Bankruptcy

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Our dedicated team of caring professionals would like the opportunity to discuss your personal financial situation in confidence in order to help you achieve a fresh start.

Some people feel embarrassed to ask for help with aggressive creditors or to consider bankruptcy to alleviate the stress of debt. Quite to the contrary, as an Iowa attorney offering bankruptcy services, I feel that federal and state laws are in place to help people get out of debt, to achieve a new beginning for themselves and their families.

While bankruptcy may not be an appropriate relief for every situation, we might point out that many famous individuals have filed bankruptcy and gone on to have very productive careers, for example, President Abraham Lincoln and billionaire Donald Trump.

What You Need to Know about Bankruptcy

What is Bankruptcy?

One of the main purposes of Bankruptcy Law is to give a person or business who is hopelessly burdened with debt a fresh start by discharging or eliminating their debts. This office provides services for consumer and commercial bankruptcy: Chapter 7 and Chapter 13.

Back taxes, student loans and child support are the most common non-dischargeable debts. All bankruptcy cases are filed in Federal Courts. Our two Iowa Federal Courts (Northern District of Iowa and Southern District of Iowa), combined, have jurisdiction over the entire state.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a liquidation proceeding. That means that the debtor turns over all non-exempt property to a bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts, usually within four months. In the vast majority of cases, the debtor has no assets that are not exempt and therefore loses no property, so Chapter 7 gives that person a relatively quick "fresh start." Your home, cars, furniture, appliances, employer sponsored retirement plans and many other household items are normally exempt from the "bankruptcy estate" therefore most clients do not lose any property. In order to qualify for Chapter 7, debtors must demonstrate that their income is below the median income for a household of the same size in their state.

Chapter 13 Bankruptcy

Chapter 13 is also known as reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also the only option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses, with some amount left over to pay off their debts.

Credit Counseling Services and Requirements

Due to a change in the law that took place October 17, 2005, debtors are now required to obtain credit counseling before filing either Chapter 7 or Chapter 13. This 2-part counseling course, which covers budgeting and debt management must be completed with an agency approved by the United States Trustee's office. Counseling is a relatively simple and painless process which is designed to help you on your path to financial freedom.

The purpose of this counseling is to help you determine whether filing bankruptcy is your best option, or whether an informal repayment plan would get you back on your economic feet. Counseling is required even if it's clear that a repayment plan isn't feasible or you are facing debts that you find unfair and don't want to pay. You are required only to participate, not to adopt any repayment plan the agency proposes. However, if the agency does create a repayment plan, you will have to submit it to the court, along with the required certificate showing that you completed the credit counseling course, before you can file for bankruptcy.

Once your bankruptcy case is filed, you must complete the second counseling session, this time to learn personal financial management. (You must complete this second part of the counseling within 45 days after your Meeting of Creditors, or your case will be dismissed.)

Credit counseling can be arranged for you at David E. Sykes' Law Offices, or over the telephone.

We're here to make filing bankruptcy as smooth as possible for you. You can help us do this by providing us with all the necessary information as quickly as possible.

This is what we'll need from you for credit counseling

Drafting the Petition

The Petition is the document that will be provided to the court that will list all of your assets, debts, income and other information the Court may consider in granting a discharge of your debt. We will use the information you provide to us through the packet you prepare, other requested documentation, and conversations with you to draft this petition.

Meeting of Creditors

This meeting is also called a "341 Meeting." It takes place approximately 30 days after the petition is filed with the Bankruptcy Court. You will receive notice of the meeting by mail.

The Meeting of Creditors is required by the Bankruptcy Code, and provides your creditors an opportunity to ask you questions about your assets, though it is rare that creditors ever attend this hearing in the typical Chapter 7 Bankruptcy. The trustee will ask you questions intended to verify the contents of your petition. An attorney will attend your hearing and ensure that you are treated fairly.

What to bring to the Meeting of Creditors

Post Meeting of Creditors Issues

It can vary, but the trustee may request documents from you such as tax returns, bank statements or pay stubs. If so, you need to be sure to promptly and fully cooperate with these requests since your case could be dismissed for a simple failure to comply even though the documents would have no negative impact on your case if provided. After the hearing your attorney will help you resolve any outstanding issues that could affect your ability to discharge your debts.

Post Discharge

Discharge normally occurs about eight weeks after the meeting of creditors. Your discharge can be revoked if you do not provide requested documents or cooperate in some other way, but as a practical matter most cases are over when the discharge is issued. You should save a copy of your discharge since you may occasionally need to provide a copy to a creditor in the future, if for example, they mistakenly sell your discharged account to a collection agency.

Once discharged, your case will normally remain on your credit report for approximately 10 years. However, many people are offered credit right away and many purchase homes within two years of filing. The most important thing is to have stable employment and income, and to save a reasonable down payment.

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