Jeff Mathias, Iowa Bankruptcy Attorney - Des Moines

Welcome from Jeff Mathias!

2012-01-17T15:52:00.004-06:00

HOT ISSUES from Jeff:
If you receive more than $1,000 single or $2,000 joint in refunds, let Jeff know before filing your bankruptcy.
If you are filing bankruptcy after tax refunds are received, don't repay family for Past Due Debt! Email Jeff & tell him how you plan to spend your refunds before doing so, to avoid problems with your bankruptcy.

Questions? Email Jeff

Income Determines Eligibility

2011-10-16T17:00:00.007-06:00

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.

Iowa Annual Gross Median Income for Chapter 7 Bankruptcy
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.

If Married, you can File Joint or Single Bankruptcy

2011-10-15T10:14:00.000-06:00

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

Your Choice: Keep or Surrender Home & Cars

2011-10-14T10:16:00.001-06:00

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

Credit After Bankruptcy

2011-10-13T10:23:00.000-06:00

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

Getting Started

2011-10-12T10:25:00.006-06:00

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:
__$1806 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.

Jeff's Office- 4800 Mills Civic, Suite 218, West Des Moines

2011-10-11T23:35:00.000-06:00

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.

Iowa Chapter 7 Bankruptcy Exemptions in Detail

2011-10-09T09:26:00.006-06:00

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

Iowa Chapter 7 Bankruptcy - Mistakes to Avoid & Reaffirmation

2011-10-08T17:48:00.001-06:00

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.

Iowa Bankruptcy Court Location

2011-10-07T14:47:00.003-06:00

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.

Iowa Bankruptcy Court, Fed. Bldg. Mapquest

Iowa Foreclosure Law

2011-10-05T11:20:00.000-06:00

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.

Bankruptcy Alternatives

2011-10-04T22:56:00.000-06:00

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.

We are a debt relief agency. We help people file for relief under the Bankruptcy Code

2011-10-03T10:41:00.001-06:00

Success! A completed Iowa Bankruptcy Petition.

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

Iowa Attorneys and Law Firms

2011-10-02T09:06:00.000-06:00

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 Chapter 13 Bankruptcy

2011-10-01T14:22:00.033-06:00

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.

Bankruptcy Cases

2007-02-15T10:54:00.008-06:00

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).

Famous Bankrupt People & Corporations

2007-02-10T19:19:00.021-06:00

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

Bankruptcy Cases

2007-01-06T21:59:00.047-06:00

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,

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.

Iowa Bankruptcy Resources

2007-01-05T09:16:00.012-06:00

Your right to bankruptcy relief appears in Article I, Section 8 of the United States Constitution: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States".

The United States Bankruptcy Code is the statutory law bankruptcy courts rely on in enabling you to get your fresh start

The Federal Rules of Bankruptcy Procedure guide bankruptcy Courts in applying the bankruptcy code.

The most respected practice manual for bankruptcy attorneys is Collier on Bankruptcy.

For online access to bankruptcy documents, see Electronic Case Filing - Online Database of Public Bankruptcy Documents. Most Federal Bankruptcy Court sites also have access to local bankruptcy files online. Searchable by name or case number.

See Chapter 7 Basics for a discussion of how your median income impacts your bankruptcy case.

The United States Trustee represents the Executive branch in administering the bankruptcy code. Local panel trustee's (the person who administers your hearing in most jurisdictions) reports to the United States Trustee through Assistant U.S. Bankruptcy Trustee's.

Findlaw Bankruptcy Basics

The major Credit Report providers are Equifax, Experian, and TransUnion. Beware that not all creditors report so your report may not include everything, especially medical debt. Also, in my opinion, Free Credit Report type websites are worth about what you pay for them, they often are not very complete.

For valuation of your vehicles, check Kelley Blue Book.

For general bankruptcy information and research, Google is surprisingly effective. Use specific search terms or simply type in a question. For example: "How long do I have to wait to file bankruptcy again" is a more effective search than "bankruptcy eligibility".

Wikipedia has some good articles on bankruptcy and is a great starting point for general inquiries on almost any topic. Chapter 7, Title 11 of the United States Code

Craigslist legal forum is an interesting place to post legal questions and read responses which may be helpful or just plain strange.

Some popular bankruptcy sites include Nolo Bankruptcy which include Chapter 7 and Chapter 13 information, Wikipedia on bankruptcy provides an overview of personal and business bankruptcy, the United States Bankruptcy Courts site, the bankruptcy basics provided by the U.S. Bankruptcy Courts and bankrupt.com internet bankruptcy library. Cornell University has bankruptcy information online, NACBA is the consumer bankruptcy association and ABI represents more creditors on personal bankruptcy.

***

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

Questions?
Email Iowa Bankruptcy Attorney Jeff Mathias
or
Call Jeff: Des Moines 515-261-7526, Toll Free 1-800-997-1395.

Jeff Mathias Law Office
4800 Mills Civic Pkwy
Suite 218
West Des Moines, Iowa 50265
515-261-7526
800-997-1395

Selected Bankruptcy Code Sections with Jeff's Notes

2007-01-05T08:42:00.005-06:00

11 USC 101- Social Security is NOT INCLUDED in "Bankruptcy income" for eligibility purposes:
(10A) The term “current monthly income”—
...excludes benefits received under the Social Security Act.

11 USC 109- You can file bankruptcy in a particular district if you reside there, domicile there, have a business there or own property there:
(a) Notwithstanding any other provision of this section, only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.
Jeff's Note- So you do not need to live in Iowa to file here if you own property here or have a place of business here. Also, if you have more than one home the code also does not require filing in the state with the primary residence, you can file where you have a residence (domicile).

11 USC 521 Debtors Duties
This section has a lot going on. It requires debtors to provide 60 days of pay stubs, disclose anticipated income increases, act on scheduled intentions to keep or surrender property, addresses whether debtors can keep & pay home or car, requires filing of the credit counseling certificate, requires providing tax returns to the trustee and provides for automatic dismissal for failure to do so, & requires filing of past due tax returns. Of course in my office I help you comply with all this stuff.

(a) The debtor shall—
(1) file—
(A) a list of creditors; and
(B) unless the court orders otherwise—
(i) a schedule of assets and liabilities;
(ii) a schedule of current income and current expenditures;
(iii) a statement of the debtor’s financial affairs and, if section 342 (b) applies, a certificate—
(I) of an attorney whose name is indicated on the petition as the attorney for the debtor, or a bankruptcy petition preparer signing the petition under section 110 (b)(1), indicating that such attorney or the bankruptcy petition preparer delivered to the debtor the notice required by section 342 (b); or
(II) if no attorney is so indicated, and no bankruptcy petition preparer signed the petition, of the debtor that such notice was received and read by the debtor;
(iv) copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by the debtor from any employer of the debtor;
(v) a statement of the amount of monthly net income, itemized to show how the amount is calculated; and
(vi) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition;
(2) if an individual debtor’s schedule of assets and liabilities includes debts which are secured by property of the estate—
(A) within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, the debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property;
(B) within 30 days after the first date set for the meeting of creditors under section 341 (a), or within such additional time as the court, for cause, within such 30-day period fixes, the debtor shall perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor’s or the trustee’s rights with regard to such property under this title, except as provided in section 362 (h);
(3) if a trustee is serving in the case or an auditor serving under section 586 (f) of title 28, cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title;
(4) if a trustee is serving in the case or an auditor serving under section 586 (f) of title 28, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, whether or not immunity is granted under section 344 of this title;
(5) appear at the hearing required under section 524 (d) of this title;
(6) in a case under chapter 7 of this title in which the debtor is an individual, not retain possession of personal property as to which a creditor has an allowed claim for the purchase price secured in whole or in part by an interest in such personal property unless the debtor, not later than 45 days after the first meeting of creditors under section 341 (a), either—
(A) enters into an agreement with the creditor pursuant to section 524 (c) with respect to the claim secured by such property; or
(B) redeems such property from the security interest pursuant to section 722; and
(7) unless a trustee is serving in the case, continue to perform the obligations required of the administrator (as defined in section 3 of the Employee Retirement Income Security Act of 1974) of an employee benefit plan if at the time of the commencement of the case the debtor (or any entity designated by the debtor) served as such administrator.
If the debtor fails to so act within the 45-day period referred to in paragraph (6), the stay under section 362 (a) is terminated with respect to the personal property of the estate or of the debtor which is affected, such property shall no longer be property of the estate, and the creditor may take whatever action as to such property as is permitted by applicable nonbankruptcy law, unless the court determines on the motion of the trustee filed before the expiration of such 45-day period, and after notice and a hearing, that such property is of consequential value or benefit to the estate, orders appropriate adequate protection of the creditor’s interest, and orders the debtor to deliver any collateral in the debtor’s possession to the trustee.
(b) In addition to the requirements under subsection (a), a debtor who is an individual shall file with the court—
(1) a certificate from the approved nonprofit budget and credit counseling agency that provided the debtor services under section 109 (h) describing the services provided to the debtor; and
(2) a copy of the debt repayment plan, if any, developed under section 109 (h) through the approved nonprofit budget and credit counseling agency referred to in paragraph (1).
(c) In addition to meeting the requirements under subsection (a), a debtor shall file with the court a record of any interest that a debtor has in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) or under a qualified State tuition program (as defined in section 529(b)(1) of such Code).
(d) If the debtor fails timely to take the action specified in subsection (a)(6) of this section, or in paragraphs (1) and (2) of section 362 (h), with respect to property which a lessor or bailor owns and has leased, rented, or bailed to the debtor or as to which a creditor holds a security interest not otherwise voidable under section 522 (f), 544, 545, 547, 548, or 549, nothing in this title shall prevent or limit the operation of a provision in the underlying lease or agreement that has the effect of placing the debtor in default under such lease or agreement by reason of the occurrence, pendency, or existence of a proceeding under this title or the insolvency of the debtor. Nothing in this subsection shall be deemed to justify limiting such a provision in any other circumstance.
(e)
(1) If the debtor in a case under chapter 7 or 13 is an individual and if a creditor files with the court at any time a request to receive a copy of the petition, schedules, and statement of financial affairs filed by the debtor, then the court shall make such petition, such schedules, and such statement available to such creditor.
(2)
(A) The debtor shall provide—
(i) not later than 7 days before the date first set for the first meeting of creditors, to the trustee a copy of the Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such return) for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed; and
(ii) at the same time the debtor complies with clause (i), a copy of such return (or if elected under clause (i), such transcript) to any creditor that timely requests such copy.
(B) If the debtor fails to comply with clause (i) or (ii) of subparagraph (A), the court shall dismiss the case unless the debtor demonstrates that the failure to so comply is due to circumstances beyond the control of the debtor.
(C) If a creditor requests a copy of such tax return or such transcript and if the debtor fails to provide a copy of such tax return or such transcript to such creditor at the time the debtor provides such tax return or such transcript to the trustee, then the court shall dismiss the case unless the debtor demonstrates that the failure to provide a copy of such tax return or such transcript is due to circumstances beyond the control of the debtor.
(3) If a creditor in a case under chapter 13 files with the court at any time a request to receive a copy of the plan filed by the debtor, then the court shall make available to such creditor a copy of the plan—
(A) at a reasonable cost; and
(B) not later than 5 days after such request is filed.
(f) At the request of the court, the United States trustee, or any party in interest in a case under chapter 7, 11, or 13, a debtor who is an individual shall file with the court—
(1) at the same time filed with the taxing authority, a copy of each Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such tax return) with respect to each tax year of the debtor ending while the case is pending under such chapter;
(2) at the same time filed with the taxing authority, each Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such tax return) that had not been filed with such authority as of the date of the commencement of the case and that was subsequently filed for any tax year of the debtor ending in the 3-year period ending on the date of the commencement of the case;
(3) a copy of each amendment to any Federal income tax return or transcript filed with the court under paragraph (1) or (2); and
(4) in a case under chapter 13—
(A) on the date that is either 90 days after the end of such tax year or 1 year after the date of the commencement of the case, whichever is later, if a plan is not confirmed before such later date; and
(B) annually after the plan is confirmed and until the case is closed, not later than the date that is 45 days before the anniversary of the confirmation of the plan;
a statement, under penalty of perjury, of the income and expenditures of the debtor during the tax year of the debtor most recently concluded before such statement is filed under this paragraph, and of the monthly income of the debtor, that shows how income, expenditures, and monthly income are calculated.
(g)
(1) A statement referred to in subsection (f)(4) shall disclose—
(A) the amount and sources of the income of the debtor;
(B) the identity of any person responsible with the debtor for the support of any dependent of the debtor; and
(C) the identity of any person who contributed, and the amount contributed, to the household in which the debtor resides.
(2) The tax returns, amendments, and statement of income and expenditures described in subsections (e)(2)(A) and (f) shall be available to the United States trustee (or the bankruptcy administrator, if any), the trustee, and any party in interest for inspection and copying, subject to the requirements of section 315(c) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
(h) If requested by the United States trustee or by the trustee, the debtor shall provide—
(1) a document that establishes the identity of the debtor, including a driver’s license, passport, or other document that contains a photograph of the debtor; or
(2) such other personal identifying information relating to the debtor that establishes the identity of the debtor.
(i)
(1) Subject to paragraphs (2) and (4) and notwithstanding section 707 (a), if an individual debtor in a voluntary case under chapter 7 or 13 fails to file all of the information required under subsection (a)(1) within 45 days after the date of the filing of the petition, the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition.
(2) Subject to paragraph (4) and with respect to a case described in paragraph (1), any party in interest may request the court to enter an order dismissing the case. If requested, the court shall enter an order of dismissal not later than 5 days after such request.
(3) Subject to paragraph (4) and upon request of the debtor made within 45 days after the date of the filing of the petition described in paragraph (1), the court may allow the debtor an additional period of not to exceed 45 days to file the information required under subsection (a)(1) if the court finds justification for extending the period for the filing.
(4) Notwithstanding any other provision of this subsection, on the motion of the trustee filed before the expiration of the applicable period of time specified in paragraph (1), (2), or (3), and after notice and a hearing, the court may decline to dismiss the case if the court finds that the debtor attempted in good faith to file all the information required by subsection (a)(1)(B)(iv) and that the best interests of creditors would be served by administration of the case.
(j)
(1) Notwithstanding any other provision of this title, if the debtor fails to file a tax return that becomes due after the commencement of the case or to properly obtain an extension of the due date for filing such return, the taxing authority may request that the court enter an order converting or dismissing the case.
(2) If the debtor does not file the required return or obtain the extension referred to in paragraph (1) within 90 days after a request is filed by the taxing authority under that paragraph, the court shall convert or dismiss the case, whichever is in the best interests of creditors and the estate.

11 USC § 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt--
(1) for a tax or a customs duty--
(A) of the kind and for the periods specified in section 507(a)(3) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, or equivalent report or notice, if required--
(i) was not filed or given; or
(ii) was filed or given after the date on which such return, report, or notice was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or
(C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax;
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by--
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)--
(I) consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 [$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years by section 104. Adjusted amounts effective 4-1-07 are in brackets.]
(ii) for purposes of this subparagraph--
(I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.
(3) neither listed nor scheduled under section 521(1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit--
(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request;
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
(5) for a domestic support obligation;
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity;
(7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty--
(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition;
(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for--
(A)
(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;
(9) for death or personal injury caused by the debtor's operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance;
(10) that was or could have been listed or scheduled by the debtor in a prior case concerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge, or was denied a discharge under section 727(a)(2), (3), (4), (5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of such Act;
(11) provided in any final judgment, unreviewable order, or consent order or decree entered in any court of the United States or of any State, issued by a Federal depository institutions regulatory agency, or contained in any settlement agreement entered into by the debtor, arising from any act of fraud or defalcation while acting in a fiduciary capacity committed with respect to any depository institution or insured credit union;
(12) for malicious or reckless failure to fulfill any commitment by the debtor to a Federal depository institutions regulatory agency to maintain the capital of an insured depository institution, except that this paragraph shall not extend any such commitment which would otherwise be terminated due to any act of such agency;
(13) for any payment of an order of restitution issued under title 18, United States Code;
(14) incurred to pay a tax to the United States that would be nondischargeable pursuant to paragraph (1);
(14A) incurred to pay a tax to a governmental unit, other than the United States, that would be nondischargeable under paragraph (1);
(14B) incurred to pay fines or penalties imposed under Federal election law;
(15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit;
(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership , in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;
(17) for a fee imposed on a prisoner by any court for the filing of a case, motion, complaint, or appeal, or for other costs and expenses assessed with respect to such filing, regardless of an assertion of poverty by the debtor under subsection (b) or (f)(2) of section 1915 of title 28 (or a similar non-Federal law), or the debtor's status as a prisoner, as defined in section 1915(h) of title 28 (or a similar non-Federal law);
(18) owed to a pension, profit-sharing, stock bonus, or other plan established under section 401, 403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue Code of 1986, under--
(A) a loan permitted under section 408(b)(1) of the Employee Retirement Income Security Act of 1974, or subject to section 72(p) of the Internal Revenue Code of 1986; or
(B) a loan from a thrift savings plan permitted under subchapter III of chapter 84 of title 5, that satisfies the requirements of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title; or
(19) that--
(A) is for--
(i) the violation of any of the Federal securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or
(ii) common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and
(B) results, before, on, or after the date on which the petition was filed, from--
(i) any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding;
(ii) any settlement agreement entered into by the debtor; or
(iii) any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other payment owed by the debtor.
For purposes of this subsection, the term "return" means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements). Such term includes a return prepared pursuant to section 6020(a) of the Internal Revenue Code of 1986, or similar State or local law, or a written stipulation to a judgment or a final order entered by a nonbankruptcy tribunal, but does not include a return made pursuant to section 6020(b) of the Internal Revenue Code of 1986, or a similar State or local law.
(b) Notwithstanding subsection (a) of this section, a debt that was excepted from discharge under subsection (a)(1), (a)(3), or (a)(8) of this section, under section 17a(1), 17a(3), or 17a(5) of the Bankruptcy Act, under section 439A of the Higher Education Act of 1965, or under section 733(g) of the Public Health Service Act in a prior case concerning the debtor under this title, or under the Bankruptcy Act, is dischargeable in a case under this title unless, by the terms of subsection (a) of this section, such debt is not dischargeable in the case under this title.
(c)
(1) Except as provided in subsection (a)(3)(B) of this section, the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) of this section, unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge under paragraph (2), (4), or (6) , as the case may be, of subsection (a) of this section.
(2) Paragraph (1) shall not apply in the case of a Federal depository institutions regulatory agency seeking, in its capacity as conservator, receiver, or liquidating agent for an insured depository institution, to recover a debt described in subsection (a)(2), (a)(4), (a)(6), or (a)(11) owed to such institution by an institution-affiliated party unless the receiver, conservator, or liquidating agent was appointed in time to reasonably comply, or for a Federal depository institutions regulatory agency acting in its corporate capacity as a successor to such receiver, conservator, or liquidating agent to reasonably comply, with subsection (a)(3)(B) as a creditor of such institution-affiliated party with respect to such debt.
(d) If a creditor requests a determination of dischargeability of a consumer debt under subsection (a)(2) of this section, and such debt is discharged, the court shall grant judgment in favor of the debtor for the costs of, and a reasonable attorney’s fee for, the proceeding if the court finds that the position of the creditor was not substantially justified, except that the court shall not award such costs and fees if special circumstances would make the award unjust.
(e) Any institution-affiliated party of an insured depository institution shall be considered to be acting in a fiduciary capacity with respect to the purposes of subsection (a)(4) or (11).

Jeff's Notes: As with many laws, the bankruptcy code is often proscriptive, meaning it tells you what you can't do. 11 USC 523 lists out debts NOT DISCHARGED. The most common are certain (recent) back taxes, debt acquired fraudulently, student loans, and child support. Debts arising from drunken driving accident injuries are not discharged. Debt ordered paid in a divorce decree is not discharged although banks don't have access to divorce decrees, so in my experience they treat this debt as dischargeable anyway.

Iowa Bankruptcy attorney Jeff Mathias handles Chapter 7 bankruptcy matters from his Des Moines office at 4800 Mills Civic Parkway, Suite 218, West Des Moines Iowa 50265.
Also see Jeff's Iowa Bankruptcy Law and Iowa Chapter 7 Bankruptcy guide and Iowa Foreclosure Law information.

Jeff Mathias Law Office
4800 Mills Civic Parkway, Suite 218
West Des Moines, Iowa 50265
515-261-7526
1-800-997-1395
Email Jeff Mathias
See Jeff's primary Iowa Bankruptcy website and Iowa Bankruptcy Guide for more. Also see Jeff's Iowa Attorneys site.

Copyright 2011, Jeff Mathias Law Office , All Rights Reserved

Can my Wages be Garnished in Iowa?

2007-01-04T14:40:00.007-06:00

Iowa Code Section 642.21 spells out when and to what extent wages can be garnished.

For debtors with wages under:
$12,000/year, the annual limit on wage garnishment is $250
$16,000/year, the annual limit on wage garnishment is $400
$24,000/year, the annual limit on wage garnishment is $800
$35,000/year, the annual limit on wage garnishment is $1500
$50,000/year, the annual limit on wage garnishment is $2000

For debtors with wages over $50,000/year, the annual limit
on wage garnishment is 10% of Wages

See Text of Iowa Code Section 642.21- Wage Garnishment

Of course, filing Iowa Chapter 7 bankruptcy puts a stop to wage garnishment.

JEFF MATHIAS LAW OFFICE
4800 MILLS CIVIC PARKWAY, SUITE 218
WEST DES MOINES, IOWA 50265
515-261-7526
MATHIASLAW.COM
Email Jeff Mathias

Important Bankruptcy Law Cases

2007-01-03T22:57:00.000-06:00

Below are several bankruptcy law cases covering issues that may be of interest to debtors in general.

United States Bankruptcy Court
Bankruptcy Court Cases

U.S. Bankruptcy Courts interpret the bankruptcy code and issue rulings that are intended to guide future cases. Although U.S. Bankruptcy Court rulings sometimes conflict, the following cases are generally accepted in the bankruptcy law issues they address.

Bankruptcy Automatic Stay

The automatic bankruptcy stay (which takes effect the day your bankruptcy case is filed) is effective against all entities and brings almost all forms of civil legal action against 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). This is a U.S. Bankruptcy Court decision from the 4th Circuit. See Bankruptcy Law Terms

Bankruptcy Automatic Stay

The bankruptcy petition operates as the stay and is automatic and self-operating, NLT Computer Services Corp. v. Capital Computer Systems, Inc., 755 F.2d 1253, 1258 (6th Cir. 1985). This is a U.S. Bankruptcy Court decision from the 6th Circuit.

Bankruptcy Stay applies to non-bankruptcy Court

Counsel bringing an action against the debtor has a duty to take action to halt a non-bankruptcy court action, In re. Atkins, 176 B.R. 998 (Bankr. D. Minn. 1994). This is a U.S. Bankruptcy Court decision from Minnesota.

Bankruptcy stay Violations

Actions taken in violation of the bankruptcy 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). This is a U.S. Bankruptcy Court decision from the 9th Circuit.

Innocent Bankruptcy Stay Violations

Even when a violation begins innocently, refusal to rectify it after notice of the case renders in willful, see In re Carrigg, 216 B.R. 303 (B.A.P. 1st Cir. 1998). This is a U.S. Bankruptcy Court decision from the 1st circuit Bankruptcy Appellate Panel.

Creditors Duty

The duty is on the creditors, especially when they are regularly involved in bankruptcy cases, to establish procedures that ensure compliance with the automatic stay, see In re. Price, 103 B.R. 989 (Bankr. N.D. Ill. 1989). This is a U.S. Bankruptcy Court decision from Illinois.

Collection Agencies

If either the creditor or its collection agency has knowledge of the bankruptcy case, the creditor may be held in contempt for attempts to collect, see In re. Fowler, 16 B.R. 596 (Bankr. S.D. Ohio 1981). This is a U.S. Bankruptcy Court decision from Ohio.

Bankruptcy Stay Violations

Attorney fees and costs are mandatory for willful violation of the automatic bankruptcy stay and punitive damages are also available, United States v. Ketelson, 880 F.2d 990, 993 (8th Cir. 1989). This is a U.S. Bankruptcy Court decision from the 8th Circuit.

Creditors cannot sit on their hands

Willful violation occurs when a creditor fails to act affirmatively to prevent an action prohibited by the automatic stay, see Matter of Sams, 106 B.R. 485 (Bankr. S.D. Ohio 1989). This is a U.S. Bankruptcy Court decision from Ohio.

Pre-Bankruptcy Stipulations not binding

Bankruptcy Courts are not bound by stipulations made prior to filing bankruptcy that debt will not be discharged (sometimes these stipulations are found in divorce decrees), In re Cole, 226 B.R. 647 (Bankr. 9th Cir. 1998). This is a U.S. Bankruptcy Court decision from the 9th Circuit.

Bankruptcy Law and Co-debtors

The Chapter 7 automatic bankruptcy stay does not effect actions against co-debtors, Credit Alliance Corp. v. Williams, 851 F2nd 119, (4th Cir. 1988). This is a U.S. Bankruptcy Court decision from the 9th Circuit.

Pay deductions must Stop

Acceptance of payroll deductions after filing violates the automatic stay, Matter of Hellums, 772 F2d 379 (7th Cir. 1985). This is a U.S. Bankruptcy Court decision from the 7th Circuit.

Driver’s License and Bankruptcy Protection

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). This is a U.S. Supreme Court decision.

College Transcripts once Bankruptcy Filed

Withholding of a student’s college transcript for non-payment of a debt discharged in bankruptcy is prohibited, In re Merchant, 958 F.2d 738 (6th Cir. 1992). This is a U.S. Bankruptcy Court decision from the 6th Circuit.

Bankruptcy and Social Security Benefits

Administrative recoupments of public benefits such as social security or welfare based on overpayment are not allowed once you have filed bankruptcy, Lee v. Schweiker, 739 F.2d 870, (3rd Cir. 1984). This is a U.S. Bankruptcy Court decision from the 3rd Circuit.

Bankruptcy and Criminal Cases

U.S. Bankruptcy Court rules that a criminal case can continue against the debtor despite filing bankruptcy, In re. Guntz, 202 F.3d 1074 (9th Cir. 2000). This is a U.S. Bankruptcy Court decision from the 9th Circuit.

Checks delivered pre Bankruptcy petition

The automatic stay does not prevent cashing a check delivered pre-petition, In re. Roete, 936 F.2d 963 (7th Cir. 1991). This is a U.S. Bankruptcy Court decision from the 7th Circuit.

Actions against Others

Actions pursued against others (by the debtor) are not stayed by filing bankruptcy, see In re Berry Estates, Inc. 812 F.2d 67 (2d Cir. 1987). This is a U.S. Bankruptcy Court decision from the 2nd Circuit.

IRA’s are Exempt

Individual retirement accounts are exempted from the bankruptcy estate, Rousey v. Jacoway, 544 US 320 (2005). This is a U.S. Supreme Court decision.

Compiled by Jeff Mathias, Des Moines, Iowa bankruptcy attorney, 4800 Mills Civic Parkway, Suite 205, West Des Moines, Iowa 50265. 1-800-997-1395.

Iowa Bankruptcy: Common Bankruptcy Mistakes

2007-01-03T22:48:00.000-06:00

BANKRUPTCY MISTAKES

I don't know about you, but I like to review the most common ways people get in trouble before I make a major decision myself. It is one of the best ways to avoid problems. Here are some of the common problems you should try to avoid if you are going to file personal bankruptcy under either Chapter 7 or Chapter 13.

1. Failing to list all Creditors on your Bankruptcy Petition
If you do not list a creditor, they may not be discharged. You should list all creditors, even if you have a co-debtor or intend to repay.

2. Getting a Second Mortgage Instead of Filing Bankruptcy
Many clients put off the inevitable by getting a second mortgage to pay off debt and then end up losing their home when they cannot afford the mortgage payments, or filing bankruptcy and being burdened by the second mortgage.

3. Waiting Too Long to File Bankruptcy
It is human nature to put off unpleasant events. Wage garnishment, foreclosure and repossession can all be stopped by filing your case beforehand.

4. Reaffirming Burdensome Debt after Filing Bankruptcy
Do not reaffirm (keep) loans that are unreasonable. Doing so will make it difficult or impossible for you to recover financially.

5. Having too much money in Bank Accounts
Here in Iowa you can normally have up to $1,000 in your bank account single or $2,000 joint when you file bankruptcy. If you are over these limits you may have to turn money over to the trustee. Outstanding checks are part of your balance.

6. Filing when you have a substantial Tax Refund pending
You can normally keep $1,000 single or $2,000 joint for looming tax refunds when you file bankruptcy. Sometimes it is better to wait until after you receive and spend your refunds before filing bankruptcy. Care must be taken in how the refunds are spent to avoid problems like preference payments to family that can come back and bit you in the butt later.

7. Large credit usage shortly before Filing Bankruptcy
If you have had significant cash advances, balance transfers or other large credit use within three months of filing, they should be discussed with your attorney beforehand. You should not use any credit cards once you decide to file bankruptcy or realize you cannot repay.

8. Paying large amounts to family before Filing Bankruptcy
These “preferences” can be taken back from your family member and distributed to all creditors. This is a source of great despair for my clients. If you are going to voluntarily repay family it should occur after filing bankruptcy.

9. Transferring Assets before Filing Bankruptcy
Assets transferred in anticipation of filing bankruptcy may be recovered by the estate.

10. Failing to Provide Documents
Especially under the new bankruptcy law, failure to provide required documents like your tax returns, wage statements and certificates (Credit Counseling and Financial Management) can result in dismissal of your case.

How to shoot yourself in the foot when filing Bankruptcy

The funny thing about filing bankruptcy is that if you follow the rules, it really is not too bad. When people do get in trouble, it is usually because they have tried to game the system or hide something. Ironically, if the client had just told their attorney about the issue before filing, it would normally be very manageable. But instead, they fail to disclose a lawsuit or leave valuable assets off their petition. When the trustee finds out about the deception, the case becomes a "heat seeker" and goes downhill quickly, normally resulting in loss of the undisclosed asset for the debtor.

Pre-bankruptcy planning is totally legitimate. Corporate America does it all the time. Debtors who can afford the legal fees often protect big assets that the rest of us would lose if we file bankruptcy. The point is that by simply fully disclosing all of your assets, all claims against others and so forth with your attorney, your case will normally proceed quite smoothly with preplanning. Just don't be tempted to try to hide information from your attorney or the bankruptcy trustee.

Many clients also make things worse before filing bankruptcy by taking out a second mortgage to pay off credit cards. Banks know you normally cannot discharge mortgage debt and still keep your home when you file bankruptcy. They are only too happy to help you take out more debt on your home and pay off your credit cards. That way if you file bankruptcy later you often would have to surrender your home in order to discharge the additional mortgage debt. It is far better to file bankruptcy before taking out a second mortgage. This is the best way to try and keep your home in the long run.

Using consolidation loans, balance transfers and cash advances before filing bankruptcy can also complicate your case. Bankruptcy Courts do not like debtors who "load up" on new debt before filing bankruptcy. It really is not fair to the creditors to accumulate new debt you know you cannot repay. So consult with your attorney before doing cash advances, payday loans, balance transfers or consolidation loans since those may not be dischargeable if you do.

Finally, many debtors, especially those who file pro-se, fail to properly exempt assets. An asset that is otherwise exempt can be lost if it is not properly exempted. So one mistake on exemptions can cost a lot more than your attorney fee. We attorneys have all gotten that sinking feeling in hearings before when we have seen pro-se debtors confronted by a trustee who informs them that their home or another asset will be lost because it has not been properly exempted.

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.

Iowa Bankruptcy and your Home

2007-01-03T12:33:00.000-06:00

One of he biggest concerns for my Iowa bankruptcy clients is the importance of keeping their home. The general rule in Iowa is that you can keep your home when you file bankruptcy as long as you keep making the payments. In fact, Iowa allows an unlimited exemption on your home so even if it is paid off you should be fine. So if you file bankruptcy in Iowa you will normally just keep making your house payments like nothing has happened.

Some people who file Iowa bankruptcy will surrender their home. This is an especially good idea of you owe more than your home is worth. If you surrender your home you normally have at least 30 days from the date of filing your bankruptcy to surrender. But once you do so you will no longer be responsble for the debt. So even if the bank suffers a deficiency, meaning they are unable to recover all of what they are owed you will not have to pay anything if you file your Iowa bankruptcy.

An exception to the general rule on homes in Iowa is if purchased your home after aquiring high debt and you have significant equity. For most of my clients this is not a problem because they have little or no equity if they have recently purchased. If they did have a large down payment it is usually money from the sale of a prior Iowa home which is an "exception to the exception" and is ok. In any event, if you have recently purchased your Iowa home when you are preparing to file Iowa bankruptcy be sure to let me know and we can determine if you may have a pre-aquistion debt issue. In most cases it is very manageable.

If you are keeping your home in Iowa you have an excellent opportunity to start re-building your credit as soon as you file bankruptcy. This is the time to be obsessive/complusive about making your house payments on time. Each month that you make that on-time house payment is another brick in the wall toward a good credit score.

If you are going to surrender your home it is a good idea to include your utility providers on your petition so you will not get any bills from them after filing. You may also want to call them and confirm that you will not be in the home any more and tell them who the lender is. As a rule my clients do not have trouble with utility providers, but making sure they know you are leaving does not hurt.

My clients seem to have little trouble finding a home or apartment to rent. Many landlords do not even check credit history and those that do will often accept a larger deposit if you have a lower score. Often my clients find their lives much easier when they do not have to worry about the costs of home ownership anymore. I rent a duplex myself and I spend a lot less than I did when I have owned homes in the past. It is great just calling the landlord when something needs repair.

Iowa Bankruptcy from Start to Finish on Video

2007-01-02T17:31:00.005-06:00

Iowa Bankruptcy Mistakes to Avoid

Will I lose Property?

Does my spouse have to file too?

Keeping Your Home

Can I keep my car?

Iowa bankruptcy and Tax Refunds

Alternatives to Iowa Bankruptcy

How long does Iowa Bankruptcy take?

Chapter 7 Fees & Payments

Small Business and Iowa Bankruptcy

Credit After filing Iowa Bankruptcy

Can I keep a credit card?

Office Appointment

Getting Started

Bankruptcy exceptions to Discharge

2007-01-02T16:38:00.000-06:00

When you file bankruptcy, most of the debt you need to get rid of is normally discharged; credit cards, medical bills, old foreclosure and repossession debt, judgements etc. The most common "non-dischargeables" are some back taxes, student loans and child support. Below is the Bankruptcy Code section concerning exceptions to discharge.

§ 523. Exceptions to discharge

(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—
(1) for a tax or a customs duty—
(A) of the kind and for the periods specified in section 507 (a)(2) or 507 (a)(8) of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, if required—
(i) was not filed; or
(ii) was filed after the date on which such return was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or
(C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax;
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing—
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C) for purposes of subparagraph (A) of this paragraph, consumer debts owed to a single creditor and aggregating more than $1,000 for “luxury goods or services” incurred by an individual debtor on or within 60 days before the order for relief under this title, or cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be nondischargeable; “luxury goods or services” do not include goods or services reasonably acquired for the support or maintenance of the debtor or a dependent of the debtor; an extension of consumer credit under an open end credit plan is to be defined for purposes of this subparagraph as it is defined in the Consumer Credit Protection Act;
(3) neither listed nor scheduled under section 521 (1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit—
(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request;
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement, but not to the extent that—
(A) such debt is assigned to another entity, voluntarily, by operation of law, or otherwise (other than debts assigned pursuant to section 408(a)(3) of the Social Security Act, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State); or
(B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support;
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity;
(7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty—
(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition;
(8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents;
(9) for death or personal injury caused by the debtor’s operation of a motor vehicle if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance;
(10) that was or could have been listed or scheduled by the debtor in a prior case concerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge, or was denied a discharge under section 727 (a)(2), (3), (4), (5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of such Act;
(11) provided in any final judgment, unreviewable order, or consent order or decree entered in any court of the United States or of any State, issued by a Federal depository institutions regulatory agency, or contained in any settlement agreement entered into by the debtor, arising from any act of fraud or defalcation while acting in a fiduciary capacity committed with respect to any depository institution or insured credit union;
(12) for malicious or reckless failure to fulfill any commitment by the debtor to a Federal depository institutions regulatory agency to maintain the capital of an insured depository institution, except that this paragraph shall not extend any such commitment which would otherwise be terminated due to any act of such agency;
(13) for any payment of an order of restitution issued under title 18, United States Code;
(14) incurred to pay a tax to the United States that would be nondischargeable pursuant to paragraph (1);
(15) not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit unless—
(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or
(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor;
(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor’s interest in a dwelling unit that has condominium ownership or in a share of a cooperative housing corporation, but only if such fee or assessment is payable for a period during which—
(A) the debtor physically occupied a dwelling unit in the condominium or cooperative project; or
(B) the debtor rented the dwelling unit to a tenant and received payments from the tenant for such period,
but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;
(17) for a fee imposed by a court for the filing of a case, motion, complaint, or appeal, or for other costs and expenses assessed with respect to such filing, regardless of an assertion of poverty by the debtor under section 1915 (b) or (f) of title 28, or the debtor’s status as a prisoner, as defined in section 1915 (h) of title 28;
(18) owed under State law to a State or municipality that is—
(A) in the nature of support, and
(B) enforceable under part D of title IV of the Social Security Act (42 U.S.C. 601 et seq.); or
(19) that—
(A) is for—
(i) the violation of any of the Federal securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or
(ii) common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and
(B) results from—
(i) any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding;
(ii) any settlement agreement entered into by the debtor; or
(iii) any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other payment owed by the debtor.
(b) Notwithstanding subsection (a) of this section, a debt that was excepted from discharge under subsection (a)(1), (a)(3), or (a)(8) of this section, under section 17a(1), 17a(3), or 17a(5) of the Bankruptcy Act, under section 439A [1] of the Higher Education Act of 1965, or under section 733(g) [1] of the Public Health Service Act in a prior case concerning the debtor under this title, or under the Bankruptcy Act, is dischargeable in a case under this title unless, by the terms of subsection (a) of this section, such debt is not dischargeable in the case under this title.
(c)
(1) Except as provided in subsection (a)(3)(B) of this section, the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), (6), or (15) of subsection (a) of this section, unless, on request of the creditor to whom such debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge under paragraph (2), (4), (6), or (15), as the case may be, of subsection (a) of this section.
(2) Paragraph (1) shall not apply in the case of a Federal depository institutions regulatory agency seeking, in its capacity as conservator, receiver, or liquidating agent for an insured depository institution, to recover a debt described in subsection (a)(2), (a)(4), (a)(6), or (a)(11) owed to such institution by an institution-affiliated party unless the receiver, conservator, or liquidating agent was appointed in time to reasonably comply, or for a Federal depository institutions regulatory agency acting in its corporate capacity as a successor to such receiver, conservator, or liquidating agent to reasonably comply, with subsection (a)(3)(B) as a creditor of such institution-affiliated party with respect to such debt.
(d) If a creditor requests a determination of dischargeability of a consumer debt under subsection (a)(2) of this section, and such debt is discharged, the court shall grant judgment in favor of the debtor for the costs of, and a reasonable attorney’s fee for, the proceeding if the court finds that the position of the creditor was not substantially justified, except that the court shall not award such costs and fees if special circumstances would make the award unjust.
(e) Any institution-affiliated party of a [2] insured depository institution shall be considered to be acting in a fiduciary capacity with respect to the purposes of subsection (a)(4) or (11).

Bankruptcy Code: Selected Sections

2007-01-01T23:00:00.000-06:00

TITLE 11
§ 101. Definitions

In this title—
(1) “accountant” means accountant authorized under applicable law to practice public accounting, and includes professional accounting association, corporation, or partnership, if so authorized;
(2) “affiliate” means—
(A) entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities—
(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;
(B) corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor, or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities—
(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;
(C) person whose business is operated under a lease or operating agreement by a debtor, or person substantially all of whose property is operated under an operating agreement with the debtor; or
(D) entity that operates the business or substantially all of the property of the debtor under a lease or operating agreement;
(4) [1] “attorney” means attorney, professional law association, corporation, or partnership, authorized under applicable law to practice law;
(5) “claim” means—
(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured;
(6) “commodity broker” means futures commission merchant, foreign futures commission merchant, clearing organization, leverage transaction merchant, or commodity options dealer, as defined in section 761 of this title, with respect to which there is a customer, as defined in section 761 of this title;
(7) “community claim” means claim that arose before the commencement of the case concerning the debtor for which property of the kind specified in section 541 (a)(2) of this title is liable, whether or not there is any such property at the time of the commencement of the case;
(8) “consumer debt” means debt incurred by an individual primarily for a personal, family, or household purpose;
(9) “corporation”—
(A) includes—
(i) association having a power or privilege that a private corporation, but not an individual or a partnership, possesses;
(ii) partnership association organized under a law that makes only the capital subscribed responsible for the debts of such association;
(iii) joint-stock company;
(iv) unincorporated company or association; or
(v) business trust; but
(B) does not include limited partnership;
(10) “creditor” means—
(A) entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor;
(B) entity that has a claim against the estate of a kind specified in section 348 (d), 502 (f), 502 (g), 502 (h) or 502 (i) of this title; or
(C) entity that has a community claim;
(11) “custodian” means—
(A) receiver or trustee of any of the property of the debtor, appointed in a case or proceeding not under this title;
(B) assignee under a general assignment for the benefit of the debtor’s creditors; or
(C) trustee, receiver, or agent under applicable law, or under a contract, that is appointed or authorized to take charge of property of the debtor for the purpose of enforcing a lien against such property, or for the purpose of general administration of such property for the benefit of the debtor’s creditors;
(12) “debt” means liability on a claim;
(12A) “debt for child support” means a debt of a kind specified in section 523 (a)(5) of this title for maintenance or support of a child of the debtor;
(13) “debtor” means person or municipality concerning which a case under this title has been commenced;
(14) “disinterested person” means person that—
(A) is not a creditor, an equity security holder, or an insider;
(B) is not and was not an investment banker for any outstanding security of the debtor;
(C) has not been, within three years before the date of the filing of the petition, an investment banker for a security of the debtor, or an attorney for such an investment banker in connection with the offer, sale, or issuance of a security of the debtor;
(D) is not and was not, within two years before the date of the filing of the petition, a director, officer, or employee of the debtor or of an investment banker specified in subparagraph (B) or (C) of this paragraph; and
(E) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor or an investment banker specified in subparagraph (B) or (C) of this paragraph, or for any other reason;
(15) “entity” includes person, estate, trust, governmental unit, and United States trustee;
(16) “equity security” means—
(A) share in a corporation, whether or not transferable or denominated “stock”, or similar security;
(B) interest of a limited partner in a limited partnership; or
(C) warrant or right, other than a right to convert, to purchase, sell, or subscribe to a share, security, or interest of a kind specified in subparagraph (A) or (B) of this paragraph;
(17) “equity security holder” means holder of an equity security of the debtor;
(18) “family farmer” means—
(A) individual or individual and spouse engaged in a farming operation whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse unless such debt arises out of a farming operation), on the date the case is filed, arise out of a farming operation owned or operated by such individual or such individual and spouse, and such individual or such individual and spouse receive from such farming operation more than 50 percent of such individual’s or such individual and spouse’s gross income for the taxable year preceding the taxable year in which the case concerning such individual or such individual and spouse was filed; or
(B) corporation or partnership in which more than 50 percent of the outstanding stock or equity is held by one family, or by one family and the relatives of the members of such family, and such family or such relatives conduct the farming operation, and
(i) more than 80 percent of the value of its assets consists of assets related to the farming operation;
(ii) its aggregate debts do not exceed $1,500,000 and not less than 80 percent of its aggregate noncontingent, liquidated debts (excluding a debt for one dwelling which is owned by such corporation or partnership and which a shareholder or partner maintains as a principal residence, unless such debt arises out of a farming operation), on the date the case is filed, arise out of the farming operation owned or operated by such corporation or such partnership; and
(iii) if such corporation issues stock, such stock is not publicly traded;
(19) “family farmer with regular annual income” means family farmer whose annual income is sufficiently stable and regular to enable such family farmer to make payments under a plan under chapter 12 of this title;
(20) “farmer” means (except when such term appears in the term “family farmer”) person that received more than 80 percent of such person’s gross income during the taxable year of such person immediately preceding the taxable year of such person during which the case under this title concerning such person was commenced from a farming operation owned or operated by such person;
(21) “farming operation” includes farming, tillage of the soil, dairy farming, ranching, production or raising of crops, poultry, or livestock, and production of poultry or livestock products in an unmanufactured state;
(21A) “farmout agreement” means a written agreement in which—
(A) the owner of a right to drill, produce, or operate liquid or gaseous hydrocarbons on property agrees or has agreed to transfer or assign all or a part of such right to another entity; and
(B) such other entity (either directly or through its agents or its assigns), as consideration, agrees to perform drilling, reworking, recompleting, testing, or similar or related operations, to develop or produce liquid or gaseous hydrocarbons on the property;
(21B) “Federal depository institutions regulatory agency” means—
(A) with respect to an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act) for which no conservator or receiver has been appointed, the appropriate Federal banking agency (as defined in section 3(q) of such Act);
(B) with respect to an insured credit union (including an insured credit union for which the National Credit Union Administration has been appointed conservator or liquidating agent), the National Credit Union Administration;
(C) with respect to any insured depository institution for which the Resolution Trust Corporation has been appointed conservator or receiver, the Resolution Trust Corporation; and
(D) with respect to any insured depository institution for which the Federal Deposit Insurance Corporation has been appointed conservator or receiver, the Federal Deposit Insurance Corporation;
(22) the term “financial institution”—
(A) means—
(i) a Federal reserve bank or an entity (domestic or foreign) that is a commercial or savings bank, industrial savings bank, savings and loan association, trust company, or receiver or conservator for such entity and, when any such Federal reserve bank, receiver, conservator, or entity is acting as agent or custodian for a customer in connection with a securities contract, as defined in section 741 of this title, the customer; or
(ii) in connection with a securities contract, as defined in section 741 of this title, an investment company registered under the Investment Company Act of 1940; and
(B) includes any person described in subparagraph (A) which operates, or operates as, a multilateral clearing organization pursuant to section 409 of the Federal Deposit Insurance Corporation Improvement Act of 1991;
(23) “foreign proceeding” means proceeding, whether judicial or administrative and whether or not under bankruptcy law, in a foreign country in which the debtor’s domicile, residence, principal place of business, or principal assets were located at the commencement of such proceeding, for the purpose of liquidating an estate, adjusting debts by composition, extension, or discharge, or effecting a reorganization;
(24) “foreign representative” means duly selected trustee, administrator, or other representative of an estate in a foreign proceeding;
(25) “forward contract” means a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity, as defined in section 761 (8) of this title, or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date more than two days after the date the contract is entered into, including, but not limited to, a repurchase transaction, reverse repurchase transaction, consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any combination thereof or option thereon;
(26) “forward contract merchant” means a person whose business consists in whole or in part of entering into forward contracts as or with merchants in a commodity, as defined in section 761 (8) of this title, or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade;
(27) “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government;
(28) “indenture” means mortgage, deed of trust, or indenture, under which there is outstanding a security, other than a voting-trust certificate, constituting a claim against the debtor, a claim secured by a lien on any of the debtor’s property, or an equity security of the debtor;
(29) “indenture trustee” means trustee under an indenture;
(30) “individual with regular income” means individual whose income is sufficiently stable and regular to enable such individual to make payments under a plan under chapter 13 of this title, other than a stockbroker or a commodity broker;
(31) “insider” includes—
(A) if the debtor is an individual—
(i) relative of the debtor or of a general partner of the debtor;
(ii) partnership in which the debtor is a general partner;
(iii) general partner of the debtor; or
(iv) corporation of which the debtor is a director, officer, or person in control;
(B) if the debtor is a corporation—
(i) director of the debtor;
(ii) officer of the debtor;
(iii) person in control of the debtor;
(iv) partnership in which the debtor is a general partner;
(v) general partner of the debtor; or
(vi) relative of a general partner, director, officer, or person in control of the debtor;
(C) if the debtor is a partnership—
(i) general partner in the debtor;
(ii) relative of a general partner in, general partner of, or person in control of the debtor;
(iii) partnership in which the debtor is a general partner;
(iv) general partner of the debtor; or
(v) person in control of the debtor;
(D) if the debtor is a municipality, elected official of the debtor or relative of an elected official of the debtor;
(E) affiliate, or insider of an affiliate as if such affiliate were the debtor; and
(F) managing agent of the debtor;
(32) “insolvent” means—
(A) with reference to an entity other than a partnership and a municipality, financial condition such that the sum of such entity’s debts is greater than all of such entity’s property, at a fair valuation, exclusive of—
(i) property transferred, concealed, or removed with intent to hinder, delay, or defraud such entity’s creditors; and
(ii) property that may be exempted from property of the estate under section 522 of this title;
(B) with reference to a partnership, financial condition such that the sum of such partnership’s debts is greater than the aggregate of, at a fair valuation—
(i) all of such partnership’s property, exclusive of property of the kind specified in subparagraph (A)(i) of this paragraph; and
(ii) the sum of the excess of the value of each general partner’s nonpartnership property, exclusive of property of the kind specified in subparagraph (A) of this paragraph, over such partner’s nonpartnership debts; and
(C) with reference to a municipality, financial condition such that the municipality is—
(i) generally not paying its debts as they become due unless such debts are the subject of a bona fide dispute; or
(ii) unable to pay its debts as they become due;
(33) “institution-affiliated party”—
(A) with respect to an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act), has the meaning given it in section 3(u) of the Federal Deposit Insurance Act; and
(B) with respect to an insured credit union, has the meaning given it in section 206(r) of the Federal Credit Union Act;
(34) “insured credit union” has the meaning given it in section 101(7) of the Federal Credit Union Act;
(35) “insured depository institution”—
(A) has the meaning given it in section 3(c)(2) of the Federal Deposit Insurance Act; and
(B) includes an insured credit union (except in the case of paragraphs (21B) and (33)(A) of this subsection);
(35A) “intellectual property” means—
(A) trade secret;
(B) invention, process, design, or plant protected under title 35;
(C) patent application;
(D) plant variety;
(E) work of authorship protected under title 17; or
(F) mask work protected under chapter 9 of title 17;
to the extent protected by applicable nonbankruptcy law; and
(36) “judicial lien” means lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding;
(37) “lien” means charge against or interest in property to secure payment of a debt or performance of an obligation;
(38) “margin payment” means, for purposes of the forward contract provisions of this title, payment or deposit of cash, a security or other property, that is commonly known in the forward contract trade as original margin, initial margin, maintenance margin, or variation margin, including mark-to-market payments, or variation payments; and [2]
(39) “mask work” has the meaning given it in section 901 (a)(2) of title 17.
(40) “municipality” means political subdivision or public agency or instrumentality of a State;
(41) “person” includes individual, partnership, and corporation, but does not include governmental unit, except that a governmental unit that—
(A) acquires an asset from a person—
(i) as a result of the operation of a loan guarantee agreement; or
(ii) as receiver or liquidating agent of a person;
(B) is a guarantor of a pension benefit payable by or on behalf of the debtor or an affiliate of the debtor; or
(C) is the legal or beneficial owner of an asset of—
(i) an employee pension benefit plan that is a governmental plan, as defined in section 414(d) of the Internal Revenue Code of 1986; or
(ii) an eligible deferred compensation plan, as defined in section 457(b) of the Internal Revenue Code of 1986;
shall be considered, for purposes of section 1102 of this title, to be a person with respect to such asset or such benefit;
(42) “petition” means petition filed under section 301, 302, 303, or 304 of this title, as the case may be, commencing a case under this title;
(42A) “production payment” means a term overriding royalty satisfiable in cash or in kind—
(A) contingent on the production of a liquid or gaseous hydrocarbon from particular real property; and
(B) from a specified volume, or a specified value, from the liquid or gaseous hydrocarbon produced from such property, and determined without regard to production costs;
(43) “purchaser” means transferee of a voluntary transfer, and includes immediate or mediate transferee of such a transferee;
(44) “railroad” means common carrier by railroad engaged in the transportation of individuals or property or owner of trackage facilities leased by such a common carrier;
(45) “relative” means individual related by affinity or consanguinity within the third degree as determined by the common law, or individual in a step or adoptive relationship within such third degree;
(46) “repo participant” means an entity that, on any day during the period beginning 90 days before the date of the filing of the petition, has an outstanding repurchase agreement with the debtor;
(47) “repurchase agreement” (which definition also applies to a reverse repurchase agreement) means an agreement, including related terms, which provides for the transfer of certificates of deposit, eligible bankers’ acceptances, or securities that are direct obligations of, or that are fully guaranteed as to principal and interest by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers’ acceptances, or securities with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, or securities as described above, at a date certain not later than one year after such transfers or on demand, against the transfer of funds;
(48) “securities clearing agency” means person that is registered as a clearing agency under section 17A of the Securities Exchange Act of 1934 or whose business is confined to the performance of functions of a clearing agency with respect to exempted securities, as defined in section 3(a)(12) of such Act for the purposes of such section 17A;
(49) “security”—
(A) includes—
(i) note;
(ii) stock;
(iii) treasury stock;
(iv) bond;
(v) debenture;
(vi) collateral trust certificate;
(vii) pre-organization certificate or subscription;
(viii) transferable share;
(ix) voting-trust certificate;
(x) certificate of deposit;
(xi) certificate of deposit for security;
(xii) investment contract or certificate of interest or participation in a profit-sharing agreement or in an oil, gas, or mineral royalty or lease, if such contract or interest is required to be the subject of a registration statement filed with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, or is exempt under section 3(b) of such Act from the requirement to file such a statement;
(xiii) interest of a limited partner in a limited partnership;
(xiv) other claim or interest commonly known as “security”; and
(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase or sell, a security; but
(B) does not include—
(i) currency, check, draft, bill of exchange, or bank letter of credit;
(ii) leverage transaction, as defined in section 761 of this title;
(iii) commodity futures contract or forward contract;
(iv) option, warrant, or right to subscribe to or purchase or sell a commodity futures contract;
(v) option to purchase or sell a commodity;
(vi) contract or certificate of a kind specified in subparagraph (A)(xii) of this paragraph that is not required to be the subject of a registration statement filed with the Securities and Exchange Commission and is not exempt under section 3(b) of the Securities Act of 1933 from the requirement to file such a statement; or
(vii) debt or evidence of indebtedness for goods sold and delivered or services rendered;
(50) “security agreement” means agreement that creates or provides for a security interest;
(51) “security interest” means lien created by an agreement;
(51A) “settlement payment” means, for purposes of the forward contract provisions of this title, a preliminary settlement payment, a partial settlement payment, an interim settlement payment, a settlement payment on account, a final settlement payment, a net settlement payment, or any other similar payment commonly used in the forward contract trade;
(51B) “single asset real estate” means real property constituting a single property or project, other than residential real property with fewer than 4 residential units, which generates substantially all of the gross income of a debtor and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental thereto having aggregate noncontingent, liquidated secured debts in an amount no more than $4,000,000;
(51C) “small business” means a person engaged in commercial or business activities (but does not include a person whose primary activity is the business of owning or operating real property and activities incidental thereto) whose aggregate noncontingent liquidated secured and unsecured debts as of the date of the petition do not exceed $2,000,000;
(52) “State” includes the District of Columbia and Puerto Rico, except for the purpose of defining who may be a debtor under chapter 9 of this title;
(53) “statutory lien” means lien arising solely by force of a statute on specified circumstances or conditions, or lien of distress for rent, whether or not statutory, but does not include security interest or judicial lien, whether or not such interest or lien is provided by or is dependent on a statute and whether or not such interest or lien is made fully effective by statute;
(53A) “stockbroker” means person—
(A) with respect to which there is a customer, as defined in section 741 of this title; and
(B) that is engaged in the business of effecting transactions in securities—
(i) for the account of others; or
(ii) with members of the general public, from or for such person’s own account;
(53B) “swap agreement” means—
(A) an agreement (including terms and conditions incorporated by reference therein) which is a rate swap agreement, basis swap, forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement, rate floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option, any other similar agreement (including any option to enter into any of the foregoing);
(B) any combination of the foregoing; or
(C) a master agreement for any of the foregoing together with all supplements;
(53C) “swap participant” means an entity that, at any time before the filing of the petition, has an outstanding swap agreement with the debtor;
(56A) [3] “term overriding royalty” means an interest in liquid or gaseous hydrocarbons in place or to be produced from particular real property that entitles the owner thereof to a share of production, or the value thereof, for a term limited by time, quantity, or value realized;
(53D) “timeshare plan” means and shall include that interest purchased in any arrangement, plan, scheme, or similar device, but not including exchange programs, whether by membership, agreement, tenancy in common, sale, lease, deed, rental agreement, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives a right to use accommodations, facilities, or recreational sites, whether improved or unimproved, for a specific period of time less than a full year during any given year, but not necessarily for consecutive years, and which extends for a period of more than three years. A “timeshare interest” is that interest purchased in a timeshare plan which grants the purchaser the right to use and occupy accommodations, facilities, or recreational sites, whether improved or unimproved, pursuant to a timeshare plan;
(54) “transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the debtor’s equity of redemption;
(54A) the term “uninsured State member bank” means a State member bank (as defined in section 3 of the Federal Deposit Insurance Act) the deposits of which are not insured by the Federal Deposit Insurance Corporation; and
(55) “United States”, when used in a geographical sense, includes all locations where the judicial jurisdiction of the United States extends, including territories and possessions of the United States;

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§ 341. Meetings of creditors and equity security holders

(a) Within a reasonable time after the order for relief in a case under this title, the United States trustee shall convene and preside at a meeting of creditors.
(b) The United States trustee may convene a meeting of any equity security holders.
(c) The court may not preside at, and may not attend, any meeting under this section including any final meeting of creditors.
(d) Prior to the conclusion of the meeting of creditors or equity security holders, the trustee shall orally examine the debtor to ensure that the debtor in a case under chapter 7 of this title is aware of—
(1) the potential consequences of seeking a discharge in bankruptcy, including the effects on credit history;
(2) the debtor’s ability to file a petition under a different chapter of this title;
(3) the effect of receiving a discharge of debts under this title; and
(4) the effect of reaffirming a debt, including the debtor’s knowledge of the provisions of section 524 (d) of this title.

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§ 521. Debtor’s duties

The debtor shall—
(1) file a list of creditors, and unless the court orders otherwise, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs;
(2) if an individual debtor’s schedule of assets and liabilities includes consumer debts which are secured by property of the estate—
(A) within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, the debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property;
(B) within forty-five days after the filing of a notice of intent under this section, or within such additional time as the court, for cause, within such forty-five day period fixes, the debtor shall perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor’s or the trustee’s rights with regard to such property under this title;
(3) if a trustee is serving in the case, cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title;
(4) if a trustee is serving in the case, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, whether or not immunity is granted under section 344 of this title, and
(5) appear at the hearing required under section 524 (d) of this title.

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§ 522. Exemptions

(a) In this section—
(1) “dependent” includes spouse, whether or not actually dependent; and
(2) “value” means fair market value as of the date of the filing of the petition or, with respect to property that becomes property of the estate after such date, as of the date such property becomes property of the estate.
(b) Notwithstanding section 541 of this title, an individual debtor may exempt from property of the estate the property listed in either paragraph (1) or, in the alternative, paragraph (2) of this subsection. In joint cases filed under section 302 of this title and individual cases filed under section 301 or 303 of this title by or against debtors who are husband and wife, and whose estates are ordered to be jointly administered under Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, one debtor may not elect to exempt property listed in paragraph (1) and the other debtor elect to exempt property listed in paragraph (2) of this subsection. If the parties cannot agree on the alternative to be elected, they shall be deemed to elect paragraph (1), where such election is permitted under the law of the jurisdiction where the case is filed. Such property is—
(1) property that is specified under subsection (d) of this section, unless the State law that is applicable to the debtor under paragraph (2)(A) of this subsection specifically does not so authorize; or, in the alternative,
(2)
(A) any property that is exempt under Federal law, other than subsection (d) of this section, or State or local law that is applicable on the date of the filing of the petition at the place in which the debtor’s domicile has been located for the 180 days immediately preceding the date of the filing of the petition, or for a longer portion of such 180-day period than in any other place; and
(B) any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety or joint tenant to the extent that such interest as a tenant by the entirety or joint tenant is exempt from process under applicable nonbankruptcy law.
(c) Unless the case is dismissed, property exempted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such debt had arisen, before the commencement of the case, except—
(1) a debt of a kind specified in section 523 (a)(1) or 523 (a)(5) of this title;
(2) a debt secured by a lien that is—
(A)
(i) not avoided under subsection (f) or (g) of this section or under section 544, 545, 547, 548, 549, or 724 (a) of this title; and
(ii) not void under section 506 (d) of this title; or
(B) a tax lien, notice of which is properly filed;
(3) a debt of a kind specified in section 523 (a)(4) or 523 (a)(6) of this title owed by an institution-affiliated party of an insured depository institution to a Federal depository institutions regulatory agency acting in its capacity as conservator, receiver, or liquidating agent for such institution; or
(4) a debt in connection with fraud in the obtaining or providing of any scholarship, grant, loan, tuition, discount, award, or other financial assistance for purposes of financing an education at an institution of higher education (as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)).
(d) The following property may be exempted under subsection (b)(1) of this section:
(1) The debtor’s aggregate interest, not to exceed $15,000 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
(2) The debtor’s interest, not to exceed $2,400 in value, in one motor vehicle.
(3) The debtor’s interest, not to exceed $400 in value in any particular item or $8,000 in aggregate value, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(4) The debtor’s aggregate interest, not to exceed $1,000 in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(5) The debtor’s aggregate interest in any property, not to exceed in value $800 plus up to $7,500 of any unused amount of the exemption provided under paragraph (1) of this subsection.
(6) The debtor’s aggregate interest, not to exceed $1,500 in value, in any implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor.
(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.
(8) The debtor’s aggregate interest, not to exceed in value $8,000 less any amount of property of the estate transferred in the manner specified in section 542 (d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.
(9) Professionally prescribed health aids for the debtor or a dependent of the debtor.
(10) The debtor’s right to receive—
(A) a social security benefit, unemployment compensation, or a local public assistance benefit;
(B) a veterans’ benefit;
(C) a disability, illness, or unemployment benefit;
(D) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
(E) a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless—
(i) such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under such plan or contract arose;
(ii) such payment is on account of age or length of service; and
(iii) such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.
(11) The debtor’s right to receive, or property that is traceable to—
(A) an award under a crime victim’s reparation law;
(B) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
(C) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of such individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
(D) a payment, not to exceed $15,000, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or
(E) a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(e) A waiver of an exemption executed in favor of a creditor that holds an unsecured claim against the debtor is unenforceable in a case under this title with respect to such claim against property that the debtor may exempt under subsection (b) of this section. A waiver by the debtor of a power under subsection (f) or (h) of this section to avoid a transfer, under subsection (g) or (i) of this section to exempt property, or under subsection (i) of this section to recover property or to preserve a transfer, is unenforceable in a case under this title.
(f)
(1) Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is—
(A) a judicial lien, other than a judicial lien that secures a debt—
(i) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement; and
(ii) to the extent that such debt—
(I) is not assigned to another entity, voluntarily, by operation of law, or otherwise; and
(II) includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance or support.; [1] or
(B) a nonpossessory, nonpurchase-money security interest in any—
(i) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor;
(ii) implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor; or
(iii) professionally prescribed health aids for the debtor or a dependent of the debtor.
(2)
(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of—
(i) the lien;
(ii) all other liens on the property; and
(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;
exceeds the value that the debtor’s interest in the property would have in the absence of any liens.
(B) In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens.
(C) This paragraph shall not apply with respect to a judgment arising out of a mortgage foreclosure.
(3) In a case in which State law that is applicable to the debtor—
(A) permits a person to voluntarily waive a right to claim exemptions under subsection (d) or prohibits a debtor from claiming exemptions under subsection (d); and
(B) either permits the debtor to claim exemptions under State law without limitation in amount, except to the extent that the debtor has permitted the fixing of a consensual lien on any property or prohibits avoidance of a consensual lien on property otherwise eligible to be claimed as exempt property;
the debtor may not avoid the fixing of a lien on an interest of the debtor or a dependent of the debtor in property if the lien is a nonpossessory, nonpurchase-money security interest in implements, professional books, or tools of the trade of the debtor or a dependent of the debtor or farm animals or crops of the debtor or a dependent of the debtor to the extent the value of such implements, professional books, tools of the trade, animals, and crops exceeds $5,000.
(g) Notwithstanding sections 550 and 551 of this title, the debtor may exempt under subsection (b) of this section property that the trustee recovers under section 510 (c)(2), 542, 543, 550, 551, or 553 of this title, to the extent that the debtor could have exempted such property under subsection (b) of this section if such property had not been transferred, if—
(1)
(A) such transfer was not a voluntary transfer of such property by the debtor; and
(B) the debtor did not conceal such property; or
(2) the debtor could have avoided such transfer under subsection (f)(2) of this section.
(h) The debtor may avoid a transfer of property of the debtor or recover a setoff to the extent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer, if—
(1) such transfer is avoidable by the trustee under section 544, 545, 547, 548, 549, or 724 (a) of this title or recoverable by the trustee under section 553 of this title; and
(2) the trustee does not attempt to avoid such transfer.
(i)
(1) If the debtor avoids a transfer or recovers a setoff under subsection (f) or (h) of this section, the debtor may recover in the manner prescribed by, and subject to the limitations of, section 550 of this title, the same as if the trustee had avoided such transfer, and may exempt any property so recovered under subsection (b) of this section.
(2) Notwithstanding section 551 of this title, a transfer avoided under section 544, 545, 547, 548, 549, or 724 (a) of this title, under subsection (f) or (h) of this section, or property recovered under section 553 of this title, may be preserved for the benefit of the debtor to the extent that the debtor may exempt such property under subsection (g) of this section or paragraph (1) of this subsection.
(j) Notwithstanding subsections (g) and (i) of this section, the debtor may exempt a particular kind of property under subsections (g) and (i) of this section only to the extent that the debtor has exempted less property in value of such kind than that to which the debtor is entitled under subsection (b) of this section.
(k) Property that the debtor exempts under this section is not liable for payment of any administrative expense except—
(1) the aliquot share of the costs and expenses of avoiding a transfer of property that the debtor exempts under subsection (g) of this section, or of recovery of such property, that is attributable to the value of the portion of such property exempted in relation to the value of the property recovered; and
(2) any costs and expenses of avoiding a transfer under subsection (f) or (h) of this section, or of recovery of property under subsection (i)(1) of this section, that the debtor has not paid.
(l) The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section. If the debtor does not file such a list, a dependent of the debtor may file such a list, or may claim property as exempt from property of the estate on behalf of the debtor. Unless a party in interest objects, the property claimed as exempt on such list is exempt.
(m) Subject to the limitation in subsection (b), this section shall apply separately with respect to each debtor in a joint case.

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§ 524. Effect of discharge

(a) A discharge in a case under this title—
(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and
(3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, property of the debtor of the kind specified in section 541 (a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from discharge under section 523, 1228 (a)(1), or 1328 (a)(1) [1] of this title, or that would be so excepted, determined in accordance with the provisions of sections 523 (c) and 523 (d) of this title, in a case concerning the debtor’s spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.
(b) Subsection (a)(3) of this section does not apply if—
(1)
(A) the debtor’s spouse is a debtor in a case under this title, or a bankrupt or a debtor in a case under the Bankruptcy Act, commenced within six years of the date of the filing of the petition in the case concerning the debtor; and
(B) the court does not grant the debtor’s spouse a discharge in such case concerning the debtor’s spouse; or
(2)
(A) the court would not grant the debtor’s spouse a discharge in a case under chapter 7 of this title concerning such spouse commenced on the date of the filing of the petition in the case concerning the debtor; and
(B) a determination that the court would not so grant such discharge is made by the bankruptcy court within the time and in the manner provided for a determination under section 727 of this title of whether a debtor is granted a discharge.
(c) An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to any extent enforceable under applicable nonbankruptcy law, whether or not discharge of such debt is waived, only if—
(1) such agreement was made before the granting of the discharge under section 727, 1141, 1228, or 1328 of this title;
(2)
(A) such agreement contains a clear and conspicuous statement which advises the debtor that the agreement may be rescinded at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim; and
(B) such agreement contains a clear and conspicuous statement which advises the debtor that such agreement is not required under this title, under nonbankruptcy law, or under any agreement not in accordance with the provisions of this subsection;
(3) such agreement has been filed with the court and, if applicable, accompanied by a declaration or an affidavit of the attorney that represented the debtor during the course of negotiating an agreement under this subsection, which states that—
(A) such agreement represents a fully informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of the legal effect and consequences of—
(i) an agreement of the kind specified in this subsection; and
(ii) any default under such an agreement;
(4) the debtor has not rescinded such agreement at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim;
(5) the provisions of subsection (d) of this section have been complied with; and
(6)
(A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as—
(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and
(ii) in the best interest of the debtor.
(B) Subparagraph (A) shall not apply to the extent that such debt is a consumer debt secured by real property.
(d) In a case concerning an individual, when the court has determined whether to grant or not to grant a discharge under section 727, 1141, 1228, or 1328 of this title, the court may hold a hearing at which the debtor shall appear in person. At any such hearing, the court shall inform the debtor that a discharge has been granted or the reason why a discharge has not been granted. If a discharge has been granted and if the debtor desires to make an agreement of the kind specified in subsection (c) of this section and was not represented by an attorney during the course of negotiating such agreement, then the court shall hold a hearing at which the debtor shall appear in person and at such hearing the court shall—
(1) inform the debtor—
(A) that such an agreement is not required under this title, under nonbankruptcy law, or under any agreement not made in accordance with the provisions of subsection (c) of this section; and
(B) of the legal effect and consequences of—
(i) an agreement of the kind specified in subsection (c) of this section; and
(ii) a default under such an agreement; and
(2) determine whether the agreement that the debtor desires to make complies with the requirements of subsection (c)(6) of this section, if the consideration for such agreement is based in whole or in part on a consumer debt that is not secured by real property of the debtor.
(e) Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.
(f) Nothing contained in subsection (c) or (d) of this section prevents a debtor from voluntarily repaying any debt.
(g)
(1)
(A) After notice and hearing, a court that enters an order confirming a plan of reorganization under chapter 11 may issue, in connection with such order, an injunction in accordance with this subsection to supplement the injunctive effect of a discharge under this section.
(B) An injunction may be issued under subparagraph (A) to enjoin entities from taking legal action for the purpose of directly or indirectly collecting, recovering, or receiving payment or recovery with respect to any claim or demand that, under a plan of reorganization, is to be paid in whole or in part by a trust described in paragraph (2)(B)(i), except such legal actions as are expressly allowed by the injunction, the confirmation order, or the plan of reorganization.
(2)
(A) Subject to subsection (h), if the requirements of subparagraph (B) are met at the time an injunction described in paragraph (1) is entered, then after entry of such injunction, any proceeding that involves the validity, application, construction, or modification of such injunction, or of this subsection with respect to such injunction, may be commenced only in the district court in which such injunction was entered, and such court shall have exclusive jurisdiction over any such proceeding without regard to the amount in controversy.
(B) The requirements of this subparagraph are that—
(i) the injunction is to be implemented in connection with a trust that, pursuant to the plan of reorganization—
(I) is to assume the liabilities of a debtor which at the time of entry of the order for relief has been named as a defendant in personal injury, wrongful death, or property-damage actions seeking recovery for damages allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products;
(II) is to be funded in whole or in part by the securities of 1 or more debtors involved in such plan and by the obligation of such debtor or debtors to make future payments, including dividends;
(III) is to own, or by the exercise of rights granted under such plan would be entitled to own if specified contingencies occur, a majority of the voting shares of—
(aa) each such debtor;
(bb) the parent corporation of each such debtor; or
(cc) a subsidiary of each such debtor that is also a debtor; and
(IV) is to use its assets or income to pay claims and demands; and
(ii) subject to subsection (h), the court determines that—
(I) the debtor is likely to be subject to substantial future demands for payment arising out of the same or similar conduct or events that gave rise to the claims that are addressed by the injunction;
(II) the actual amounts, numbers, and timing of such future demands cannot be determined;
(III) pursuit of such demands outside the procedures prescribed by such plan is likely to threaten the plan’s purpose to deal equitably with claims and future demands;
(IV) as part of the process of seeking confirmation of such plan—
(aa) the terms of the injunction proposed to be issued under paragraph (1)(A), including any provisions barring actions against third parties pursuant to paragraph (4)(A), are set out in such plan and in any disclosure statement supporting the plan; and
(bb) a separate class or classes of the claimants whose claims are to be addressed by a trust described in clause (i) is established and votes, by at least 75 percent of those voting, in favor of the plan; and
(V) subject to subsection (h), pursuant to court orders or otherwise, the trust will operate through mechanisms such as structured, periodic, or supplemental payments, pro rata distributions, matrices, or periodic review of estimates of the numbers and values of present claims and future demands, or other comparable mechanisms, that provide reasonable assurance that the trust will value, and be in a financial position to pay, present claims and future demands that involve similar claims in substantially the same manner.
(3)
(A) If the requirements of paragraph (2)(B) are met and the order confirming the plan of reorganization was issued or affirmed by the district court that has jurisdiction over the reorganization case, then after the time for appeal of the order that issues or affirms the plan—
(i) the injunction shall be valid and enforceable and may not be revoked or modified by any court except through appeal in accordance with paragraph (6);
(ii) no entity that pursuant to such plan or thereafter becomes a direct or indirect transferee of, or successor to any assets of, a debtor or trust that is the subject of the injunction shall be liable with respect to any claim or demand made against such entity by reason of its becoming such a transferee or successor; and
(iii) no entity that pursuant to such plan or thereafter makes a loan to such a debtor or trust or to such a successor or transferee shall, by reason of making the loan, be liable with respect to any claim or demand made against such entity, nor shall any pledge of assets made in connection with such a loan be upset or impaired for that reason;
(B) Subparagraph (A) shall not be construed to—
(i) imply that an entity described in subparagraph (A)(ii) or (iii) would, if this paragraph were not applicable, necessarily be liable to any entity by reason of any of the acts described in subparagraph (A);
(ii) relieve any such entity of the duty to comply with, or of liability under, any Federal or State law regarding the making of a fraudulent conveyance in a transaction described in subparagraph (A)(ii) or (iii); or
(iii) relieve a debtor of the debtor’s obligation to comply with the terms of the plan of reorganization, or affect the power of the court to exercise its authority under sections 1141 and 1142 to compel the debtor to do so.
(4)
(A)
(i) Subject to subparagraph (B), an injunction described in paragraph (1) shall be valid and enforceable against all entities that it addresses.
(ii) Notwithstanding the provisions of section 524 (e), such an injunction may bar any action directed against a third party who is identifiable from the terms of such injunction (by name or as part of an identifiable group) and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands on the debtor to the extent such alleged liability of such third party arises by reason of—
(I) the third party’s ownership of a financial interest in the debtor, a past or present affiliate of the debtor, or a predecessor in interest of the debtor;
(II) the third party’s involvement in the management of the debtor or a predecessor in interest of the debtor, or service as an officer, director or employee of the debtor or a related party;
(III) the third party’s provision of insurance to the debtor or a related party; or
(IV) the third party’s involvement in a transaction changing the corporate structure, or in a loan or other financial transaction affecting the financial condition, of the debtor or a related party, including but not limited to—
(aa) involvement in providing financing (debt or equity), or advice to an entity involved in such a transaction; or
(bb) acquiring or selling a financial interest in an entity as part of such a transaction.
(iii) As used in this subparagraph, the term “related party” means—
(I) a past or present affiliate of the debtor;
(II) a predecessor in interest of the debtor; or
(III) any entity that owned a financial interest in—
(aa) the debtor;
(bb) a past or present affiliate of the debtor; or
(cc) a predecessor in interest of the debtor.
(B) Subject to subsection (h), if, under a plan of reorganization, a kind of demand described in such plan is to be paid in whole or in part by a trust described in paragraph (2)(B)(i) in connection with which an injunction described in paragraph (1) is to be implemented, then such injunction shall be valid and enforceable with respect to a demand of such kind made, after such plan is confirmed, against the debtor or debtors involved, or against a third party described in subparagraph (A)(ii), if—
(i) as part of the proceedings leading to issuance of such injunction, the court appoints a legal representative for the purpose of protecting the rights of persons that might subsequently assert demands of such kind, and
(ii) the court determines, before entering the order confirming such plan, that identifying such debtor or debtors, or such third party (by name or as part of an identifiable group), in such injunction with respect to such demands for purposes of this subparagraph is fair and equitable with respect to the persons that might subsequently assert such demands, in light of the benefits provided, or to be provided, to such trust on behalf of such debtor or debtors or such third party.
(5) In this subsection, the term “demand” means a demand for payment, present or future, that—
(A) was not a claim during the proceedings leading to the confirmation of a plan of reorganization;
(B) arises out of the same or similar conduct or events that gave rise to the claims addressed by the injunction issued under paragraph (1); and
(C) pursuant to the plan, is to be paid by a trust described in paragraph (2)(B)(i).
(6) Paragraph (3)(A)(i) does not bar an action taken by or at the direction of an appellate court on appeal of an injunction issued under paragraph (1) or of the order of confirmation that relates to the injunction.
(7) This subsection does not affect the operation of section 1144 or the power of the district court to refer a proceeding under section 157 of title 28 or any reference of a proceeding made prior to the date of the enactment of this subsection.
(h) Application to Existing Injunctions.— For purposes of subsection (g)—
(1) subject to paragraph (2), if an injunction of the kind described in subsection (g)(1)(B) was issued before the date of the enactment of this Act, as part of a plan of reorganization confirmed by an order entered before such date, then the injunction shall be considered to meet the requirements of subsection (g)(2)(B) for purposes of subsection (g)(2)(A), and to satisfy subsection (g)(4)(A)(ii), if—
(A) the court determined at the time the plan was confirmed that the plan was fair and equitable in accordance with the requirements of section 1129 (b);
(B) as part of the proceedings leading to issuance of such injunction and confirmation of such plan, the court had appointed a legal representative for the purpose of protecting the rights of persons that might subsequently assert demands described in subsection (g)(4)(B) with respect to such plan; and
(C) such legal representative did not object to confirmation of such plan or issuance of such injunction; and
(2) for purposes of paragraph (1), if a trust described in subsection (g)(2)(B)(i) is subject to a court order on the date of the enactment of this Act staying such trust from settling or paying further claims—
(A) the requirements of subsection (g)(2)(B)(ii)(V) shall not apply with respect to such trust until such stay is lifted or dissolved; and
(B) if such trust meets such requirements on the date such stay is lifted or dissolved, such trust shall be considered to have met such requirements continuously from the date of the enactment of this Act.

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§ 525. Protection against discriminatory treatment

(a) Except as provided in the Perishable Agricultural Commodities Act, 1930, the Packers and Stockyards Act, 1921, and section 1 of the Act entitled “An Act making appropriations for the Department of Agriculture for the fiscal year ending June 30, 1944, and for other purposes,” approved July 12, 1943, a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.
(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
(c)
(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.
(2) In this section, “student loan program” means the program operated under part B, D, or E of title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.

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§ 727. Discharge

(a) The court shall grant the debtor a discharge, unless—
(1) the debtor is not an individual;
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed—
(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition;
(3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or in connection with the case—
(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs;
(5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities;
(6) the debtor has refused, in the case—
(A) to obey any lawful order of the court, other than an order to respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify;
(7) the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider;
(8) the debtor has been granted a discharge under this section, under section 1141 of this title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case commenced within six years before the date of the filing of the petition;
(9) the debtor has been granted a discharge under section 1228 or 1328 of this title, or under section 660 or 661 of the Bankruptcy Act, in a case commenced within six years before the date of the filing of the petition, unless payments under the plan in such case totaled at least—
(A) 100 percent of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of such claims; and
(ii) the plan was proposed by the debtor in good faith, and was the debtor’s best effort; or
(10) the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter.
(b) Except as provided in section 523 of this title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined under section 502 of this title as if such claim had arisen before the commencement of the case, whether or not a proof of claim based on any such debt or liability is filed under section 501 of this title, and whether or not a claim based on any such debt or liability is allowed under section 502 of this title.
(c)
(1) The trustee, a creditor, or the United States trustee may object to the granting of a discharge under subsection (a) of this section.
(2) On request of a party in interest, the court may order the trustee to examine the acts and conduct of the debtor to determine whether a ground exists for denial of discharge.
(d) On request of the trustee, a creditor, or the United States trustee, and after notice and a hearing, the court shall revoke a discharge granted under subsection (a) of this section if—
(1) such discharge was obtained through the fraud of the debtor, and the requesting party did not know of such fraud until after the granting of such discharge;
(2) the debtor acquired property that is property of the estate, or became entitled to acquire property that would be property of the estate, and knowingly and fraudulently failed to report the acquisition of or entitlement to such property, or to deliver or surrender such property to the trustee; or
(3) the debtor committed an act specified in subsection (a)(6) of this section.
(e) The trustee, a creditor, or the United States trustee may request a revocation of a discharge—
(1) under subsection (d)(1) of this section within one year after such discharge is granted; or
(2) under subsection (d)(2) or (d)(3) of this section before the later of—
(A) one year after the granting of such discharge; and
(B) the date the case is closed.

Iowa Bankruptcy Court, Southern District of Iowa

2006-12-01T10:32:00.000-06:00

Here in Iowa we have two bankruptcy courts, the Northern District and the Southern District. The Southern District web site is a treasure trove of information about filing bankruptcy in Iowa. Court News appears on the index page so you can barely miss the latest changes in bankruptcy law. Comprehensive bankruptcy information on Chapter 7, Chapter 11, Chapter 12, Chapter 13, Bankruptcy Discharge, bankruptcy basics and bankruptcy terminology. Frequently asked Iowa Bankruptcy questions
address basic bankruptcy issues as well.

Bankruptcy Court Information: Northern District of Iowa

2006-11-01T21:02:00.000-06:00

In Iowa we have two bankruptcy court districts, the Northern District Bankruptcy Court and the Southern District Bankruptcy Court. Each serves the entire state meaning you can file your Iowa Bankruptcy in either district because they both have broad power to hear cases. Among the resources from the United States Bankruptcy Court for the Northern District of Iowa are bankruptcy fees, approved credit counseling, federal bankruptcy court links which includes district and appellate courts and PACER, the bankruptcy reform act (new bankruptcy law) which took effect in October 2005 and encourages people with higher incomes to file a Chapter 13 instead of a Chapter 7 bankruptcy.

The Northern District Court also provides information on handling tax debt in bankruptcy, although as a general rule, tax that are less than three years old or for which tax returns were filed late are not discharged, financial management class information and means test information, which concerns when debtors can file a Chapter 7 and when they can file a Chapter 13.

Bankruptcy Court decisions for the Northern District are searchable for decisions from the Northern District. If you are curious about the number of people filing Iowa bankruptcy you can check out the clerk's bankruptcy statistics page. The Northern District bankruptcy court also has a bankruptcy news page.

We are a debt relief agency. We help people file for relief under the Bankruptcy Code

Iowa Bankruptcy Definitions

2006-06-09T17:02:00.000-06:00

Abandonment – Technically when you file bankruptcy, all your property goes into the bankruptcy “estate”. Then you exempt most or all of it. If you have non-exempt assets, the bankruptcy estate may abandon them back to you because of low value. When clients receive abandonment’s, they tend to worry that they are going to lose property. On the contrary, abandonment normally means that you get to keep the property. Most debtors who file bankruptcy do not lose property.

Adversary Proceeding – A lawsuit within the bankruptcy, most often based on a creditors claim of non-dischargeablity, for example by “loading up” (see below) on charge cards. If you have had recent large credit card use when you file bankruptcy, you should discuss that with your attorney. See Bankruptcy Mistakes for some of the common problems that can lead to an adversary proceeding like loading up on debt just before filing bankruptcy.

Automatic Stay – Takes effect as soon as you file your bankruptcy and prevents wage garnishment and collection of most debt. Our bankruptcy law makes the automatic stay self enforcing so no order from the Judge is required after you file bankruptcy.

Bankruptcy- A legal process that allows you to get a fresh financial start by discharging debt you cannot pay. In some cases, you may need to pay back portions or all of your debt in a Chapter 13 Bankruptcy. Your attorney can tell you if you are likely to succeed in a full discharge (Chapter 7 Bankruptcy) or may need to consider a repayment (Chapter 13 Bankruptcy).
Bankruptcy Appellate Panel (BAP) - A panel of bankruptcy law Judges who hear bankruptcy law cases on appeal.

Bankruptcy Law Cases- The Judge made law that guides bankruptcy professionals and your case. For example, a recent United States Supreme Court ruling confirmed that Individual Retirement Accounts (IRA’s) are normally exempt when you file bankruptcy.

Bankruptcy Code- The statutory law (drafted by legislative bodies) that guides bankruptcy professionals and you. Most bankruptcy statutes are found in the United States Code although each state has statutory bankruptcy law as well.

Bankruptcy Court- A Court that specifically handles bankruptcy law. Unlike most areas of law, we have our own Judges and Clerks of Bankruptcy Court. Bankruptcy law is so specialized and it is more practical to have Judges who can focus on bankruptcy law matters, although Bankruptcy Judges can hear other matters too.

Bankruptcy Estate – When you file bankruptcy under Chapter 7, in theory your property goes into an “estate” to be liquidated (sold). However, because most debtors’ property is exempt from the estate, usually no property is liquidated. If you think you have any property that may be at risk in filing bankruptcy, or if you have property that is very important to you, you should discuss those items with your bankruptcy attorney before you file bankruptcy.

Bankruptcy Law Judge – The Federal Judge who is appointed specifically to hear and rule on bankruptcy cases. Bankruptcy Judges are bankruptcy law specialists.

Chapter 7 Bankruptcy Law – Often called “liquidation”, however, your attorney can normally tell you before you file bankruptcy if any of your property is non-exempt. If all of your property is exempt, your case should result in a “no asset” report. This means there are no assets to be distributed and you keep everything. Most bankruptcy cases are “no asset”. With Chapter 7 Bankruptcy you do not have a repayment.

Chapter 11 Bankruptcy Law – A bankruptcy law allowing for reorganization, normally involving corporations or partnerships, but rarely used for individuals (and expensive when it is). Few consumers file bankruptcy under Chapter 11, although for some high profile debtors a Chapter 11 can make sense, usually because they have lots of assets.

Chapter 12 Bankruptcy Law – Family Farm Bankruptcy law Chapter. Some states provide sufficient exemptions for farmers to file bankruptcy under Chapter 7. Even if your state allows you to file bankruptcy under Chapter 7, your attorney may suggest that you consider Chapter 12 bankruptcy or Chapter 13 bankruptcy as well.

Chapter 13 Bankruptcy Law- Involves repayment of at least part of the debt owed, over either 3 or 5 years. Debtors with high income may be required to file bankruptcy under Chapter 13. Other debtors may choose a Chapter 13 bankruptcy in order to try and save their home, get better treatment on back taxes or for other reasons. If you fail in Chapter 13 bankruptcy (normally due to inability to keep up with the payments) you may be able to convert to Chapter 7 bankruptcy.

Confirmation – Approval of a Chapter 13 bankruptcy plan.
Conversion - Occurs when a case cannot continue as a Chapter 7 bankruptcy and must be moved into a Chapter 13 bankruptcy repayment. Cases can also convert from Chapter 13 to Chapter 7, most often due to an inability to make the Chapter 13 plan (monthly) payments.

Creditor - Any bank, credit union or other party to whom a debtor owes money when they go bankrupt. You must schedule (list) all your creditors on your bankruptcy petition, even if you intend to repay them. If you file bankruptcy and leave creditors off, in some cases the debt will not be discharged.

Creditor Meeting - The hearing you attend after you file bankruptcy, also referred to as the 341 Examination. Your attorney will be there with you to make sure your rights are protected.

Debtor - One who is in debt to another (this is you in the bankruptcy context).

Discharge - You will receive a Bankruptcy Discharge in the mail, normally a few months after your hearing and around three months after you file bankruptcy. It refers to credit card, medical and other debt that you will never have to pay due to your bankruptcy discharge.

Dischargeable Debt – Debt which you can get rid of when you file bankruptcy; credit cards, medical, misc. debt. Student loans and child support are the two major exceptions to discharge after you file bankruptcy. Back taxes get more complicated, some are discharged after you file bankruptcy, others are not.

Dismissal- If you fail to do something important after you file bankruptcy like provide documents required by the Court, your case can be dismissed. In this case you would be back in the same position as when you started and your creditors could resume collection efforts.

Equity - How much value you have in an asset. For example, if your home would sell for $100,000, and you owe $90,000 then you have $10,000 in equity. If your car would sell for $5,000 and you owe $8,000, you do not have any equity. Owing more than the value of the asset, is often referred to as being “upside down.” Equity matters when you file bankruptcy since the amount you can exempt may be limited by your state or federal law.

Exempt - Refers to assets you get to keep when you file bankruptcy. As a practical matter, most people keep all their assets when they file bankruptcy given a reasonable amount of legal pre-bankruptcy planning. If you do have non-exempt assets, your attorney can tell you before you file bankruptcy how to handle that. The exemptions you can choose from depend on your state bankruptcy law.

Foreclosure – When you file bankruptcy and are not keeping your home, this is the legal process lenders must go through to recover your home so it can be sold. If you are surrendering your home when you file bankruptcy the bank will probably foreclose after you file bankruptcy, but you will normally discharge the debt from the home so you will owe nothing.

Fresh Start – Your ability to discharge debt you cannot afford to pay through bankruptcy allowing you to start anew. The United States Constitution protects your right to start fresh through bankruptcy. Without the ability to get a fresh start with bankruptcy, people could lose their homes, lose their jobs and end up on welfare. The public good is served by allowing people to start anew, get back on their feet, pay taxes and support themself and their families.

Joint Bankruptcy Petition – A bankruptcy filed by husband and wife. Under our bankruptcy law, spouses can normally file bankruptcy jointly or solo.

Loading Up – Large recent use of credit cards before you file bankruptcy, includes cash advances and balance transfers. If you load up before you file bankruptcy you may need to repay part or all of the recent usage. The bankruptcy law disfavors debtors who charge up their credit cards right before they file bankruptcy.

Means Test- For those who file bankruptcy and are earning over the state median income, the means test applies IRS collection guidelines to your income and then generally requires that debtors who file bankruptcy and can pay at least $100/month toward past due debt file bankruptcy under Chapter 13 (repayment) instead of Chapter 7 (full discharge). The means test is part of the 2005 revisions to the bankruptcy law.

No Asset - Refers to a bankruptcy case in which the debtor (you) will not lose any assets to the bankruptcy estate. Most people who file bankruptcy end up with a no asset case. You should receive a No Asset Report in the mail before discharge.

Objection to Exemptions – If you file bankruptcy and the trustee or another party believes you did not properly exempt an asset, they can file and objection. Your attorney would normally handle this if it happens. The bankruptcy law limits the instances in which the trustee can object to your exemptions when you file bankruptcy.

Petition - The document that is prepared and filed with the Bankruptcy Court to start your case. It includes listings of all your assets, debts, income etc. Under our bankruptcy law, if you file bankruptcy with a defective petition, your case may be dismissed.

Plan – Applies to those who file bankruptcy under Chapter 13. The plan is a detailed description of how a Chapter 13 bankruptcy case will proceed. Your attorney will prepare this from information you provide before you file bankruptcy.

Preference Payment - Large payments made to family members within one year of filing bankruptcy. Under the bankruptcy law, reference payments can be recovered by the estate and distributed to all creditors. You should consult with your attorney before making preference payments. Large payments made to non-family members can be recovered by the trustee if made within 90 days of filing bankruptcy, so you should consult with your attorney if you have recently made such a payment. Normally, home, car and other payments to secured creditors are fine. The bankruptcy law discourages debtors from giving money to family to avoid giving it to creditors when you file bankruptcy.

Pre-petition Bankruptcy Planning – The legal efforts permitted by our bankruptcy law to manage protection of your assets when you file bankruptcy. Your bankruptcy attorney will tell you what bankruptcy planning is permissible under our bankruptcy law before you file bankruptcy.

Proof of Claim – A creditors written statement describing why they believe you owe them money when you file bankruptcy. The bankruptcy law allows for creditors to each get their share of any funds that are available when you file bankruptcy. Most of this occurs with Chapter 13 bankruptcy.

Reaffirmation – After you file bankruptcy, if you have debt you are keeping (such as home/car), some creditors may request that you sign a document agreeing to abide by the terms of your original contract. Your attorney can advise you whether you should sign a reaffirmation in any given case.

Redemption - If you owe more than your car is worth the bankruptcy code allows you to get a new loan, pay off the old loan at fair market value and save money on your car. These loans are available to people in bankruptcy from www.722redemption.com via US Bank.

Repossession – The bankruptcy law process creditors must go through to gain title to vehicles or other property surrendered when you file bankruptcy. Most people who file bankruptcy continue making payments and do not have any repossessions. Bankruptcy law recognizes that you need to be able to get to work, so most debtors get to keep their car when they file bankruptcy.

Secured Loan - Home, car and similar loans where the creditor can foreclose or repossess if you do not pay. Hence, when you file bankruptcy you can normally either keep your home or car and continue payments, or surrender and discharge all of that debt, even if they sell the property short. Our bankruptcy law normally allows people who file bankruptcy to stay in their homes if they wish.

Substantial Abuse – Bankruptcy law changes in 2005 limit who is eligible for a full discharge under Chapter 7. Substantial abuse concerns debtors who have too much income (given their expenses) to qualify for a Chapter 7 bankruptcy discharge. If your income seems to be too high for a successful Chapter 7 discharge, your attorney will normally tell you up front so you can consider other options including filing a chapter 13 bankruptcy.

Surrender - Giving a home, car or other secured property back to the creditor after you file bankruptcy instead of reaffirming. If you surrender during a bankruptcy the bankruptcy law normally allows you to discharge all the debt to the creditor.

Trustee – In most district, once you file bankruptcy the "panel trustee" is appointed by the Bankruptcy Court to represent creditors and examine you at your creditor meeting concerning availability of assets to the estate and accuracy of your petition. In most districts there is also a United States Trustee and Assistant United States Trustee who work with the panel trustees. The Bankruptcy law provides for trustee’s in most areas because our bankruptcy court Judges are too busy to oversee every person when they file bankruptcy.

Bankruptcy Law Terms Confusion
Bankruptcy clients sometimes use the word "dismissal" when they mean "discharge". There is a big difference. If a bankruptcy case is dismissed, it means you did not get a successful discharge of debt. If a bankruptcy case is discharged it means you did get rid of your credit card, medical and other dischargeable debt. So don't make the mistake of telling a creditor that your bankruptcy was dismissed; they may think they can start collecting again.

The "bankruptcy estate" confuses people. When you file bankruptcy, your property becomes part of the "bankruptcy estate". Then you get to exempt certain property from the estate and keep it. In theory the remainder of your property is sold to pay creditors. But because bankrupt people do not have very much valuable property, and what they do have tends to be within legal bankruptcy exemptions, few cases actually result in liquidation of any of your property. Part of your bankruptcy attorneys job is to review what property you have before you file bankruptcy and help you make sure you keep as much as possible if not all your property.

A fair number of clients confuse Chapter 7 with Chapter 13.
Chapter 7 is the full discharge and Chapter 13 is the repayment.

Equity seems to be a source of great wonderment for some people. Unfortunately, banks try to obscure equity by talking about affordable monthly payments and failing to mention the total purchase price. Too many people fall for that and have no idea they owe a lot more than their car or other asset is worth. Understanding how much equity you have in an asset is key to deciding if you want to keep it when you file bankruptcy.

Current Market Value - Amount Owed = Equity
Some bankrupt people think it is strange that banks still foreclose even though they are filing bankruptcy. However, the bank cannot regain possession of the home without foreclosure. They still have to comply with state law in order to re-sell the house.

Iowa Bankruptcy - Exemptions

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IOWA BANKRUPTCY EXEMPTIONS

Iowa Bankruptcy Exemptions
The term "Iowa bankruptcy exemptions" refers to assets that you get to keep when you file bankruptcy. As a practical matter, most people keep all their assets when they file bankruptcy given a reasonable amount of legal bankruptcy planning.
Homestead (however if you have recently purchased your home and have significant equity you should discuss this with your attorney before filing bankruptcy)
Up to $7,000 in equity in each of one car per filing debtor (2 cars for married couples filing together) Note: Due to large loan balances or low value, extra cars are usually not a problem.
Clothing
Wedding & Engagement Rings
Musical Instruments
Shotgun and Rifle or Musket
Household Furnishings
Life Insurance
Health Equipment
Employer Sponsored Retirement Accounts (401k, IPERS etc., includes IRA rollovers from employer sponsored retirement.)
First $1,000 of tax return (usually only applied late in the calendar year) per person plus an amount equal to any Earned Income Tax Credit
Business equipment up to $10,000 (in equity)
$1,000 in cash per person
Rental deposits
Note: Some of these items have limited exemptions amounts, but they are rarely reached, so most clients keep all of this property. If you have particularly valuable property, it should be discussed with your attorney before filing bankruptcy.
Common Non-Exempt Assets

Note: As with any other asset, if you have little or no equity in an item below due to a loan on the item, you can normally keep it anyway, since the trustee would have to pay off the loan if he wanted to take it from you. If you own any of these items you should discuss it with your attorney prior to filing bankruptcy to find out what options you have.
Boats, Motors, Trailers
Campers
Expensive Collections. Caution: Most clients vastly over-value collections. Be sure to make a sober evaluation of how much cash you could get for collections. It is often much less than you would think. The trustee is not interested in most collections.
Very large tax refunds
Pending lawsuits against others (except workers compensation which is normally exempt)

Mathias Law Offices provides assistance with: Iowa bankruptcy, bankruptcy Iowa, Iowa bankruptcy lawyer, bankruptcy in Iowa, Iowa bankruptcy attorney, bankruptcy lawyer Iowa, Iowa bankruptcy filing, bankruptcy attorney Iowa, bankruptcy lawyer in Iowa, bankruptcy attorney in Iowa, bankruptcy attorney Des Moines IA, bankruptcy attorney des moines Iowa, chapter 7 bankruptcy in Iowa, chapter 13 bankruptcy in Iowa, personal bankruptcy in Iowa, tax attorney Iowa, filing bankruptcy in Iowa, file bankruptcy in Iowa, tax lawyer in Des Moines Iowa, des moines Iowa bankruptcy lawyer, tax attorney Iowa, attorney bankruptcy des moines Iowa, des moines Iowa attorney bankruptcy.

Iowa Bankrupty Attorney Jeff Mathias

2006-01-01T09:46:00.000-06:00

4800 Mills Civic Parkway, Suite 205,
West Des Moines, Iowa 50265
Tel. 515-261-7526
Toll Free: 1-800-997-1395
Email Jeff Mathias

Also see Jeff's Iowa Bankruptcy Law and Iowa Chapter 7 Bankruptcy guide and Iowa foreclosure law information.

Copyright 2007, All rights reserved, Jeff Mathias Law Office.

Iowa Chapter 7 Article

2005-01-04T10:45:00.000-06:00

From the Clerk of Bankruptcy Court for the Southern District of Iowa.

Chapter 7 - Liquidation Under the Bankruptcy Code

Public Information Series of the Bankruptcy Judges Division
Administrative Office of the United States Courts
October 17, 2005

While the information presented herein is accurate as of the date of publication, it should not be cited or relied upon as legal authority. This information should not be used as a substitute for reference to the United States Bankruptcy Code (title 11, United States Code) and the Federal Rules of Bankruptcy Procedure, both of which may be reviewed at local law libraries, or to local rules of practice adopted by each bankruptcy court. Finally, this fact sheet should not substitute for the advice of competent legal counsel.

Alternatives to Chapter 7
Background
Chapter 7 Eligibility
How Chapter 7 Works
Role of the Case Trustee The Chapter 7 Discharge

Chapter 7 of the United States Bankruptcy Code is the Bankruptcy Code's "liquidation" chapter. Lawyers sometimes refer to it as a "straight bankruptcy." It is used primarily by individuals who wish to free themselves of debt simply and inexpensively, but may also be used by businesses that wish to liquidate and terminate their business.

Alternatives to Chapter 7

Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.

In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to "catch up" past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707(b).

If the debtor's "current monthly income" is more than the state median, the Bankruptcy Code requires application of a "means test" to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor's aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $10,000, or (ii) 25% of the debtor's nonpriority unsecured debt, as long as that amount is at least $6,000. The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor's consent) or will be dismissed. 11 U.S.C. § 707(b)(1).

Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.

Background

A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.

Chapter 7 Eligibility

To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor's debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.

How Chapter 7 Works

A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.

As of October 17, 2005, the courts must charge a $220 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court's permission, however, individual debtors may pay in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006. For cause shown, the court may extend the time of any installment, provided that the last installment is paid not later than 180 days after filing the petition. Id. The debtor may also pay the $39 administrative fee and the $15 trustee surcharge in installments. If a joint petition is filed, only one filing fee, one administrative fee, and one trustee surcharge are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 707(a).

If the debtor's income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f).

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:

* A list of all creditors including addresses, and the amount and nature of their claims;
* The source, amount, and frequency of the debtor's income;
* A list of all of the debtor's property; and
* A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

Among the schedules that an individual debtor will file is a schedule of "exempt" property. The Bankruptcy Code allows an individual debtor to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor's home state. 11 U.S.C. § 522(b). Many states have taken advantage of a provision in the Bankruptcy Code that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives.

Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 20 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).

It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The Bankruptcy Code requires the trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the meeting of creditors. 11 U.S.C. § 341(c).

In order to accord the debtor complete relief, the Bankruptcy Code allows the debtor to convert a chapter 7 case to case under chapter 11, 12 or 13 as long as the debtor is eligible to be a debtor under the new chapter. However, a condition of the debtor's voluntary conversion is that the case has not previously been converted to chapter 7 from another chapter. 11 U.S.C. § 706(a). Thus, the debtor will not be permitted to convert the case repeatedly from one chapter to another.
Role of the Case Trustee

When a chapter 7 petition is filed, the U.S. trustee (or the bankruptcy court in Alabama and North Carolina) appoints an impartial case trustee to administer the case and liquidate the debtor's nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor's assets are exempt or subject to valid liens, the trustee will normally file a "no asset" report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an "asset" case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502(b)(9). In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor's property should consult an attorney for advice.

Commencement of a bankruptcy case creates an "estate." The estate technically becomes the temporary legal owner of all the debtor's property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate.

The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors. The trustee accomplishes this by selling the debtor's property if it is free and clear of liens (as long as the property is not exempt) or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee's "avoiding powers." The trustee's avoiding powers include the power to: set aside preferential transfers made to creditors within 90 days before the petition; undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition; and pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. 11 U.S.C. § 721.

Section 726 of the Bankruptcy Code governs the distribution of the property of the estate. Under § 726, there are six classes of claims; and each class must be paid in full before the next lower class is paid anything. The debtor is only paid if all other classes of claims have been paid in full. Accordingly, the debtor is not particularly interested in the trustee's disposition of the estate assets, except with respect to the payment of those debts which for some reason are not dischargeable in the bankruptcy case. The individual debtor's primary concerns in a chapter 7 case are to retain exempt property and to receive a discharge that covers as many debts as possible.
The Chapter 7 Discharge

A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, though, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004(c).

The grounds for denying an individual debtor a discharge in a chapter 7 case are narrow and are construed against the moving party. Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records; failed to explain satisfactorily any loss of assets; committed a bankruptcy crime such as perjury; failed to obey a lawful order of the bankruptcy court; fraudulently transferred, concealed, or destroyed property that would have become property of the estate; or failed to complete an approved instructional course concerning financial management. 11 U.S.C. § 727; Fed. R. Bankr. P. 4005.

Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property (such as an automobile), he or she may decide to "reaffirm" the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt.

If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court. 11 U.S.C. § 524(c). The Bankruptcy Code requires that reaffirmation agreements contain an extensive set of disclosures described in 11 U.S.C. § 524(k). Among other things, the disclosures must advise the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor's personal liability for that debt will not be discharged in the bankruptcy. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.

If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must certify in writing that he or she advised the debtor of the legal effect and consequences of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor's dependants. 11 U.S.C. § 524(k). The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement.11 U.S.C. § 524(d) and (m). The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists. 11 U.S.C. § 524(f).

An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt. But not all of an individual's debts are discharged in chapter 7. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor's operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.11 U.S.C. § 523(a). The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 7 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. § 523(c); Fed. R. Bankr. P. 4007(c).

The court may revoke a chapter 7 discharge on the request of the trustee, a creditor, or the U.S. trustee if the discharge was obtained through fraud by the debtor, if the debtor acquired property that is property of the estate and knowingly and fraudulently failed to report the acquisition of such property or to surrender the property to the trustee, or if the debtor (without a satisfactory explanation) makes a material misstatement or fails to provide documents or other information in connection with an audit of the debtor's case. 11 U.S.C. § 727(d).

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