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Bankruptcy Cannot Always be Avoided Says Iowa Bankruptcy Lawyer

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Last year was really rough for people declaring bankruptcy. Over 1.5 million Americans filed and started over afresh.

“I get asked this question quite a lot when people come to me for a consultation: ‘Can I avoid bankruptcy?’ Overall, that is a tough question to answer, as there are many variables that affect whether or not to file, such as the economy, what your financial practices are like and what your present circumstances are,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

Typically, whether or not a person does file bankruptcy is a matter of personal choice and personal circumstances. While some elect to keep on struggling to pay their debts, others realize that they will not get on top of things without filing. “When to toss in the towel is a very personal decision, one that a lawyer cannot make for you. However, they can certainly assist you in choosing a right route to follow for your particular situation,” Ahrenholz said.

The obvious place to start when considering bankruptcy is to find out what the legal definition of bankruptcy means. “It means when your present income, plus cash reserves, cannot pay all the living expenses, pay interest on loans and/or reduce the principal on the loans for five years, you’re legally bankrupt. Why five years? That’s the max number of years a bankruptcy court lets you work your way out of bankruptcy protection,” Ahrenholz said.

“But, back to the question about avoiding bankruptcy. To do that, you would need skill, some luck and a lot of planning. There are times when all three things come together to make it all happen, and there are times when only one of the triumvirate is present. Timing also plays a large part in whether or not you need to declare bankruptcy,” Ahrenholz said.

These days there are a number of common reasons why people file for bankruptcy protection. They may include being unemployed, bad business decisions, bad advice or timing, a lousy economy, health issues and failure to pay bills on time. These things happen to anyone and most often, they happen through no fault of their own. Most Americans do not have the financial reserves to survive being laid off and having a medical issue at the same time. In fact, most are lucky to have some money to put food on the table.

“While planning to avoid bankruptcy is an admirable goal, even if you do have a higher education and skills that are in demand; that does not necessarily guarantee landing a job. It does not shield anyone from health issues either. You could have the best education in the world but not be able to find work,” Ahrenholz said.

The bottom line is that people cannot always avoid bankruptcy and when the need arises, make sure to make the first phone call to a qualified Iowa bankruptcy lawyer for expert assistance dealing with the complexities of handling all the financial issues.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

Posted on Sunday, April 17th, 2011 and filed under Bankruptcy | Comments Off on Bankruptcy Cannot Always be Avoided Says Iowa Bankruptcy Lawyer .
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Do Not Feel Guilty If You Have No Choice But To File For Bankruptcy

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Guilt tends to dog the footsteps of many people who file bankruptcy, but should it? If there is no other option, something has to be done.

In today’s fast paced and debt filled world, people in over their heads financially often have an enormous personal struggle with the thought of filing bankruptcy. They feel a deep-seated twinge of guilt for failing to manage their financial affairs. But really, should they feel guilty when there is no other option open to them? It’s a tough question and a tough position to be in.

The drowning debtor with guilt is between a rock and a hard place, because in their minds, if they declare bankruptcy, they are deadbeats. They do not want to pack it in and admit defeat and have to face the stigma of having gone bankrupt; a status that will haunt them for many years. So they struggle to keep their heads above water and fail; miserably. And yet, they still want to pay what they owe.

Unfortunately, when things get that bad, there are not many other options open. If their debts are eating them alive every month, it is time to do something; to salvage what is left of their financial stability, without the guilt if possible. This is really a difficult financial decision and has nothing to do with morals.

Sadly, many people feel that if they max out their retirement account to pay off credit cards or bail out their home, that they have the world by the tail. It does not work that way. Retirement funds are protected from creditors and if you spend the whole enchilada, you have nothing for retirement. The true reality of using your retirement funding for credit card payments or trying to save your house, is that for every approximately $10,000 you bleed out of your account, you may well lose close to $100,000 in future income.

If you find yourself on the uncertain road heading towards possibly filing for bankruptcy, do not access your retirement funding without first talking to a qualified and skilled Iowa bankruptcy lawyer. They will tell you right away what your legal rights are and what is protected. You need to make informed decisions about your debt load, not ones that have the potential to completely ruin you financially, putting your retirement in serious jeopardy.

If you happen to have more than one creditor, and many people do, do not dash for cash to pay off just that one creditor, because if you do, what are you going to do with the other creditors? If you have some money to spread about, then spread it amongst all the creditors; don’t pay just one off or the rest may hound you into bankruptcy.

In the final analysis, declaring bankruptcy is difficult and it should never be done without talking to a seasoned Iowa bankruptcy lawyer first. There are many things that will help a financially strapped debtor deal with their situation. If you do not ask the questions, you are left with no options and a lot of mental pain and anguish. If you ask the questions, your lawyer will be able to provide you with clear and concise answers to help you choose what will suit you the best.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

Posted on Sunday, April 10th, 2011 and filed under News and Press | Comments Off on Do Not Feel Guilty If You Have No Choice But To File For Bankruptcy .
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Consumer Friendly Automatic Stay For Bankruptcy Petitioners Stop Collections Activity

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If collectors are hounding you and you will be declaring bankruptcy, the automatic stay will stop the harassment.

Those facing bankruptcy have many concerns about the recent changes to the U.S. bankruptcy laws. They feel they are way too friendly for creditors, leaving debtors facing a struggle to handle their unmanageable debts. However, there are provisions to protect debtors and one of those is the automatic stay, found in section 362(a) of the Bankruptcy Code (Code).

This particular section, paraphrased, says that if you file for bankruptcy, the petition automatically halts any collection action by creditors. In laymen’s terms, the stay or stop is similar to an automatic court order that instructs the debt collector to halt all collection activities against the petitioner. As a further point of interest, the auto stay also halts many civil lawsuits against the filer.

The code includes an automatic halt of any collection proceedings, simply because it is assumed that once the petition is filed, the debtor is immediately entitled to Code protections. If you have filed a Chapter 7 bankruptcy, the stay also keeps as much property as possible within the estate to be disposed of later to pay creditors.

If collections agents are still contacting you after you have filed your bankruptcy petition, they may be found to be in contempt of court. The courts will not hesitate to halt any collection efforts and impose penalties and fines. A collector who continues to chase a debtor after a petition is filed may also be ordered by the courts to pay the debtor’s lawyer’s fees relating to collections attempts.

There are also provisions under the newer code to level punitive damages against a collection agent that acts in contravention of a stay. Of course, there are exceptions to this rule of thumb and to find out what those are you would need to speak to a knowledgeable Iowa bankruptcy lawyer.

What does the auto stay do for a bankruptcy petitioner? Among other things, it means the collector must stop any informal collections attempts. They must also cease with any pending lawsuits, stop any efforts to collect on final judgments against a debtor and cease attempts to get a secured interest in a debtor’s property.

You may also be interested to know that once you file for bankruptcy, the code halts any and all attempts to repossess or foreclose on your house. This is applicable whether or not you choose to file a Chapter 13, Chapter 7 bankruptcy or indeed, any other chapter you choose to file bankruptcy under. This is something you should talk to your Iowa bankruptcy lawyer about.

Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.

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