Your "bankruptcy income" is based on the last SIX MONTHS. So add your gross income for the past six months including overtime, child support etc. and then double it and compare that number to the chart below. Be sure to tell Jeff if you pay child support since kids you pay support on are part of your household for bankruptcy purposes. If you are below median income, you are eligible for Chapter 7, period.
Iowa Annual Gross Median Income for Chapter 7 Bankruptcy
See Jeff's Iowa Bankruptcy Income Eligibility Video
1 Person $40,650
2 People $55,217
3 People $62,251
4 People $72,234
5 People $79,734
Include children you pay child support for.
Notes: Include in your household those who live there
plus those you claim as a dependent on your taxes.
Social Security is not included in income
Add $7500 for each additional person.
The means test does not apply if you have primarily non-consumer debt (business debt & tax debt), so let Jeff know if this is the case.
Questions? Email Jeff
16.10.11
Your Choice: Keep or Surrender Home & Cars
Keep or Surrender your Home
Keep your Home and keep paying for it or Surrender and be done with it. So your regular house payments continue if you are keeping your house. Iowa has an unlimited homestead exemption. If you plan to surrender you can probably stay in the home without making any mortgage payments for months if you want to save some money. If you are surrendering your home in Chapter 7 you will discharge all of the mortgage debt (first mortgage, second mortgage, home equity loans, lines of credit etc.) even if the home is later sold for less than what you owe.
Video: Keeping your Home when filing Iowa Bankruptcy
Keep or Surrender your Car(s)
If you own your car(s) outright, you can keep up to the $7,000 exemption amount single or two if you are filing a joint bankruptcy and are each on at least one title. Cars with little value are often fine too. If you have loans you can keep the car(s) and keep making the payments of surrender them and discharge the debt.
Video: Keeping your Car(s) when filing Iowa Bankruptcy
Keep your Home and keep paying for it or Surrender and be done with it. So your regular house payments continue if you are keeping your house. Iowa has an unlimited homestead exemption. If you plan to surrender you can probably stay in the home without making any mortgage payments for months if you want to save some money. If you are surrendering your home in Chapter 7 you will discharge all of the mortgage debt (first mortgage, second mortgage, home equity loans, lines of credit etc.) even if the home is later sold for less than what you owe.
Video: Keeping your Home when filing Iowa Bankruptcy
Keep or Surrender your Car(s)
If you own your car(s) outright, you can keep up to the $7,000 exemption amount single or two if you are filing a joint bankruptcy and are each on at least one title. Cars with little value are often fine too. If you have loans you can keep the car(s) and keep making the payments of surrender them and discharge the debt.
Video: Keeping your Car(s) when filing Iowa Bankruptcy
15.10.11
If Married, you can File Joint or Single Bankruptcy
If you are Married you can file together or file Single Bankruptcy
Many of my clients file single bankruptcy even though married. In Iowa spouses are not liable for your debt simply by virtue of your marriage. Most of my married clients will file together unless the spouse is not on the debt that causes the bankruptcy.
Married or Single Bankruptcy Filing In Iowa Video
Many of my clients file single bankruptcy even though married. In Iowa spouses are not liable for your debt simply by virtue of your marriage. Most of my married clients will file together unless the spouse is not on the debt that causes the bankruptcy.
Married or Single Bankruptcy Filing In Iowa Video
13.10.11
Credit After Bankruptcy
There is life after bankruptcy!
Although we hope you will live on a cash basis and avoid credit after your bankruptcy you can often get a good interest rate on a home purchase two years after your Iowa bankruptcy and most people get credit card offers a lot sooner than that. See Moran on Credit after bankruptcy and MSN on Credit After Bankruptcy.
Jeff's Credit After filing Bankruptcy Video
Although we hope you will live on a cash basis and avoid credit after your bankruptcy you can often get a good interest rate on a home purchase two years after your Iowa bankruptcy and most people get credit card offers a lot sooner than that. See Moran on Credit after bankruptcy and MSN on Credit After Bankruptcy.
Jeff's Credit After filing Bankruptcy Video
12.10.11
Getting Started
Jeff does not use client packets. Instead, we prepare your entire petition during the one office appointment. We file on Thursdays, your hearing is about 4 weeks later and you are discharged about 9 weeks after the hearing.
How do I get started?
You can complete a free online Iowa bankruptcy consultation and include any questions. Jeff often answers email after hours and/or weekends.
Once you plan to go forward, do your mandatory credit counseling certificate(s) and accumulate your attorney fees and documents, see the list below the video.
Video: Iowa Chapter 7 Bankruptcy, How to Get Started
What documents will I need?
Here is what you will need to bring to the office:
__$1306 in cash or money order. Can I make payments?;
__Credit Counseling Certificate Required-you can get this online at Cricket;
Note- New FREE pre-filing certificate website- Consumer Bankruptcy Counseling. If you try this, let us know how you like it.
__All bills you intend to discharge (credit cards, medical etc.) with account numbers and full address including zip code;
__Creditor information (full address, account #'s) on debts you will keep like home or car loans;
__Last two months (60 days) pay stubs from work, including your spouse even if they are not filing. If you are paid bi-weekly, this is four pay stubs.
__If you do not receive wage income, bring records of other income for the last six months;
__Most recent state and federal tax returns;
__W2's for the last two years;
__An estimate of the value of your Iowa home such as tax or other appraisal if you have them;
__Photo ID and Social Security Card or proof of social security number.
Or if you are under median, have all your fees and documents together and don't have questions, you can Set an Appointment Online page.
Office Directions to 4800 Mills Civic Pkwy, Ste. 218, West Des Moines, Iowa 50265.
Email Jeff Mathias jeff.mathias@gmail.com
Jeff filed Chapter 7 bankruptcy cases for all areas of Iowa and is located in West Des Moines, Iowa at 4800 Mills Civic Parkway, Suite 218, West Des Moines, IA 50265.
Also see Jeff's MathiasLaw.com and IowaBankruptcyguide.com.
How do I get started?
You can complete a free online Iowa bankruptcy consultation and include any questions. Jeff often answers email after hours and/or weekends.
Once you plan to go forward, do your mandatory credit counseling certificate(s) and accumulate your attorney fees and documents, see the list below the video.
Video: Iowa Chapter 7 Bankruptcy, How to Get Started
What documents will I need?
Here is what you will need to bring to the office:
__$1306 in cash or money order. Can I make payments?;
__Credit Counseling Certificate Required-you can get this online at Cricket;
Note- New FREE pre-filing certificate website- Consumer Bankruptcy Counseling. If you try this, let us know how you like it.
__All bills you intend to discharge (credit cards, medical etc.) with account numbers and full address including zip code;
__Creditor information (full address, account #'s) on debts you will keep like home or car loans;
__Last two months (60 days) pay stubs from work, including your spouse even if they are not filing. If you are paid bi-weekly, this is four pay stubs.
__If you do not receive wage income, bring records of other income for the last six months;
__Most recent state and federal tax returns;
__W2's for the last two years;
__An estimate of the value of your Iowa home such as tax or other appraisal if you have them;
__Photo ID and Social Security Card or proof of social security number.
Or if you are under median, have all your fees and documents together and don't have questions, you can Set an Appointment Online page.
Office Directions to 4800 Mills Civic Pkwy, Ste. 218, West Des Moines, Iowa 50265.
Email Jeff Mathias jeff.mathias@gmail.com
Jeff filed Chapter 7 bankruptcy cases for all areas of Iowa and is located in West Des Moines, Iowa at 4800 Mills Civic Parkway, Suite 218, West Des Moines, IA 50265.
Also see Jeff's MathiasLaw.com and IowaBankruptcyguide.com.
11.10.11
Jeff's Office- 4800 Mills Civic, Suite 218, West Des Moines
Jeff's West Des Moines Office Video
West Des Moines Iowa Bankruptcy Office
Somerfield Village (50th & Mills Civic Parkway)
4800 Mills Civic Parkway, Ste. 218 (2nd Floor)
West Des Moines, IA 50265
Local: 515-261-7526
Toll Free: 1-800-997-1395
From Interstate 35
Take the Mills Civic Parkway Exit and proceed east. At the first major intersection -50th and Mills Civic you will see Walgreen’s and the Somerfield Village Center on your right. You are there! Enter at the main entrance in the above picture and come upstairs to Suite 218. Our section of I35 is in WEST DES MOINES. Do not confuse this with the section of I35 North that leads to Ankeny, which is on the East side of Des Moines.
Exit from Interstate 35 on Mills Civic Parkway, Exit 70.
From Interstate 235 or Interstate 80
Go west to I35 South, Take the Mills Civic Parkway Exit and proceed east. Mills Civic is the next exit South of I235. At the first major intersection -50th and Mills Civic you will see Walgreen’s and the Somerfield Village Center on your right. You are there! Enter at the main entrance in the above picture and come upstairs to Suite 218. Our section of I35 is in WEST DES MOINES. Do not confuse this with the section of I35 North that leads to Ankeny, which is on the east side of Des Moines.
Look for the Walgreen's, we are in the same complex: Somerfield Village. Map of Jeff's Iowa Bankruptcy office.
Building lobby. When you arrive...
There is an elevator. Restrooms are at the top of the stairs. There is a Quizno’s sandwich shop and a Coffee Café within a few doors of our office if you arrive early or need lunch.
9.10.11
Iowa Chapter 7 Bankruptcy Exemptions in Detail
When you file a Chapter 7, your property goes into the "bankruptcy estate". You get to keep the items you properly exempt. Fortunately we have good exemptions in Iowa so that if we plan well you should be able to keep most or all of your assets and discharge your debt, not a bad deal. Iowa has "opted out" of the federal exemptions. Getting full disclosure of all your assets, doing legal and appropriate pre-bankruptcy planning and exempting your assets is a big part of what your Iowa bankruptcy attorney does for you.
Homestead: You can exempt your Iowa home and up to 1/2 acre within city limits or 40 acres outside city limits with no upper limit on value. However, if you acquired your debt before you acquired your home, your exemption may be limited. So be sure to tell Jeff if substantial amounts of your credit card debt occurred before you bought your home. See No Limit on value for Iowa Bankruptcy Home Exemption. Be sure to tell Jeff if you are in the process of modifying your mortgage. Some banks are declining modification applications when people file bankruptcy.
Vehicles: You can exempt one vehicle per debtor valued up to $7,000 as long as it is titled in the claimants name. So if a couple has two cars but both are titled in the Husbands name only, there is only one exemption. The amount you need to exempt is the total current market value (See KBB Trade Value) minus current loan balance.. So if your car is paid off you can exempt it up to $7,000 with this exemption. If your car is worth $20,000 and you owe $13,000 you can still exempt the entire car due to the loan balance.
Keeping your car when filing Iowa Chapter 7. Because they are not worth very much you can often keep old junkers too.
Wages/Social Security Benefits: We can exempt accrued (earned but as yet unpaid) wages and social security benefits.
Workers Comp Claims- Are exempt while in progress. The funds lose their exempt status once received.
Cash/Wild Card: We can exempt your bank balance and cash with your Cash/Wild Card exemption. The $1,000 exemption can also be used for items that you don't have another exemption available for, like excess tax refunds. For this reason, it is usually best to spend down bank balances before we file your case. That leave more wild card exemption available in case something else comes up.
Rental Deposit up to $500.
Tax Refund: Tax Refund issues come up late in the year after you have worked quite a bit and accumulated a looming refund. So if you file your bankruptcy after you have received your refunds and before about October 1st you are not likely to have any problems keeping all of the refunds. There is a $1,000/$2,000 Joint Married exemption for your pending tax refund. You also get to keep all of your Earned Income Credit (see page 2 of your Federal 1040). Then we can exempt at least some additional amounts with your wild card exemption.
In spending your tax refund, you do need to be aware of preference payments. For example, the Court does not like it when you repay money to a family member for past due debt just before filing bankruptcy. The Judge can take that money back and give it to your other creditors. Far better to repay past due debt to family AFTER you file your bankruptcy.
Household Goods & Furnishings up to $7,000 in liquidation value. Liquidation = selling on Craigslist, garage sale etc.
If you have Nebraska Furniture Mart debt, discuss this with Jeff.
Jewelry (per debtor):
Engagement Ring- $7,000
Wedding Ring- No limit if purchased at time of wedding
Anniversary Ring- $2,000
Other Jewelry- $2,000
Tools of Trade/Business Assets: Applies to equity value of small business assets unless incorporated. So if the liquidation value of your business assets is $20,000 and you owe $10,000 in debt secured by the assets you can exempt them all. Also applies to tools used in employment and related items. Note there is no exemption for inventory or accounts receivable.
Keeping your Small Business in Iowa Chapter 7 Video
Farm equipment & inventory up to $10,000.
Whole LIfe insurance cash value is exempt so long as the beneficiary is the spouse or child, although only up to $10,000 if purchased within two years of filing.
Pensions and 401k's are exempt. Bring at least an estimated value so we can claim & exempt it.
Personal Injury proceeds necessary for your support.
Guns: You can exempt one shotgun and one rifle per debtor with no maximum value. There is no exemption for pistols unless you are with law enforcement. But you could use the wild card.
Portraits, libraries & bibles up to $1,000
1 Acre burial plot
Common Non-exempt items: The most common non-exempt assets we see are huge tax refunds. If you get monster tax refunds, you should adjust your dependent claims with your payroll department to increase your regular pay and reduce the refund amount.
Claims against others, so if you have a lawsuit or debt owed to you by someone else, there often is no exemption for that meaning the trustee could take it away from you and collect the funds for the benefit of your creditors. Workers Comp claims in progress are exempt.
Time Shares are not exempt although if they have little or no market value you may be able to keep them, although most people prefer to surrender them and be done with it.
Also toys like motorcycles, trailers, boats, ATV's, snowmobiles and the like. However, if you have a boat worth $2,000 and you owe $2,000 on it you could keep that since it has no equity anyway. We can also use your wild card exemption on these if needed.
Health Savings Accounts are not exempt.
Rental Properties: Real estate that you don't live in is not exempt. But again, if your rental property is worth $30,000 and you owe $30,000 there is nothing to exempt anyway.
Jeff can help you with pre-bankruptcy planning on items like this. Although we can exempt most tax refunds, if you have a very large refund coming, be sure to discuss it with Jeff. There is some flexibility on exemptions that is more art than science, like teen cars. Jeff can advise you on assets like this.
More on Iowa Bankruptcy Exemptions.
Jeff Mathias, ISBA No. 15903
Consumer Bankruptcy Attorney
4800 Mills Civic Parkway, Suite 218
West Des Moines, Iowa 50265
Telephone: 515-261-7526 Toll Free: 1-800-997-1395
jeff.mathias@gmail.com
MathiasLaw.com
Homestead: You can exempt your Iowa home and up to 1/2 acre within city limits or 40 acres outside city limits with no upper limit on value. However, if you acquired your debt before you acquired your home, your exemption may be limited. So be sure to tell Jeff if substantial amounts of your credit card debt occurred before you bought your home. See No Limit on value for Iowa Bankruptcy Home Exemption. Be sure to tell Jeff if you are in the process of modifying your mortgage. Some banks are declining modification applications when people file bankruptcy.
Vehicles: You can exempt one vehicle per debtor valued up to $7,000 as long as it is titled in the claimants name. So if a couple has two cars but both are titled in the Husbands name only, there is only one exemption. The amount you need to exempt is the total current market value (See KBB Trade Value) minus current loan balance.. So if your car is paid off you can exempt it up to $7,000 with this exemption. If your car is worth $20,000 and you owe $13,000 you can still exempt the entire car due to the loan balance.
Keeping your car when filing Iowa Chapter 7. Because they are not worth very much you can often keep old junkers too.
Wages/Social Security Benefits: We can exempt accrued (earned but as yet unpaid) wages and social security benefits.
Workers Comp Claims- Are exempt while in progress. The funds lose their exempt status once received.
Cash/Wild Card: We can exempt your bank balance and cash with your Cash/Wild Card exemption. The $1,000 exemption can also be used for items that you don't have another exemption available for, like excess tax refunds. For this reason, it is usually best to spend down bank balances before we file your case. That leave more wild card exemption available in case something else comes up.
Rental Deposit up to $500.
Tax Refund: Tax Refund issues come up late in the year after you have worked quite a bit and accumulated a looming refund. So if you file your bankruptcy after you have received your refunds and before about October 1st you are not likely to have any problems keeping all of the refunds. There is a $1,000/$2,000 Joint Married exemption for your pending tax refund. You also get to keep all of your Earned Income Credit (see page 2 of your Federal 1040). Then we can exempt at least some additional amounts with your wild card exemption.
In spending your tax refund, you do need to be aware of preference payments. For example, the Court does not like it when you repay money to a family member for past due debt just before filing bankruptcy. The Judge can take that money back and give it to your other creditors. Far better to repay past due debt to family AFTER you file your bankruptcy.
Household Goods & Furnishings up to $7,000 in liquidation value. Liquidation = selling on Craigslist, garage sale etc.
If you have Nebraska Furniture Mart debt, discuss this with Jeff.
Jewelry (per debtor):
Engagement Ring- $7,000
Wedding Ring- No limit if purchased at time of wedding
Anniversary Ring- $2,000
Other Jewelry- $2,000
Tools of Trade/Business Assets: Applies to equity value of small business assets unless incorporated. So if the liquidation value of your business assets is $20,000 and you owe $10,000 in debt secured by the assets you can exempt them all. Also applies to tools used in employment and related items. Note there is no exemption for inventory or accounts receivable.
Keeping your Small Business in Iowa Chapter 7 Video
Farm equipment & inventory up to $10,000.
Whole LIfe insurance cash value is exempt so long as the beneficiary is the spouse or child, although only up to $10,000 if purchased within two years of filing.
Pensions and 401k's are exempt. Bring at least an estimated value so we can claim & exempt it.
Personal Injury proceeds necessary for your support.
Guns: You can exempt one shotgun and one rifle per debtor with no maximum value. There is no exemption for pistols unless you are with law enforcement. But you could use the wild card.
Portraits, libraries & bibles up to $1,000
1 Acre burial plot
Common Non-exempt items: The most common non-exempt assets we see are huge tax refunds. If you get monster tax refunds, you should adjust your dependent claims with your payroll department to increase your regular pay and reduce the refund amount.
Claims against others, so if you have a lawsuit or debt owed to you by someone else, there often is no exemption for that meaning the trustee could take it away from you and collect the funds for the benefit of your creditors. Workers Comp claims in progress are exempt.
Time Shares are not exempt although if they have little or no market value you may be able to keep them, although most people prefer to surrender them and be done with it.
Also toys like motorcycles, trailers, boats, ATV's, snowmobiles and the like. However, if you have a boat worth $2,000 and you owe $2,000 on it you could keep that since it has no equity anyway. We can also use your wild card exemption on these if needed.
Health Savings Accounts are not exempt.
Rental Properties: Real estate that you don't live in is not exempt. But again, if your rental property is worth $30,000 and you owe $30,000 there is nothing to exempt anyway.
Jeff can help you with pre-bankruptcy planning on items like this. Although we can exempt most tax refunds, if you have a very large refund coming, be sure to discuss it with Jeff. There is some flexibility on exemptions that is more art than science, like teen cars. Jeff can advise you on assets like this.
More on Iowa Bankruptcy Exemptions.
Jeff Mathias, ISBA No. 15903
Consumer Bankruptcy Attorney
4800 Mills Civic Parkway, Suite 218
West Des Moines, Iowa 50265
Telephone: 515-261-7526 Toll Free: 1-800-997-1395
jeff.mathias@gmail.com
MathiasLaw.com
8.10.11
Iowa Chapter 7 Bankruptcy - Mistakes to Avoid & Reaffirmation
Jeff's Video discusses Mistakes to avoid filing Iowa bankruptcy.
Common Iowa Bankruptcy Mistakes
1. Preference Payments
If you owe on credit cards or medical debt and instead of paying that you pay past-due debt to family within 1 year of filing bankruptcy, that is a preference payment. The Judge can take that money back from your family and give it to your other creditors. For ordinary (non family) creditors it is within 90 days of filing bankruptcy. So don't pay past due debt just before filing. On-time payments in the ordinary course of business are fine.
2. Transferring Property
Don't transfer titles, sign property away etc. before you file bankruptcy. Don't sell property for less than fair market value. The Judge can reverse these transfers.
3. Loading Up
Once you know you can not repay your debt, it is fraudulent to continue to acquire new debt. So don't do any cash advances or balance transfers. It is best to stop using credit cards entirely once you know you are going to have to file bankruptcy. There is a presumption that charges made within 90 days of filing are fraudulent and those may have to be repaid. See Bankruptcy Loading Up.
4. Tax Refunds
If you are filing after about October 1st and before you get your tax refunds, be sure to discuss how much you can exempt with Jeff. You have a $1,000/$2,000 joint exemption plus you can use part of your wild card(s) for tax refunds and you also keep all Earned Income Credit, see page 2 of your Federal 1040. See Bankruptcy and Tax Refunds.
NOTE: Huge tax refunds are not good. This is a no-interest loan you are making to Uncle Sam each year. Far better to claim more dependents and get more $ on each paycheck.
5. Unlisted Debt
Please don't leave creditors off your petition! Jeff will email you a draft petition so you can review it again after we go through everything together in the office.
6. Unlisted Assets
We can't exempt assets that are not listed, so very important to list everything you own of significance. Normally we can deal with it in some way.
7. Lawsuits & Claims against Others
Personal Injury and other claims must be listed. Because your cooperation is needed in order to prosecute your Personal Injury claim, an arrangement can often be made so you can keep part of the proceeds & we may be able to exempt them if you need them for basic living expenses.
8. Inheritance
If you will be receiving an inheritance or life insurance proceeds within 6 months, do not file bankruptcy. If you do receive these funds the Court can take them to satisfy your debt.
9. Waiting too Long
Lawsuits, wage and bank garnishments and liens and all their associated headaches can be avoided. Filing bankruptcy stops wage garnishment.
10. Missed Hearing
If you forget to attend your hearing your case may be dismissed.
Reaffirmation Agreements
When you file Chapter 7 you schedule all debt including home and car loans you would like to keep. Some banks request new contracts called Reaffirmation Agreements. Our Judge prefers in most cases that you not reaffirm. She normally tells clients to just keep & pay. That way you can not be sued, garnished etc. if you can't pay in the future for some reason. Since banks are inconsistent on credit reporting, you may want to pull your Equifax credit report occasionally and see if they are reporting your payments. if not, you can request a payment history from the lender once a year and forward that to the credit bureaus with a request they update your credit history. See Karen Oakes on Reaffirmation Agreements.
Video on Reaffirmation Agreements in Iowa Chapter 7
Jeff is happy to answer your questions about filing Iowa Bankruptcy and can often answer email after hours. Email Jeff Mathias
Jeff Mathias Law Office, 4800 Mills Civic Parkway, Suite 218, West Des Moines, Iowa 50265.
Common Iowa Bankruptcy Mistakes
1. Preference Payments
If you owe on credit cards or medical debt and instead of paying that you pay past-due debt to family within 1 year of filing bankruptcy, that is a preference payment. The Judge can take that money back from your family and give it to your other creditors. For ordinary (non family) creditors it is within 90 days of filing bankruptcy. So don't pay past due debt just before filing. On-time payments in the ordinary course of business are fine.
2. Transferring Property
Don't transfer titles, sign property away etc. before you file bankruptcy. Don't sell property for less than fair market value. The Judge can reverse these transfers.
3. Loading Up
Once you know you can not repay your debt, it is fraudulent to continue to acquire new debt. So don't do any cash advances or balance transfers. It is best to stop using credit cards entirely once you know you are going to have to file bankruptcy. There is a presumption that charges made within 90 days of filing are fraudulent and those may have to be repaid. See Bankruptcy Loading Up.
4. Tax Refunds
If you are filing after about October 1st and before you get your tax refunds, be sure to discuss how much you can exempt with Jeff. You have a $1,000/$2,000 joint exemption plus you can use part of your wild card(s) for tax refunds and you also keep all Earned Income Credit, see page 2 of your Federal 1040. See Bankruptcy and Tax Refunds.
NOTE: Huge tax refunds are not good. This is a no-interest loan you are making to Uncle Sam each year. Far better to claim more dependents and get more $ on each paycheck.
5. Unlisted Debt
Please don't leave creditors off your petition! Jeff will email you a draft petition so you can review it again after we go through everything together in the office.
6. Unlisted Assets
We can't exempt assets that are not listed, so very important to list everything you own of significance. Normally we can deal with it in some way.
7. Lawsuits & Claims against Others
Personal Injury and other claims must be listed. Because your cooperation is needed in order to prosecute your Personal Injury claim, an arrangement can often be made so you can keep part of the proceeds & we may be able to exempt them if you need them for basic living expenses.
8. Inheritance
If you will be receiving an inheritance or life insurance proceeds within 6 months, do not file bankruptcy. If you do receive these funds the Court can take them to satisfy your debt.
9. Waiting too Long
Lawsuits, wage and bank garnishments and liens and all their associated headaches can be avoided. Filing bankruptcy stops wage garnishment.
10. Missed Hearing
If you forget to attend your hearing your case may be dismissed.
Reaffirmation Agreements
When you file Chapter 7 you schedule all debt including home and car loans you would like to keep. Some banks request new contracts called Reaffirmation Agreements. Our Judge prefers in most cases that you not reaffirm. She normally tells clients to just keep & pay. That way you can not be sued, garnished etc. if you can't pay in the future for some reason. Since banks are inconsistent on credit reporting, you may want to pull your Equifax credit report occasionally and see if they are reporting your payments. if not, you can request a payment history from the lender once a year and forward that to the credit bureaus with a request they update your credit history. See Karen Oakes on Reaffirmation Agreements.
Video on Reaffirmation Agreements in Iowa Chapter 7
Jeff is happy to answer your questions about filing Iowa Bankruptcy and can often answer email after hours. Email Jeff Mathias
Jeff Mathias Law Office, 4800 Mills Civic Parkway, Suite 218, West Des Moines, Iowa 50265.
7.10.11
Iowa Bankruptcy Court Location
Federal Building
210 Walnut
Suite 783
Des Moines, IA 50309
Iowa Bankruptcy Court Video
Bankruptcy Court links include U.S. Courts, Bankruptcy, and Federal Courts/Bankruptcy index. Jeff files your case via electronic case filing so you can log in and check your case progress yourself if you wish at ECF for bankruptcy courts
Your Iowa Bankruptcy hearing will be held at the:
Federal Building
210 Walnut
Room 783
Des Moines, Iowa
(2nd & Walnut, downtown Des Moines)
Iowa Bankruptcy Court, Federal Bldg.
5.10.11
Iowa Foreclosure Law
Foreclosure, along with job loss and illness is one of the big three reasons people file bankruptcy. If foreclosure is your only financial problem, you should wait to file bankruptcy since banks often do not pursue the deficiency. But I find that most clients in foreclosure have accumulated significant other debt attempting to keep the home. If you file Ch 7 you can discharge all mortgage debt even if the bank ends up selling the home for less than what you owe.
Recently, banks are taking months or years to foreclose. I have many clients now who are staying in their homes even after the foreclosure has started and they have filed bankruptcy. They pay utilities and association dues if any, but do not make any mortgage payments. They save that money for to use for their next home.
Sometimes, people will file Chapter 13 repayment to try and save their home and incorporate the past due payments. Since the resale market is so bad right now though, most do not have significant equity they could realize if the home was sold. The costs of a Chapter 13 are just too high to file for the purposes of keeping a home with no equity.
See Jeff's Iowa Foreclosure Site. Jeff's office is located in Des Moines at 4800 Mills Civic Parkway, WDSM IA 50265.
Recently, banks are taking months or years to foreclose. I have many clients now who are staying in their homes even after the foreclosure has started and they have filed bankruptcy. They pay utilities and association dues if any, but do not make any mortgage payments. They save that money for to use for their next home.
Sometimes, people will file Chapter 13 repayment to try and save their home and incorporate the past due payments. Since the resale market is so bad right now though, most do not have significant equity they could realize if the home was sold. The costs of a Chapter 13 are just too high to file for the purposes of keeping a home with no equity.
See Jeff's Iowa Foreclosure Site. Jeff's office is located in Des Moines at 4800 Mills Civic Parkway, WDSM IA 50265.
4.10.11
Bankruptcy Alternatives
Bankruptcy Alternatives
Alternatives to Iowa Bankruptcy Video
A. Iowa Bankruptcy Alternatives- If you are trying to avoid filing bankruptcy.
The banking (primarily credit card) industry wants consumers to believe there are a lot of bankruptcy alternatives; ways to avoid bankruptcy and deal with debt, other than filing personal bankruptcy. That is true, but they don’t tell you that many of these methods to avoid bankruptcy actually lead to greater profits for the banks and more pain for the consumer.
First, reasonable personal bankruptcy alternatives and then the unreasonable personal bankruptcy alternatives preferred by the banks.
Reasonable personal bankruptcy alternatives
Paying it off Yourself:
If you have enough income, you should select the credit card with the highest interest rate and pay as much as possible on that card while making minimum payments on the others. Work your way through all your cards this way. Unfortunately, by the time they are considering personal bankruptcy most debtors do not have enough income for this.
Consumer Credit of Des Moines:
If you have enough income to pay your debt, you may find that a consolidated payment through a consumer credit program helpful. A recent study indicated that only 3-4% of the people who take the pre-bankruptcy credit counseling classes are eligible for repayment through a Consumer Credit program; the vast majority of people who are considering bankruptcy just don't have enough income. We encourage you to avoid distant online firms and try and use local offices instead. Many so called “non-profit” consumer credit firms are actually designed to benefit insiders and they rip clients off left and right, so use a local office.
Debt Compromise:
If you have access to enough money to pay off around 50% of your debt you may be able to settle your debt for less than the full amount owed. Again, many distant online firms will take your money and not settle any debt. Use caution in getting help with debt compromise. A local attorney is often your best bet. Many people sign up with distant debt settlement websites hoping to avoid personal bankruptcy and end up being ripped off.
Unreasonable Alternatives to personal bankruptcy:
Home Equity Loans:
Second and Third mortgages, home equity loans and lines of credit are very popular with banks. This is because they want you to convert debt you could discharge in personal bankruptcy to non-dischargeable mortgage debt. That way if you cannot make the payments later they can take your home and sell it in order to recover the money they are owed. So if you are considering filing personal bankruptcy just remember that if you get more debt on your home instead it could result in loss of your home later.
Consolidation Loans:
Some people will take on more debt in order to pay down their credit cards. If you have the ability to pay the loan off reasonably quickly it could work, but most people do not and continue to struggle, unable to pay for other basic needs due to the high consolidated payment. Worse, many go right out and charge up their credit cards again resulting in a bigger problem. In some cases, consolidated debt cannot be discharged in bankruptcy.
Robbing Peter to Pay Paul:
Too often we see clients who attempt to avoid personal bankruptcy by playing a shell game with credit cards, using one card to pay down another through balance transfers and cash advances. Banks also encourage this practice because it turns old (dischargeable in personal bankruptcy) debt into new (non-dischargeable in personal bankruptcy) debt. If you file personal bankruptcy after making these transfers you may have to pay that money back. Unless you are planning to win the lottery, robbing Peter to pay Paul never works for long and only causes problems when you finally do file personal bankruptcy.
The Ostrich Approach:
Too many debtors simply take the “Ostrich Approach”, burying their head in the ground and trying to avoid personal bankruptcy. They hope nothing bad will happen if they do nothing. Unfortunately, they usually end up being sued and their wages and/or bank accounts garnished or having their home foreclosed. Filing personal bankruptcy can stop this before it starts.
B. Bankruptcy Alternatives- If you do decide to file bankruptcy
The primary consumer chapters are Chapter 7 and Chapter 13
Chapter 7 bankruptcy is also referred to as “liquidation” or “straight bankruptcy”. Under Chapter 7 you discharge all debt that can be discharged, usually credit card, medical and other miscellaneous debt. Most Chapter 7 debtors will choose to repay some debt like mortgage debt or car loans. As a rule you cannot discharge secured debt and still keep the secured asset, although there are some exceptions for debt like second mortgages in some areas of the country. Many debtors prefer Chapter 7 bankruptcy because there are no payments to be made.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy involves repayment of part or all of your debt for up to five years. Some debts that you will keep may gain more favorable treatment under Chapter 13 bankruptcy. You may also be able to incorporate back payments on your home into a Chapter 13 repayment plan.
Keeping the home & keeping the cars?
Home- If you owe more than your home is worth or you simply cannot make the payments, it may be best to surrender. Most people who want to keep their home when filing bankruptcy do so.
Cars- If you owe more than your car is worth or cannot afford the car payments, your bankruptcy may be the best way to get relief from that debt. Many people who file bankruptcy do keep their car and continue the payments.
by Jeff Mathias, Des Moines, Iowa bankruptcy attorney, 4800 Mills Civic Parkway, West Des Moines, Iowa 50265. Tel: 515-261-7526, Toll Free 1-800-997-1395.
Bankruptcy lawyer information. If you are considering Chapter 7 or Chapter 13 in Minnesota, see Minnesota bankruptcy attorneys Bolinske & Bolinske. PLLC. They also have a bankruptcy information for Minneapolis & St. Paul Minnesota. Bankruptcy Information. See Brad Botes for Birmingham, Alabama Bankruptcy. Jeff charges a Fixed $900 Attorney Fee for Chapter 7 with a $299 Filing Fee, No Packets, one office appointment and one hearing in Des Moines. Jeff represents clients from all of Iowa.
Jeff files all bankruptcy his cases in Des Moines so you would have one trip to Jeff's office to prepare the petition and one trip to your hearing in Des Moines about 30 days after filing. Your discharge comes about 9 weeks after your hearing. See Jeff's primary Iowa Bankruptcy website. Jeff's Iowa Attorneys website. Jeff's hobby is cycling, see Jeff's Raccoon River Valley Trail. How to file bankruptcy. Nationwide bankruptcy attorney information. Florida bankruptcy attorney.
Alternatives to Iowa Bankruptcy Video
A. Iowa Bankruptcy Alternatives- If you are trying to avoid filing bankruptcy.
The banking (primarily credit card) industry wants consumers to believe there are a lot of bankruptcy alternatives; ways to avoid bankruptcy and deal with debt, other than filing personal bankruptcy. That is true, but they don’t tell you that many of these methods to avoid bankruptcy actually lead to greater profits for the banks and more pain for the consumer.
First, reasonable personal bankruptcy alternatives and then the unreasonable personal bankruptcy alternatives preferred by the banks.
Reasonable personal bankruptcy alternatives
Paying it off Yourself:
If you have enough income, you should select the credit card with the highest interest rate and pay as much as possible on that card while making minimum payments on the others. Work your way through all your cards this way. Unfortunately, by the time they are considering personal bankruptcy most debtors do not have enough income for this.
Consumer Credit of Des Moines:
If you have enough income to pay your debt, you may find that a consolidated payment through a consumer credit program helpful. A recent study indicated that only 3-4% of the people who take the pre-bankruptcy credit counseling classes are eligible for repayment through a Consumer Credit program; the vast majority of people who are considering bankruptcy just don't have enough income. We encourage you to avoid distant online firms and try and use local offices instead. Many so called “non-profit” consumer credit firms are actually designed to benefit insiders and they rip clients off left and right, so use a local office.
Debt Compromise:
If you have access to enough money to pay off around 50% of your debt you may be able to settle your debt for less than the full amount owed. Again, many distant online firms will take your money and not settle any debt. Use caution in getting help with debt compromise. A local attorney is often your best bet. Many people sign up with distant debt settlement websites hoping to avoid personal bankruptcy and end up being ripped off.
Unreasonable Alternatives to personal bankruptcy:
Home Equity Loans:
Second and Third mortgages, home equity loans and lines of credit are very popular with banks. This is because they want you to convert debt you could discharge in personal bankruptcy to non-dischargeable mortgage debt. That way if you cannot make the payments later they can take your home and sell it in order to recover the money they are owed. So if you are considering filing personal bankruptcy just remember that if you get more debt on your home instead it could result in loss of your home later.
Consolidation Loans:
Some people will take on more debt in order to pay down their credit cards. If you have the ability to pay the loan off reasonably quickly it could work, but most people do not and continue to struggle, unable to pay for other basic needs due to the high consolidated payment. Worse, many go right out and charge up their credit cards again resulting in a bigger problem. In some cases, consolidated debt cannot be discharged in bankruptcy.
Robbing Peter to Pay Paul:
Too often we see clients who attempt to avoid personal bankruptcy by playing a shell game with credit cards, using one card to pay down another through balance transfers and cash advances. Banks also encourage this practice because it turns old (dischargeable in personal bankruptcy) debt into new (non-dischargeable in personal bankruptcy) debt. If you file personal bankruptcy after making these transfers you may have to pay that money back. Unless you are planning to win the lottery, robbing Peter to pay Paul never works for long and only causes problems when you finally do file personal bankruptcy.
The Ostrich Approach:
Too many debtors simply take the “Ostrich Approach”, burying their head in the ground and trying to avoid personal bankruptcy. They hope nothing bad will happen if they do nothing. Unfortunately, they usually end up being sued and their wages and/or bank accounts garnished or having their home foreclosed. Filing personal bankruptcy can stop this before it starts.
B. Bankruptcy Alternatives- If you do decide to file bankruptcy
The primary consumer chapters are Chapter 7 and Chapter 13
Chapter 7 bankruptcy is also referred to as “liquidation” or “straight bankruptcy”. Under Chapter 7 you discharge all debt that can be discharged, usually credit card, medical and other miscellaneous debt. Most Chapter 7 debtors will choose to repay some debt like mortgage debt or car loans. As a rule you cannot discharge secured debt and still keep the secured asset, although there are some exceptions for debt like second mortgages in some areas of the country. Many debtors prefer Chapter 7 bankruptcy because there are no payments to be made.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy involves repayment of part or all of your debt for up to five years. Some debts that you will keep may gain more favorable treatment under Chapter 13 bankruptcy. You may also be able to incorporate back payments on your home into a Chapter 13 repayment plan.
Keeping the home & keeping the cars?
Home- If you owe more than your home is worth or you simply cannot make the payments, it may be best to surrender. Most people who want to keep their home when filing bankruptcy do so.
Cars- If you owe more than your car is worth or cannot afford the car payments, your bankruptcy may be the best way to get relief from that debt. Many people who file bankruptcy do keep their car and continue the payments.
by Jeff Mathias, Des Moines, Iowa bankruptcy attorney, 4800 Mills Civic Parkway, West Des Moines, Iowa 50265. Tel: 515-261-7526, Toll Free 1-800-997-1395.
Bankruptcy lawyer information. If you are considering Chapter 7 or Chapter 13 in Minnesota, see Minnesota bankruptcy attorneys Bolinske & Bolinske. PLLC. They also have a bankruptcy information for Minneapolis & St. Paul Minnesota. Bankruptcy Information. See Brad Botes for Birmingham, Alabama Bankruptcy. Jeff charges a Fixed $900 Attorney Fee for Chapter 7 with a $299 Filing Fee, No Packets, one office appointment and one hearing in Des Moines. Jeff represents clients from all of Iowa.
Jeff files all bankruptcy his cases in Des Moines so you would have one trip to Jeff's office to prepare the petition and one trip to your hearing in Des Moines about 30 days after filing. Your discharge comes about 9 weeks after your hearing. See Jeff's primary Iowa Bankruptcy website. Jeff's Iowa Attorneys website. Jeff's hobby is cycling, see Jeff's Raccoon River Valley Trail. How to file bankruptcy. Nationwide bankruptcy attorney information. Florida bankruptcy attorney.
We are a debt relief agency. We help people file for relief under the Bankruptcy Code
3.10.11
2.10.11
Iowa Attorneys and Law Firms
Need an Iowa Attorney for another city or practice area?
Iowa attorneys Gallner & Pattermann, PC handle Iowa Personal Injury.
Iowa attorneys Simmons, Perrine, Moyer, Bergman PC handle a wide range of Business and Litigation matters throughout Iowa.
Iowa firm Nyemaster Goode has offices in Ames, Des Moines and Cedar Rapids.
Davis Brown is a Des Moines, Iowa law firm handling corporate law.
Iowa lawyers Ahlers & Cooney PC enjoy protecting Iowa businesses.
The Iowa State Bar Association has a Iowa attorney referral system.
Findlaw's Iowa Attorney finder can help if you are still looking.
You can search for an Iowa lawyer by name through the Iowa Court Commission.
Iowa attorneys Gallner & Pattermann, PC handle Iowa Personal Injury.
Iowa attorneys Simmons, Perrine, Moyer, Bergman PC handle a wide range of Business and Litigation matters throughout Iowa.
Iowa firm Nyemaster Goode has offices in Ames, Des Moines and Cedar Rapids.
Davis Brown is a Des Moines, Iowa law firm handling corporate law.
Iowa lawyers Ahlers & Cooney PC enjoy protecting Iowa businesses.
The Iowa State Bar Association has a Iowa attorney referral system.
Findlaw's Iowa Attorney finder can help if you are still looking.
You can search for an Iowa lawyer by name through the Iowa Court Commission.
1.10.11
Iowa Chapter 13 Bankruptcy
There are two main Chapters under which most debtors file bankruptcy in Iowa;
Iowa Chapter 7 Bankruptcy - Full Discharge.
Chapter 7 bankruptcy is also known as "liquidation". In theory, your property is sold and the money given to creditors. But in fact, due to your allowable Iowa bankruptcy exemptions, you normally get to keep your home, cars, retirement and other assets, assuming reasonable pre-bankruptcy planning with your attorney and your exemptions are properly claimed. A lot of what we do as bankruptcy attorneys is keep up with frequent changes in application of the exemption rules. For example, one of our trustees recently discovered that whole life insurance cash value is non-exempt if the beneficiary is not the debtors spouse or child. So keeping up with these changes is a big part of what we bankruptcy attorneys do for our clients. Jeff's primary Iowa Bankruptcy website.
Video- Will I lose property if I file Iowa Chapter 7 Bankruptcy?
and
Iowa Chapter 13 Bankruptcy -5 Year Repayment of Debt.
The vast majority of people do full discharge Chapter 7 for a Fresh Start but sometimes a Chapter 13 has advantages.
Reasons People Consider Chapter 13 Bankruptcy:
High Income: If your income is too high to qualify for Chapter 7 full discharge, Chapter 13 may be your only option. Some people over Iowa median income can still file Chapter 7, others need to consider Chapter 13. Debtors who are over median income must pass the "bankruptcy means test" in order to still qualify for a Chapter 7.
The challenge with the means test is that you are limited to IRS collection guideline expenses, an application of the guidelines by the way that was never intended by and is not supported by the IRS. Many believe application of harsh collection guidelines that were designed for aggressive collection against tardy taxpayers is inappropriate for the collection of credit card and other consumer debt against struggling consumers, many of whom are in bankruptcy due to job loss, divorce or illness. But we are stuck with it due to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which was written by the banking industry with the intent of making it more difficult and expensive to file bankruptcy.
Tax Debt: In some case, Chapter 13 is better for handling tax debt since it can stop penalties and interest.
Catching Up: If you are behind on your home for example and need more time to catch up, (cure the default) you may want to consider Chapter 13. The first analysis here should always be equity. So determine a realistic home market value on your home based on comparable sales. Then add up balances on your first mortgage, second mortgage, home equity loan etc. and total them. If the total of loans is equal to or more than your market value, it may not make any sense to spend money on a Chapter 13 since you don't have equity.
Discharge Second Mortgage: In some cases with Chapter 13 you can keep your home and repay the first mortgage but discharge the second mortgage. Generally the current market value of your home must not exceed the balance of the first mortgage. Des Moines attorney Mike Jankins is great for these cases.
Cram Down: In some cases you may be able to reduce the amount owed on some secured debt like your car. This is known as a cram down because it reduces the loan balance. Unfortunately, the bankruptcy code prohibits adjustment of your home mortgage, the most needed cram down. Several attempts have been made in Congress to give Judges the ability to adjust home loans, without success.
Eligibility for Chapter 13 Bankruptcy
In order to be eligible for Chapter 13 bankruptcy, you must have regular income sufficient to repay your debt at least in part over five years. The regular income needs to be sufficiently stable and regular to enable you to make your Chapter 13 payments. Your attorney files a Chapter 13 plan that is then reviewed by the Court. If the Judge does not believe your income is regular enough to support regular repayments your plan will not be approved. In some cases, if your income drops during repayment you can convert to a Chapter 7 full discharge.
Unsecured debt can not exceed $290,525 and secured debt can not exceed $871,550.
Chapter 13 Repayment
Repayment begins within 30 days after the plan is filed.
Chapter 13 Repayment is normally for Five Years. The code provides for Three year repayment too, but it is difficult or impossible to get a three year plan approved under the more restrictive Chapter 13 code in effect since 2005. Your repayment amount is based on your "ability to repay" after deducting allowable expenses from your income.
See National Standards for Chapter 13 repayment and Iowa bankruptcy Local Housing and Utility Standards. As in many areas of the law, Chapter 13 bankruptcy is as much a matter of art as science. Experienced bankruptcy attorneys know what their local Judges and Chapter 13 bankruptcy Trustees will allow for expenses without a fight, meaning what you can do without spending a lot on attorney fees. US Courts Chapter 13 bankruptcy information.
The Chapter 13 Plan must provide for full repayment of bankruptcy priority debt like back taxes.
Discharge or Dismissal of Chapter 13 Bankruptcy
When your Chapter 13 is successfully completed, you get a discharge. Bankruptcy Discharge = A successful bankruptcy.
When a Chapter 13 is dismissed, it is usually because the debtor could not keep up on the payments. Bankruptcy Dismissal = Failed bankruptcy.
See Jeff's Iowa Chapter 13 bankruptcy
Iowa Chapter 13 Bankruptcy Resources. The Federal Courts have good general Chapter 13 Information, Wikipedia has an article on the Chapter 13 Law. One of our best Iowa Chapter 13 bankruptcy attorneys, Mike Jankins handles both Chapter 7 and Chapter 13.
See Iowa Chapter 13 bankruptcy fees for information on fees. Chapter 13 Court administrative procedures. See bankruptcy rulings including Chapter 13 and Chapter 7.
Some terrific websites include Mark Markus Chapter 13 and Weintraub & Selth Chapter 13 Attorneys in Los Angeles, for legal advice in Missouri, Kansas City Chapter 13 bankruptcy attorney Doug Breyfogle, Colorado bankruptcy attorneys and Donne Goodwin who handles Florida Chapter 13 law.
Iowa Chapter 7 Bankruptcy - Full Discharge.
Chapter 7 bankruptcy is also known as "liquidation". In theory, your property is sold and the money given to creditors. But in fact, due to your allowable Iowa bankruptcy exemptions, you normally get to keep your home, cars, retirement and other assets, assuming reasonable pre-bankruptcy planning with your attorney and your exemptions are properly claimed. A lot of what we do as bankruptcy attorneys is keep up with frequent changes in application of the exemption rules. For example, one of our trustees recently discovered that whole life insurance cash value is non-exempt if the beneficiary is not the debtors spouse or child. So keeping up with these changes is a big part of what we bankruptcy attorneys do for our clients. Jeff's primary Iowa Bankruptcy website.
Video- Will I lose property if I file Iowa Chapter 7 Bankruptcy?
and
Iowa Chapter 13 Bankruptcy -5 Year Repayment of Debt.
The vast majority of people do full discharge Chapter 7 for a Fresh Start but sometimes a Chapter 13 has advantages.
Reasons People Consider Chapter 13 Bankruptcy:
High Income: If your income is too high to qualify for Chapter 7 full discharge, Chapter 13 may be your only option. Some people over Iowa median income can still file Chapter 7, others need to consider Chapter 13. Debtors who are over median income must pass the "bankruptcy means test" in order to still qualify for a Chapter 7.
The challenge with the means test is that you are limited to IRS collection guideline expenses, an application of the guidelines by the way that was never intended by and is not supported by the IRS. Many believe application of harsh collection guidelines that were designed for aggressive collection against tardy taxpayers is inappropriate for the collection of credit card and other consumer debt against struggling consumers, many of whom are in bankruptcy due to job loss, divorce or illness. But we are stuck with it due to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which was written by the banking industry with the intent of making it more difficult and expensive to file bankruptcy.
Tax Debt: In some case, Chapter 13 is better for handling tax debt since it can stop penalties and interest.
Catching Up: If you are behind on your home for example and need more time to catch up, (cure the default) you may want to consider Chapter 13. The first analysis here should always be equity. So determine a realistic home market value on your home based on comparable sales. Then add up balances on your first mortgage, second mortgage, home equity loan etc. and total them. If the total of loans is equal to or more than your market value, it may not make any sense to spend money on a Chapter 13 since you don't have equity.
Discharge Second Mortgage: In some cases with Chapter 13 you can keep your home and repay the first mortgage but discharge the second mortgage. Generally the current market value of your home must not exceed the balance of the first mortgage. Des Moines attorney Mike Jankins is great for these cases.
Cram Down: In some cases you may be able to reduce the amount owed on some secured debt like your car. This is known as a cram down because it reduces the loan balance. Unfortunately, the bankruptcy code prohibits adjustment of your home mortgage, the most needed cram down. Several attempts have been made in Congress to give Judges the ability to adjust home loans, without success.
Eligibility for Chapter 13 Bankruptcy
In order to be eligible for Chapter 13 bankruptcy, you must have regular income sufficient to repay your debt at least in part over five years. The regular income needs to be sufficiently stable and regular to enable you to make your Chapter 13 payments. Your attorney files a Chapter 13 plan that is then reviewed by the Court. If the Judge does not believe your income is regular enough to support regular repayments your plan will not be approved. In some cases, if your income drops during repayment you can convert to a Chapter 7 full discharge.
Unsecured debt can not exceed $290,525 and secured debt can not exceed $871,550.
Chapter 13 Repayment
Repayment begins within 30 days after the plan is filed.
Chapter 13 Repayment is normally for Five Years. The code provides for Three year repayment too, but it is difficult or impossible to get a three year plan approved under the more restrictive Chapter 13 code in effect since 2005. Your repayment amount is based on your "ability to repay" after deducting allowable expenses from your income.
See National Standards for Chapter 13 repayment and Iowa bankruptcy Local Housing and Utility Standards. As in many areas of the law, Chapter 13 bankruptcy is as much a matter of art as science. Experienced bankruptcy attorneys know what their local Judges and Chapter 13 bankruptcy Trustees will allow for expenses without a fight, meaning what you can do without spending a lot on attorney fees. US Courts Chapter 13 bankruptcy information.
The Chapter 13 Plan must provide for full repayment of bankruptcy priority debt like back taxes.
Discharge or Dismissal of Chapter 13 Bankruptcy
When your Chapter 13 is successfully completed, you get a discharge. Bankruptcy Discharge = A successful bankruptcy.
When a Chapter 13 is dismissed, it is usually because the debtor could not keep up on the payments. Bankruptcy Dismissal = Failed bankruptcy.
See Jeff's Iowa Chapter 13 bankruptcy
Iowa Chapter 13 Bankruptcy Resources. The Federal Courts have good general Chapter 13 Information, Wikipedia has an article on the Chapter 13 Law. One of our best Iowa Chapter 13 bankruptcy attorneys, Mike Jankins handles both Chapter 7 and Chapter 13.
See Iowa Chapter 13 bankruptcy fees for information on fees. Chapter 13 Court administrative procedures. See bankruptcy rulings including Chapter 13 and Chapter 7.
Some terrific websites include Mark Markus Chapter 13 and Weintraub & Selth Chapter 13 Attorneys in Los Angeles, for legal advice in Missouri, Kansas City Chapter 13 bankruptcy attorney Doug Breyfogle, Colorado bankruptcy attorneys and Donne Goodwin who handles Florida Chapter 13 law.
15.2.07
Bankruptcy Cases
Automatic Stay
The automatic stay (which takes effect the day your case is filed) is effective against all entities and brings almost all forms of civil legal action against the you to an abrupt halt, 11 USC 362(a)(1)-(8), Willford v. Armstrong World Industries, Inc., 715 F.2d 124, 126 (4th Cir. 1983). Hence, foreclosure, repossession, wage and bank garnishments etc. must stop upon filing of the petition.
Preference Payments
Payments to a fully secured creditor are generally not preferential. See, e.g., In re World Financial Services Center, Inc., 78 BR 239 (BAP, 9th Cir. 1987)
Exemptions
Student Loan Proceeds held in Savings are Exempt
20 U.S.C. 1095a(d) provides: "(d) No attachment of student assistance
Except as authorized in this section, notwithstanding any other provision of Federal or State law, no grant, loan, or work assistance awarded under this subchapter and part C of subchapter I of chapter 34 of Title 42, or property traceable to such assistance, shall be subject to garnishment or attachment in order to satisfy any debt owed by the student awarded such assistance, other than a debt owed to the Secretary and arising under this subchapter and part C of subchapter I of chapter 34 of Title 42."
Social Security Funds Held in Bank Accounts Exempt under Federal Statute
42 USC §407, Philpott v. Essex County Welfare Board, 409US 413, 93 S.Ct 590 (1973).
The automatic stay (which takes effect the day your case is filed) is effective against all entities and brings almost all forms of civil legal action against the you to an abrupt halt, 11 USC 362(a)(1)-(8), Willford v. Armstrong World Industries, Inc., 715 F.2d 124, 126 (4th Cir. 1983). Hence, foreclosure, repossession, wage and bank garnishments etc. must stop upon filing of the petition.
Preference Payments
Payments to a fully secured creditor are generally not preferential. See, e.g., In re World Financial Services Center, Inc., 78 BR 239 (BAP, 9th Cir. 1987)
Exemptions
Student Loan Proceeds held in Savings are Exempt
20 U.S.C. 1095a(d) provides: "(d) No attachment of student assistance
Except as authorized in this section, notwithstanding any other provision of Federal or State law, no grant, loan, or work assistance awarded under this subchapter and part C of subchapter I of chapter 34 of Title 42, or property traceable to such assistance, shall be subject to garnishment or attachment in order to satisfy any debt owed by the student awarded such assistance, other than a debt owed to the Secretary and arising under this subchapter and part C of subchapter I of chapter 34 of Title 42."
Social Security Funds Held in Bank Accounts Exempt under Federal Statute
42 USC §407, Philpott v. Essex County Welfare Board, 409US 413, 93 S.Ct 590 (1973).
10.2.07
Famous Bankrupt People & Corporations
Feel guilty about bankruptcy? Don't.
Americans have long used bankruptcy law to get a fresh start!
To get him out from under foot, in 1690 King Charles II granted William Penn an estate in the American colonies. Penn created a Quaker refuge and his manager borrowed to the hilt on the estate and fled with the money. Penn was left holding the bag and ended up in a British debtors prison. His former estate became the State of Pennsylvania.
Meriwether Lewis of Lewis & Clark fame, sent by President Jefferson to map the western territory went into debt to fund his explorations. He later stabbed himself to death on the way to debtors Court in St. Louis.
Frontiersman Daniel Boone borrowed to fund his fur-hunting expeditions, but it did not always work out. In some cases unfriendly Indians took his fur in exchange for letting him keep his scalp. Boone's lawyer said he had more lawsuits entered against him than any other man of his day. Boone's motivation for settling Kentucky was to avoid his creditors back east.
Abraham Lincoln's Illinois general store failed. After winning a spot in the State Legislature, Abe noticed his horse and saddle were gone. They were repossessed by the Sheriff! Later, he confided to a friend that debt was his life's greatest obstacle. Honest Abe also practiced Bankruptcy Law in Illinois before moving on to hold the United States together as President during the Civil War.
A resort investment gone bad led to Las Vegas superstar Wayne Newton's fresh start in 1992. Casino gambling was not approved for Pennsylvania after all and Newton lost his shirt.
Musician Mick Fleetwood got his fresh start in 1984 after taking a financial dive investing in Australian real estate and oil and gas.
Conrad Hilton lost all his hotels when he could not pay his bank during the great depression. Later, he bought them all back and built a few more.
J.C. Penney's first store went bankrupt when he refused to give Whiskey as a kickback for orders from a large customer. Penny went belly up and got a job in a drapery shop which he later purchased and expanded into 1100 department stores nationwide.
Famous Architect Frank Loyd Wright lost his home, Taliesin in Wisconsin and was thrown on the street when business dried up in 1922. During the following decade, he designed some of his most famous projects.
American Author Mark Twain spent nine years in Europe avoiding creditors of his defunct typewriter invention business. Twain returned to the United States in 1864 to file bankruptcy.
President Ulysses S. Grant lost his fortune in an early Ponzi scheme. Mark Twain helped Grant write his memoirs while Grant suffered from Cancer so the proceeds could support his family after his death.
Harry Truman opened a shop in Missouri after the First World War only to have it fail. He was humbled by having to move in with his mother-in-law. Truman settled his debt for pennies on the dollar when his bank went bankrupt! Later, he got a good job, in Washington, DC.
Roland Hussey Macy failed at selling ribbons, provisions to miners and at a general store before going bankrupt in 1855. His next effort, Macy's became the worlds largest store.
While in debtors prison, Charles Goodyear experimented with rubber mixes. Later he accidentally created weatherproof rubber by mixing in sulpher and applying heat. Goodyear had poor patent protection. The Goodyear company was named in his honor only, he saw few profits himself.
Walt Disney lost his company in Kansas City and moved to California with $40 in his pocket where he started another business.
Country Music Singer Willie Nelson got his fresh start after the IRS disallowed tax deductions and demanded a $9,000,000 check. Ouch!
Oskar Schindler spent all the money he had to feed, cloth and provide medicine to the 1098 Jews he saved while operating a factory in Poland during WWII. Schindler was en route to debtors prison when the people he saved and their families combined funds to pay off his debts and support Oskar until he died in 1974.
Actor Gary Burghoff, "Radar" from the film and TV series M.A.S.H. hit hard times after the show ended, filing bankruptcy in 1991. Now he sells his wildlife drawings for up to $25,000 each.
Famous "G Man" Eliot Ness (who captured the notorious Chicago Gangster Al Capone) tried politics in Cleveland but lost in a landslide after spending every dollar he could muster. His book "The Untouchables" bombed. After Ness died, his exploits were made famous in television and film; too late for Ness to benefit.
Film director Francis Ford Coppola's disdain for tight studio budgets led him to finance his own films. He made a movie called "One from the heart" for $30,000,000 and it produced $636,000 in revenue. But Coppola also directed The Godfather series, so all is forgiven and then some.
John Wayne Bobbitt gained fame when his wife, in an act of rage, removed his manhood with a razor. A 12 hour surgery successfully resulted in re-unification. When the uninsured Bobbit later went bankrupt, his doctors remarked, "He stiffed us", really.
Sam Walton's first store was a Ben Franklin discount shop which he made one of the most successful in the chain. Walton's problem was a short lease, when it expired, the buildings owner canceled his lease and took over the store himself. Walton had to start from scratch. He later created the largest company in the world and became a billionaire.
Rapper MC Hammer, unable to continue support of his 70 member posse, filed bankruptcy in 1996 saying, "It's time to stop bleeding and get on with my life".
65 Famous People Who Went Bust
More Famous & Bankrupt.
Big Corporate Bankruptcy Cases just since 2000:
Adelphia
Chrysler
Conseco
Delta
Delphi
ENRON
Enron set a new standard in corporate corruption by ginning up "profits" by institutionalized, systematic, and creatively planned accounting fraud. They were so corrupt, they also brought down one of the most respected American accounting firms, Arthur Andersen.
General Motors
General Growth Properties (Jordan Creek Town Center, West Des Moines, Iowa)
General Growth acquired expensive real estate leading up the the 2008 recession at which point it could not make its mortgage payments. Bankruptcy allowed General Growth to keep operating.
Global Crossing
Pacific Gas & Electric
Trump Entertainment (Third Time)
Tyco
US Air
IndyMac
Lehman Brothers
Think consumers balance transfers or cash advances can get out of hand? Lehman had $138,000,000,000 (billion) in Federal Reserve backed advances. Guess who paid for that one?
Northwest
Refco
SemGroup
Washington Mutual
WorldCom
45 Airline Bankruptcy Cases
Systemic change can spur industry wide bankruptcy: Trans World Airlines, US Air, United, Northwest, Delta, Skybus, Frontier etc. just as systemic change (recession/high unemployment, underemployment etc.) can spur wide consumer bankruptcy filings.
Also, we the people spent $700,000,000,000 (700 Billion) dollars to bail out Wall Street in 2008.
One of the reasons we have an incredibly efficient free market economy is the safety net of bankruptcy. Without the bankruptcy option, companies could not take risks and individuals would suffer indentured servitude. Bankruptcy rocks!
Jeff's favorite poem:
Stopping By Woods on a Snowy Evening
Whose woods these are I think I know.
His house is in the village though;
He will not see me stopping here
To watch his woods fill up with snow.
My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.
He gives his harness bells a shake
To ask if there is some mistake.
The only other sound's the sweep
Of easy wind and downy flake.
The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
-Robert Frost
Jeff's favorite song lyrics, Memory
Daylight
I must wait for the sunrise
I must think of a new life
And I musn't give in
When the dawn comes
Tonight will be a memory too
And a new day will begin
-Cats, the Musical
Jeff Mathias Law Office
4800 Mills Civic Pkwy
Suite 218
West Des Moines, IA 50265
1-800-997-1395
515-261-7526
jeff.mathias@gmail.com
Email Jeff Mathias
Americans have long used bankruptcy law to get a fresh start!
To get him out from under foot, in 1690 King Charles II granted William Penn an estate in the American colonies. Penn created a Quaker refuge and his manager borrowed to the hilt on the estate and fled with the money. Penn was left holding the bag and ended up in a British debtors prison. His former estate became the State of Pennsylvania.
Meriwether Lewis of Lewis & Clark fame, sent by President Jefferson to map the western territory went into debt to fund his explorations. He later stabbed himself to death on the way to debtors Court in St. Louis.
Frontiersman Daniel Boone borrowed to fund his fur-hunting expeditions, but it did not always work out. In some cases unfriendly Indians took his fur in exchange for letting him keep his scalp. Boone's lawyer said he had more lawsuits entered against him than any other man of his day. Boone's motivation for settling Kentucky was to avoid his creditors back east.
Abraham Lincoln's Illinois general store failed. After winning a spot in the State Legislature, Abe noticed his horse and saddle were gone. They were repossessed by the Sheriff! Later, he confided to a friend that debt was his life's greatest obstacle. Honest Abe also practiced Bankruptcy Law in Illinois before moving on to hold the United States together as President during the Civil War.
A resort investment gone bad led to Las Vegas superstar Wayne Newton's fresh start in 1992. Casino gambling was not approved for Pennsylvania after all and Newton lost his shirt.
Musician Mick Fleetwood got his fresh start in 1984 after taking a financial dive investing in Australian real estate and oil and gas.
Conrad Hilton lost all his hotels when he could not pay his bank during the great depression. Later, he bought them all back and built a few more.
J.C. Penney's first store went bankrupt when he refused to give Whiskey as a kickback for orders from a large customer. Penny went belly up and got a job in a drapery shop which he later purchased and expanded into 1100 department stores nationwide.
Famous Architect Frank Loyd Wright lost his home, Taliesin in Wisconsin and was thrown on the street when business dried up in 1922. During the following decade, he designed some of his most famous projects.
American Author Mark Twain spent nine years in Europe avoiding creditors of his defunct typewriter invention business. Twain returned to the United States in 1864 to file bankruptcy.
President Ulysses S. Grant lost his fortune in an early Ponzi scheme. Mark Twain helped Grant write his memoirs while Grant suffered from Cancer so the proceeds could support his family after his death.
Harry Truman opened a shop in Missouri after the First World War only to have it fail. He was humbled by having to move in with his mother-in-law. Truman settled his debt for pennies on the dollar when his bank went bankrupt! Later, he got a good job, in Washington, DC.
Roland Hussey Macy failed at selling ribbons, provisions to miners and at a general store before going bankrupt in 1855. His next effort, Macy's became the worlds largest store.
While in debtors prison, Charles Goodyear experimented with rubber mixes. Later he accidentally created weatherproof rubber by mixing in sulpher and applying heat. Goodyear had poor patent protection. The Goodyear company was named in his honor only, he saw few profits himself.
Walt Disney lost his company in Kansas City and moved to California with $40 in his pocket where he started another business.
Country Music Singer Willie Nelson got his fresh start after the IRS disallowed tax deductions and demanded a $9,000,000 check. Ouch!
Oskar Schindler spent all the money he had to feed, cloth and provide medicine to the 1098 Jews he saved while operating a factory in Poland during WWII. Schindler was en route to debtors prison when the people he saved and their families combined funds to pay off his debts and support Oskar until he died in 1974.
Actor Gary Burghoff, "Radar" from the film and TV series M.A.S.H. hit hard times after the show ended, filing bankruptcy in 1991. Now he sells his wildlife drawings for up to $25,000 each.
Famous "G Man" Eliot Ness (who captured the notorious Chicago Gangster Al Capone) tried politics in Cleveland but lost in a landslide after spending every dollar he could muster. His book "The Untouchables" bombed. After Ness died, his exploits were made famous in television and film; too late for Ness to benefit.
Film director Francis Ford Coppola's disdain for tight studio budgets led him to finance his own films. He made a movie called "One from the heart" for $30,000,000 and it produced $636,000 in revenue. But Coppola also directed The Godfather series, so all is forgiven and then some.
John Wayne Bobbitt gained fame when his wife, in an act of rage, removed his manhood with a razor. A 12 hour surgery successfully resulted in re-unification. When the uninsured Bobbit later went bankrupt, his doctors remarked, "He stiffed us", really.
Sam Walton's first store was a Ben Franklin discount shop which he made one of the most successful in the chain. Walton's problem was a short lease, when it expired, the buildings owner canceled his lease and took over the store himself. Walton had to start from scratch. He later created the largest company in the world and became a billionaire.
Rapper MC Hammer, unable to continue support of his 70 member posse, filed bankruptcy in 1996 saying, "It's time to stop bleeding and get on with my life".
65 Famous People Who Went Bust
More Famous & Bankrupt.
Big Corporate Bankruptcy Cases just since 2000:
Adelphia
Chrysler
Conseco
Delta
Delphi
ENRON
Enron set a new standard in corporate corruption by ginning up "profits" by institutionalized, systematic, and creatively planned accounting fraud. They were so corrupt, they also brought down one of the most respected American accounting firms, Arthur Andersen.
General Motors
General Growth Properties (Jordan Creek Town Center, West Des Moines, Iowa)
General Growth acquired expensive real estate leading up the the 2008 recession at which point it could not make its mortgage payments. Bankruptcy allowed General Growth to keep operating.
Global Crossing
Pacific Gas & Electric
Trump Entertainment (Third Time)
Tyco
US Air
IndyMac
Lehman Brothers
Think consumers balance transfers or cash advances can get out of hand? Lehman had $138,000,000,000 (billion) in Federal Reserve backed advances. Guess who paid for that one?
Northwest
Refco
SemGroup
Washington Mutual
WorldCom
45 Airline Bankruptcy Cases
Systemic change can spur industry wide bankruptcy: Trans World Airlines, US Air, United, Northwest, Delta, Skybus, Frontier etc. just as systemic change (recession/high unemployment, underemployment etc.) can spur wide consumer bankruptcy filings.
Also, we the people spent $700,000,000,000 (700 Billion) dollars to bail out Wall Street in 2008.
One of the reasons we have an incredibly efficient free market economy is the safety net of bankruptcy. Without the bankruptcy option, companies could not take risks and individuals would suffer indentured servitude. Bankruptcy rocks!
Jeff's favorite poem:
Stopping By Woods on a Snowy Evening
Whose woods these are I think I know.
His house is in the village though;
He will not see me stopping here
To watch his woods fill up with snow.
My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.
He gives his harness bells a shake
To ask if there is some mistake.
The only other sound's the sweep
Of easy wind and downy flake.
The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
-Robert Frost
Jeff's favorite song lyrics, Memory
Daylight
I must wait for the sunrise
I must think of a new life
And I musn't give in
When the dawn comes
Tonight will be a memory too
And a new day will begin
-Cats, the Musical
Jeff Mathias Law Office
4800 Mills Civic Pkwy
Suite 218
West Des Moines, IA 50265
1-800-997-1395
515-261-7526
jeff.mathias@gmail.com
Email Jeff Mathias
6.1.07
Bankruptcy Cases
Following are some of the bankruptcy court decisions (cases) interpreting the United States Code Section providing for consumer bankruptcy relief.
The automatic stay (which takes effect the day your case is filed) is effective against all entities and brings almost all forms of civil legal action against the you to an abrupt halt, 11 USC 362(a)(1)-(8), Willford v. Armstrong World Industries, Inc., 715 F.2d 124, 126 (4th Cir. 1983). Hence, foreclosure, repossession, wage and bank garnishments etc. must stop upon filing of the petition.
Actions taken in violation of the stay are void as a matter of law, see In Re Schwartz, 954 F.2d 569, 26 C.B.C.2d 649 (9th Cir. 1992) (IRS violation of stay was void, not voidable).
Acceptance of payroll deductions after filing violates the automatic stay, Matter of Hellums, 772 F2d 379 (7th Cir. 1985).
A driver’s license revocation based on an unpaid accident judgment cannot be continued after discharge, Perez v. Campbell, 402 U.S. 637, 91 S. Ct. 1704 (1971).
Withholding of a student’s college transcript for non-payment of a discharged debt is prohibited, In re Merchant, 958 F.2d 738 (6th Cir. 1992).
Attorney fees and costs are mandatory for willful violation of the automatic stay and punitive damages are also available, United States v. Ketelson, 880 F.2d 990, 993 (8th Cir. 1989).
Recent Iowa cases: Discharge of Student Loans:
(note, all cases are abbreviated)
KENNETH RAY TINDER Bankruptcy No. 05-01190
DATED AND ENTERED: April 14, 2009
Facts: Debtor attended Chiropractic College from October 1985 to October 1988. Debtor practiced as a chiropractor briefly after which he became otherwise employed.
Law: Student loan debt is not discharged “unless excepting such debt from discharge . . . would impose an undue hardship on the debtor and the debtor’s dependent’s.” 11 U.S.C. § 523(a)(8). The debtor has the burden to prove undue hardship by a preponderance of the evidence. Undue hardship requires “a certainty of hopelessness that the loans will be repaid'. The standard for student loan discharge is intentionally set very high.
The totality of the circumstances test includes an examination of the following factors:
(1) the debtor’s past, present, and reasonably reliable future financial resources; (2) a calculation of the debtor’s and dependent’s reasonable necessary living expenses; and (3) any other relevant facts and circumstances surrounding each particular bankruptcy case. Simply put, if the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt – while still allowing for a minimal standard of living – then the debt should not be discharged.
Holding: Debtor has not established that he is entitled to an “undue hardship” discharge of his student loan debt. Debtor has sufficient income to make significant payments on his student loan debts. Debtor did not make a reasonable effort to pay his student loans when he was earning sufficient income. Finally, Debtor will need to delay his retirement but this burden is mitigated by his failure to make payments when he had sufficient income to do so. As Debtor has not established an undue hardship, his student loan debts are excepted from discharge under § 523(a)(8). United States Bankruptcy Court Northern District of Iowa
Johnston v. Fifth Third Bankcorp. (In re Johnston), Ch. 7, No. 05-05136, Adv. 06-09110, 2008 WL 687002 (Bankr. N.D. Iowa Mar. 11, 2008) (student loan debt discharged for undue hardship)
Facts: Debtor seeks an undue hardship discharge of her student loan under § 523(a)(8). ECMC asserts Debtor is able to pay the student loan without undue hardship.
Holding: Debtor is currently suffering severe financial circumstances and will continue to do so into the indefinite future in light of her chronic illness. A fair evaluation of this record reveals a very candid debtor who has no reasonable possibility of paying any meaningful amount toward these student loans. She has met her burden by establishing that excepting the student loan debt to ECMC from discharge will impose an undue hardship on her. United States Bankruptcy Court Northern District of Iowa
Video talks about the American Courts philosophy on bankruptcy. Better to "draw a line in the sand" and take responsibility for future debt than to keep taking on debt we can never repay.
*********************************
Cities served by Jeff Mathias Law Office in Iowa include Ames, Albia, Altoona, Ankeny, Atlantic and Bettendorf. Chapter 7 bankruptcy for Bloomfield, Bondurant, Boone, Burlington, Centerville and Chariton. We represent debtors in Clarinda, Clinton, Clive, Council Bluffs, Corning and Creston. Bankruptcy law cases filed for Cumming, Davenport, Des Moines, Dewitt and Fairfield. Iowa bankruptcy information for Fort Madison, Glenwood, Greenfield, Grimes, Grinnell and Guthrie Center, Iowa. Bankruptcy filing for Indianola, Iowa City, Jefferson, Johnston, Keokuk, Keosauqua and Knoxville. Filing bankruptcy for Leon, Marshalltown, Osceola, Pella,
The automatic stay (which takes effect the day your case is filed) is effective against all entities and brings almost all forms of civil legal action against the you to an abrupt halt, 11 USC 362(a)(1)-(8), Willford v. Armstrong World Industries, Inc., 715 F.2d 124, 126 (4th Cir. 1983). Hence, foreclosure, repossession, wage and bank garnishments etc. must stop upon filing of the petition.
Actions taken in violation of the stay are void as a matter of law, see In Re Schwartz, 954 F.2d 569, 26 C.B.C.2d 649 (9th Cir. 1992) (IRS violation of stay was void, not voidable).
Acceptance of payroll deductions after filing violates the automatic stay, Matter of Hellums, 772 F2d 379 (7th Cir. 1985).
A driver’s license revocation based on an unpaid accident judgment cannot be continued after discharge, Perez v. Campbell, 402 U.S. 637, 91 S. Ct. 1704 (1971).
Withholding of a student’s college transcript for non-payment of a discharged debt is prohibited, In re Merchant, 958 F.2d 738 (6th Cir. 1992).
Attorney fees and costs are mandatory for willful violation of the automatic stay and punitive damages are also available, United States v. Ketelson, 880 F.2d 990, 993 (8th Cir. 1989).
Recent Iowa cases: Discharge of Student Loans:
(note, all cases are abbreviated)
KENNETH RAY TINDER Bankruptcy No. 05-01190
DATED AND ENTERED: April 14, 2009
Facts: Debtor attended Chiropractic College from October 1985 to October 1988. Debtor practiced as a chiropractor briefly after which he became otherwise employed.
Law: Student loan debt is not discharged “unless excepting such debt from discharge . . . would impose an undue hardship on the debtor and the debtor’s dependent’s.” 11 U.S.C. § 523(a)(8). The debtor has the burden to prove undue hardship by a preponderance of the evidence. Undue hardship requires “a certainty of hopelessness that the loans will be repaid'. The standard for student loan discharge is intentionally set very high.
The totality of the circumstances test includes an examination of the following factors:
(1) the debtor’s past, present, and reasonably reliable future financial resources; (2) a calculation of the debtor’s and dependent’s reasonable necessary living expenses; and (3) any other relevant facts and circumstances surrounding each particular bankruptcy case. Simply put, if the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt – while still allowing for a minimal standard of living – then the debt should not be discharged.
Holding: Debtor has not established that he is entitled to an “undue hardship” discharge of his student loan debt. Debtor has sufficient income to make significant payments on his student loan debts. Debtor did not make a reasonable effort to pay his student loans when he was earning sufficient income. Finally, Debtor will need to delay his retirement but this burden is mitigated by his failure to make payments when he had sufficient income to do so. As Debtor has not established an undue hardship, his student loan debts are excepted from discharge under § 523(a)(8). United States Bankruptcy Court Northern District of Iowa
Johnston v. Fifth Third Bankcorp. (In re Johnston), Ch. 7, No. 05-05136, Adv. 06-09110, 2008 WL 687002 (Bankr. N.D. Iowa Mar. 11, 2008) (student loan debt discharged for undue hardship)
Facts: Debtor seeks an undue hardship discharge of her student loan under § 523(a)(8). ECMC asserts Debtor is able to pay the student loan without undue hardship.
Holding: Debtor is currently suffering severe financial circumstances and will continue to do so into the indefinite future in light of her chronic illness. A fair evaluation of this record reveals a very candid debtor who has no reasonable possibility of paying any meaningful amount toward these student loans. She has met her burden by establishing that excepting the student loan debt to ECMC from discharge will impose an undue hardship on her. United States Bankruptcy Court Northern District of Iowa
Video talks about the American Courts philosophy on bankruptcy. Better to "draw a line in the sand" and take responsibility for future debt than to keep taking on debt we can never repay.
*********************************
Cities served by Jeff Mathias Law Office in Iowa include Ames, Albia, Altoona, Ankeny, Atlantic and Bettendorf. Chapter 7 bankruptcy for Bloomfield, Bondurant, Boone, Burlington, Centerville and Chariton. We represent debtors in Clarinda, Clinton, Clive, Council Bluffs, Corning and Creston. Bankruptcy law cases filed for Cumming, Davenport, Des Moines, Dewitt and Fairfield. Iowa bankruptcy information for Fort Madison, Glenwood, Greenfield, Grimes, Grinnell and Guthrie Center, Iowa. Bankruptcy filing for Indianola, Iowa City, Jefferson, Johnston, Keokuk, Keosauqua and Knoxville. Filing bankruptcy for Leon, Marshalltown, Osceola, Pella,
Pleasant Hill, Lamoni and Madrid. Bankrupcy attorney for Mitchellville, Montezuma, Mount Pleasant, Muscatine, Nevada and New Sharon. Bankrupcy lawyer for Newton, North Liberty, Norwalk, Ogden and Oskaloosa. Chapter 7 bankruptcy for Ottumwa, Panora, Red Oak, Shenandoah, Story City bankruptcy cases as well as Urbandale, Washington, West Des Moines & Windsor Heights, Iowa.
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