Bankruptcy allows individuals the ability to lawfully eliminate their
debts when they can no longer handle the payments themselves. The
Unites States gives all citizens the right to file for bankruptcy. All
Iowa bankruptcy cases are handled through the Federal Court system.
Iowa has two different court -- Southern District of Iowa and Northern
District of Iowa -- and both courts can handle bankruptcy cases from
anywhere in the state. The state of Iowa gives the average citizen two
kinds of bankruptcy for which to petition: Chapter Thirteen bankruptcy
and Chapter Seven bankruptcy.
Chapter Seven bankruptcy allows individuals to sell portions of their
estates and use the money acquired to pay off creditors. Items like
appliances, houses, furniture, cars, and retirement plans are not
usually sold for this purpose. A trustee will be assigned to each case
and will be responsible for selling the property. Compensation will be
granted to the trustee before creditors are paid. This kind of
bankruptcy can take up to three months to complete.
Chapter Thirteen bankruptcy allows individuals to set up payments plans
for which they themselves can pay off the outstanding debts from
personal income. Iowa sets a five-year cap on these plans.
Bankruptcy Laws in Iowa
An attorney should be contacted before bankruptcy proceedings begin as
he or she will be able to advise which kind of bankruptcy is right for
which situation. Which kind of bankruptcy is to be filed depends on an
individual's personal standing.
An attorney will first consider the household circumstances, the amount
and source of income, the number of individuals residing in the home,
any vehicles to be considered for exemption, tax returns, claims that
are pending, business issues, and any real estate that is not
homestead. Certain issues such as balance transfers or cash advances
from credit cards will also be considered.
Petitioning for Bankruptcy
Attorneys will help individuals list all the necessary information in a
documented bankruptcy petition. The information needed includes any
debts, the household income, assets, and other identifying information.
The court has the right to grant discharge to a case.
Bankruptcy can be filed for with an attorney and through a
do-it-yourself method, but since bankruptcy laws have changed in recent
years and have become more complicated, it is advisable to consult an
attorney as to not miss any vital information. If a petition has been
filed incorrectly, the case will be thrown out.
Filing for Bankruptcy
A credit counseling class must first be attended before bankruptcy can
be filed. These classes are provided via the telephone or online and
cost fifty dollars. Both Iowa Federal Courts require that all paperwork
be submitted electronically. A hearing will soon after be designated. A
hearing will allow any creditors the opportunity to question an
individual about any asset issues.
After a hearing an individual has forty-five days to complete a
financial management class that costs fifty dollars. This class can
also be taken before the hearing, which allows the process to continue
without delay. A post hearing will follow along with a discharge.