efforts may not be willful violators since they wouldn't know you had filed. The automatic stay remains in effect from the date your bankruptcy petition is filed to the date your bankruptcy case is closed, dismissed, or a creditor is granted relief from the stay by the court. Where real property is involved, the courts are more inclined to grant relief. For example, a landlord may be allowed to continue eviction proceedings against you for non-payment of rent. Or, your mortgage lender may be allowed to continue foreclosure if your home has little or no equity. Or, your auto leasing company may be allowed to repossess your car if you are far behind in payments and the car still has a profitable resale value. To request relief from the automatic stay, the creditor must file a motion with the bankruptcy, stating the reasons why the relief is necessary. Usually, these motions are heard by the court a few weeks after the motions are filed. Sometimes, as with eviction or foreclosure proceedings, the creditor will seek immediate relief. The automatic stay is a powerful weapon against further action by creditors. However, the automatic stay is temporary, and once your case is over, any creditors whose debts are non-dischargeable can resume their lawsuit, collection, or enforcement proceedings against you.
WILL FILING FOR BANKRUPTCY STOP HARASSING CALLS FROM BILL COLLECTORS?
When we help you file for either type of bankruptcy, we ensure that an "automatic stay" goes into effect and is enforced. The automatic stay prohibits virtually all creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections. Most importantly, once you have retained an attorney (regardless of filing), the creditor will be referred to your attorney.
WILL ALL MY DEBTS BE DISCHARGED?
It depends. Some debts are nondischargeable in both Chapter 7 and Chapter 13. If you file for Chapter 7, these debts are nondischargeable and you will have to pay them in full. If you file for Chapter 13, nondischargeable debts will have to be paid in full during your plan. If they are not, the balance will remain at the end of your case. Examples of nondischargeable debts are the following: child support and alimony, debts for personal injury or death caused by your intoxicated driving, student loans, fines and penalties imposed for violating the law, such as traffic tickets, criminal restitution, and certain tax debts. In addition, the following debts may be declared nondischargeable by a bankruptcy judge in Chapter 7 if the creditor challenges your request to discharge them. These debts may be discharged in Chapter 13. You can include them in your plan, and at the end of your case, the balance may be eliminated: debts you incurred on the basis of fraud, such as lying on a credit application, debts from willful or malicious injury to another person or another person's property, debts from embezzlement, larceny or breach of trust, and debts you owe under a divorce decree or settlement, unless after bankruptcy you would still not be able to afford to pay them or the benefit you'd receive by the discharge outweighs any detriment to your ex-spouse (who would have to pay them if you discharge them in bankruptcy).
WHAT IS A CREDIT REPORT?
Credit reports are compiled by credit bureaus - private companies that gather information about your credit history and sell it to banks, mortgage lenders, credit unions, credit card companies, department stores, insurance companies, landlords and even a few employers. Credit bureaus get most of their data from creditors. They also search court records for lawsuits, judgments, bankruptcy filings, and recorded liens (legal claims). To create a credit file for a given person, a credit bureau searches its computer files until it finds entries that match the name, Social Security number, and any other available identifying information. Credit reports include non-credit data such as names you previously went by, past and present addresses, Social Security number, employment history, marriages and divorces. Credit data includes the names of your creditors, type and number of each account, when each account was opened, your payment history for the previous 24-36 months, your credit limit or the original amount of a loan, and your current balance. The report will show if an account has been turned over to a collection agency or is in dispute.
WILL I LOSE MY HOUSE OR OTHER PROPERTY IF I FILE FOR BANKRUPTCY?
Many people in this circumstance worry about the possible loss of their home as they consider filing for bankruptcy. Though there have been a few situations where a debtor lost his/her home, keep in mind that bankruptcy is not designed to put you out on the street. You lose no property in Chapter 13. In Chapter 7, you select property you are eligible to keep from a list of permitted exemptions, such as equity in your home. In Chapter 7 bankruptcy, whether or not you will lose your house depends on the amount of equity you have in the property and the amount of any homestead exemption (which varies state-to-state) to which you are entitled. If the total amount of debt against your house is less than the market value, you may lose your house unless a homestead exemption entitles you to all or most of the equity. In Texas, this exemption allows you to keep your home regardless of the equity you have in it (with very few exceptions). If you are behind on your mortgage payments, you will almost certainly lose your house if you file a Chapter 7 bankruptcy. Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings. In a Chapter 13 bankruptcy, you will not lose your house if you immediately resume making the regular payments and repay your missed mortgage payments through your plan. If you are current on your mortgage payments, you will not lose your house if you file for Chapter 13 bankruptcy, as long as you continue to make your mortgage payments. If you are current on your rent payments and file for bankruptcy, it's unlikely your landlord would receive a bankruptcy notice, but if you are behind on your rent, there's a good chance that your landlord will begin eviction proceedings. You usually are allowed to retain the cash value of your policies or retirement plans. Pensions which qualify under the Employee Retirement Income Security Act (ERISA), and many other retirement benefits are fully protected in bankruptcy. You'll be able to keep most household goods, furniture, furnishings, clothing (other than furs), appliances, books, and musical instruments. All public benefits, such as welfare, Social Security and unemployment insurance, are fully protected. Tools used on your job are also protected. You'll probably be able to keep up to several thousand dollars worth of the tools used in your trade or profession. In most states, you can protect at least 75% of earned but unpaid wages.
WHAT ARE SECURED DEBTS?
Secured creditors normally retain the right to seize their loan collateral, even after a discharge is granted. The debtor must decide whether to keep the asset. If a debtor returns the collateral, and if a discharge is granted, the debtor will have no further liability to the creditor. A debtor wishing to keep the asset, such as an automobile, may "reaffirm" the debt or redeem the property. A reaffirmation is an agreement between the debtor and the creditor where the debtor promises to pay all or a portion of the money owed. The reaffirmed debt will still be owed after the discharge. In return, the creditor promises as long as payments are made, the creditor will not repossess the automobile or other property. If the debtor defaults on the payments, the creditor may repossess and sell the collateral. Unfortunately, if the sale price is not enough to pay off the debt, the debtor will still owe a deficiency to the creditor.
WHAT IS THE GENERAL PROCESS IN CONSUMER BANKRUPTCY CASES?
In a Chapter 7 case, we will file several forms with the bankruptcy court listing your income and expenses, assets, debts and property transactions. A court-appointed person, the trustee, is assigned to oversee your case. About a month after filing, we will accompany you to a "meeting of creditors," where the trustee reviews your forms and asks any questions. Despite the name, creditors rarely attend. If you have any nonexempt property, you must give it (or its value in cash) to the trustee. The meeting lasts only a few minutes. A couple of months later, you should receive a notice from the court that "all debts that qualified for discharge were discharged." Chapter 13 is a little different. We will prepare and file the same forms plus a proposed repayment plan, in which we describe how you intend to repay your debts over the next three, or in some cases five, years. A trustee is assigned to oversee the case and we will attend the meeting of creditors together. Often one or two creditors attend this meeting, especially if they don't like something in your plan. After meeting the creditors, you attend a hearing before a bankruptcy judge who either confirms or denies your plan. If your plan is confirmed and you make all the payments called for under your plan, you often receive a discharge of any balance owed at the end of your case.
STOP CREDITORS IN THEIR TRACKS are you being harassed by creditors making threats and claims that you owe money to them? Are you facing FORECLOSURE, GARNISHMENT, LAWSUITS, JUDGMENTS, LIENS, TAX SEIZURE, EVICTION, OR REPOSSESSION? We can stop your creditors in their tracks the minute you file your bankruptcy petition. If creditors continue to harass you, you may have a claim against them for violation of your rights. If you are thinking of filing bankruptcy, contact our office before you make any more payments to your creditors.