If you are considering filing for bankruptcy in Iowa, it’s important to understand how the process works. An experienced attorney can help you decide whether Chapter 7 or Chapter 13 is the best option.
To qualify for Chapter 7, you must pass a means test. The test compares your household income to the average income of households in Iowa. Upsolve’s free Means Test Calculator can help you determine your eligibility.
The process
Bankruptcy is a legal way to eliminate debt, protect property, and get a fresh start. But it’s also a complicated process with long-term financial and legal consequences. It’s recommended to seek the advice of an experienced bankruptcy attorney.
In Iowa, the most common type of bankruptcy is Chapter 7. This is a liquidation bankruptcy that can help you get rid of or “discharge” your legal responsibility to pay unsecured debts such as credit card bills.
To qualify for Chapter 7 you must pass a means test which compares your current monthly income to the median income in Iowa for households of your size. You can use Upsolve’s free Chapter 7 Means Test Calculator to determine if you pass or fail the test. You must take two mandatory credit counseling courses and a debt education course before you can receive your discharge.
Qualifications
To qualify for Chapter 7 bankruptcy, a debtor must pass a means test. This calculation compares the debtor’s income to Iowa’s median income for households of their size. If the debtor’s income is above the median, they will need to file Chapter 13 instead.
Married debtors can double the exemptions available to them if they claim them together on their bankruptcy forms. Exemptions allow a debtor to keep property such as a home or car that they would otherwise have to surrender in bankruptcy.
However, secured debts such as mortgages or car loans are typically not exempted. Similarly, nondischargeable debts such as child support arrearages, recent tax debt and student loans do not go away in bankruptcy. This is why it is important to discuss your options with a local bankruptcy attorney.
Fees
There are several fees associated with filing for bankruptcy, including the cost of hiring a qualified attorney. In addition, there are fees for court costs, searches, copies, certifications, and recording of hearings. These fees vary depending on the type of bankruptcy you are filing and your income level.
Iowa has two federal bankruptcy districts, the Northern District and the Southern District. Each district has its own set of guidelines. You will need to review the guidelines for the district that serves your county.
Before filing for Chapter 7 bankruptcy, you must complete a pre-bankruptcy credit counseling course. This course is a requirement for all Iowa debtors. You will also need to take a second mandatory debt education course before your discharge. Your attorney may recommend a debt education course or you can find one on your own.
Meeting of Creditors
In both the Northern and Southern Districts, about a month after filing for bankruptcy you will be required to attend a meeting of creditors called a 341 meeting. This is a chance for the trustee, your creditors and you to review the petition and schedules submitted to the court and ask questions under oath. Your attorney will accompany you and provide guidance and support.
The meeting of creditors is an important part of the bankruptcy process. It is crucial to ensure that you have properly followed all legal requirements. Having an experienced local Iowa bankruptcy attorney by your side can help ensure that you receive your anticipated discharge. A qualified attorney can also help you understand which property is exempt from seizure under Iowa exemption laws.
Meeting of Trustees
During this meeting (also called 341 hearing), the trustee assigned to your case will question you under oath regarding the information in your bankruptcy documents. The trustee will also look at your non-exempt property to see if it is worth liquidating.
Individual debtors must bring a clear copy of their government-issued photo identification to the meeting. They also need to bring bank and brokerage statements, if they have any.
This meeting may seem intimidating, but it is generally pretty mild and civilized. Most trustees are some of the nicest people you will ever meet. Due to the COVID-19 pandemic, most meetings are now held over the phone or Zoom. The trustee will send you a notice of the location for your meeting. This meeting usually lasts five minutes.