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Debt May be Added After Bankruptcy is Filed Indicates Iowa Bankruptcy Lawyer

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When a debtor files for personal bankruptcy, it only addresses pre-bankruptcy debts. Some types of post-petition filing debt may be added later.

There are two routes to declare personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is a liquidation plan that sells your assets to pay creditors and Chapter 13 is a re-payment plan, with money paid to the trustee on a biweekly basis. Those funds are then paid to creditors. Chapter 7 and Chapter 13 cover all debts prior to filing. However, only some types of debt may be filed later.

If you have hired a bankruptcy lawyer, which is something you should seriously consider, they will discuss what debts are and are not covered. Unsecured debts must be included. An unsecured debt is not backed up by collateral. An example would be medical or credit card bills.

On the other hand, a secured debt would be a mortgage on a property, and it will be paid by a bankruptcy plan, but the debt itself is not discharged when the bankruptcy process is concluded. The debtor must continue to pay on the mortgage even after other debts have been discharged.

Even though a debtor may be in bankruptcy proceedings, they may find it necessary to take on more debt or apply for additional loans. This may be done, but it requires permission from the court. An Iowa bankruptcy lawyer will file a motion to incur debt and send it to the trustee. The trustee then makes a recommendation to the court. The debtor needs to wait for permission to incur more debt and would be in trouble if they proceeded without the required permission.

In any instance where a debtor, already in bankruptcy, needs to incur more debt, they must consult with their Iowa bankruptcy lawyer. This is an issue that cannot move forward without the courts affirming that it is clear to move ahead. When discussing the bankruptcy process with an attorney, it is vital that all the debts, both pre and post bankruptcy petition debts, are thoroughly reviewed. You need to make an informed decision, in conjunction with your lawyer, about how to proceed and what incurring extra debt means after filing.

Posted on Wednesday, July 10th, 2013 and filed under Bankruptcy, News and Press | Comments Off on Debt May be Added After Bankruptcy is Filed Indicates Iowa Bankruptcy Lawyer .
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When the Debt Load is Too Much, Bankruptcy Protection May Be the Best Answer

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It’s always good to pay your debts, if you can keep up with them. But if your debt is simply overwhelming, it may be time to file for bankruptcy.

These days the main trigger for someone filing for bankruptcy is that they have lost their job. There are other reasons which may lead to bankruptcy, such as health issues, divorce, death, poor business decisions, a bad economy, foreclosure and following bad advice. No matter what the reasons are that lead someone to file, the process for bankruptcy remains much the same for everyone. The differences lie in the circumstances that caused them to file, what Chapter they choose to file under or which one they are qualified to file under.

The common definition of being legally bankrupt is when an individual’s pay check does not cover all of their living expenses, allow them to pay interest on loans, or pay down the principal on loans while working to pay them off in a five-year period. Five years happens to be the maximum time limit a U.S. bankruptcy court allows a person work their way out of bankruptcy protection.

While many people report that they feel declaring bankruptcy is embarrassing and will wreck their credit rating, there are a number of beneficial advantages for a debtor who chooses to take this route. They will get an “automatic stay,” which instantly stops all foreclosures, repossessions, evictions, attachments, garnishments, some types of lawsuits and utility shut-offs.

Filing may save the family home and allow you to reschedule your secured debts. Filing may also extend protection for co-debtors. While many people don’t realize this, you may also keep non-exempt property, consolidate all loans into one plan, extend some obligations (such as student loans or tax bills) and that all or part of your loans may be completely forgiven.

There are exceptions to every rule and no two bankruptcies follow the same path. This is why it is best to consult with a qualified Iowa bankruptcy lawyer about which Chapter to file under and to make sure all relevant papers are filed on time, as required. Each set of circumstances is different for every debtor, and it is those circumstances, income, or lack thereof, that will determine whether Chapter 7 would work or Chapter 13.

Seeking bankruptcy protection is a complex and complicated process, best left in the skilled hands of an Iowa bankruptcy lawyer. They know how to expedite the process where possible, can explain what all the forms mean, ensure things are filed on time and according to court requirements, and can offer advice on the various options open to you.

Posted on Tuesday, June 11th, 2013 and filed under Bankruptcy, News and Press | Comments Off on When the Debt Load is Too Much, Bankruptcy Protection May Be the Best Answer .
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What Debts Are Not Discharged By Filing Bankruptcy?

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There are a number of debts that cannot be discharged when you file for bankruptcy. These debts need to be discussed with an Iowa bankruptcy lawyer.

While filing bankruptcy under Chapter 7 will give you a fresh start on your financial life, there are some debts that you cannot discharge. Some of those non-dischargeable debts include, but may not be limited to:

  • Alimony
  • Taxes owed the IRS
  • Liens
  • Student loans
  • Back child support
  • Car loans (unless you surrender the car to the creditor)
  • Mortgages (unless you surrender the home to the creditor)
  • Fines/penalties owing to government agencies
  • Debts incurred as a result of larceny or embezzlement
  • Debts not reported in the bankruptcy filing
  • Recent purchases of non-essential items
  • Debts owed for luxury goods/services charged within 90 days of seeking bankruptcy protection

If you have chosen to file a Chapter 7 bankruptcy, you may not be allowed to keep all your assets. However, most of the exemptions allowed under federal and state law happen to be large enough to cover most of your standard items of personal property. If the value of an item of personal property in question, such as a car, is higher than the allowed state exemption, then you (the debtor) may need to sell it or “buy it back from the bankruptcy estate/trustee” in order to pay down your debt. These are things that need to be discussed with an Iowa bankruptcy lawyer.

Property taxes may not be discharged by bankruptcy. However, there are some federal taxes that may be, provided they meet certain specific conditions. For example: federal income tax may be discharged provided that the return was due to be filed more than three (3) years prior to your bankruptcy, and provided that you filed the return more than two (2) years prior to the bankruptcy, and provided that the tax was assessed at least 240 days prior to the bankruptcy, and provided that you did not avoid paying your taxes or file a fraudulent return. This is a complex area, and to completely understand it, it is best to consult with an Iowa bankruptcy lawyer.

It should also be noted that if you have any debts or fines owing that accrued because of illegal behavior, you will still be responsible for them when you declare bankruptcy. For example, if you were charged with driving under the influence, if you have a collection of traffic tickets or have court ordered restitution to pay etc.

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 Thursday, May 9th, 2013 and filed under Bankruptcy | Comments Off on What Debts Are Not Discharged By Filing Bankruptcy? .
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The IRS is a Creditor Like Any Other Business Owed Money

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The Internal Revenue Service (IRS) may seize a tax refund at any time. Sometimes this is done in error.

Filing bankruptcy does not stop the IRS from collecting tax refunds before the process is started. What many people do not realize is that if the bankruptcy trustee is the one behind the seizure of a tax refund, the refund will not be forthcoming. It will be used to pay creditors. On the other hand, if the bankruptcy trustee did not seize the tax refund, the seizure can be corrected.

When it comes to bankruptcy, the courts view the IRS as a creditor, just like any other bank, credit institution, or company that is owed money. If the IRS moves to seize someone’s tax refund, they must advise the individual of their actions, and include the reason for doing so. For example, if the reason is to pay back taxes written off in bankruptcy, contact your lawyer, the bankruptcy trustee and the IRS promptly. You will need to provide proof your bankruptcy has been discharged to correct this error and get your tax refund back.

Why call the trustee? They have a great deal of latitude to file motions to seize funds and redirect the money to pay creditors. Letting the trustee know the IRS seized a tax refund may trigger the legal process to have that money returned. Provided the trustee is able to demonstrate the IRS acted illegally to seize the refund in the first place, the motion should result in the money being returned.

There are instances in which you may owe more in taxes than you expected. If you file bankruptcy, the IRS might audit your previous tax returns, to see if you made any extra cash. They could then seize the refund to pay for the extra owing they found in your records. This extra money is usually not written off in bankruptcy, as you did not know the debt existed. Despite the fact this kind of gold mining in a debtor’s past tax records is unsettling and seems underhanded, it is legal.

In both Chapter 7 and Chapter 13 bankruptcy proceedings, bankruptcy trustees may file motions to seize tax refunds to pay creditors and back taxes owed the IRS. In a Chapter 7 filing, the liquidation of assets takes the tax refund and uses it to pay off the maximum amount of the debt. The rest is written off. In a Chapter 13 filing, the taxes are seized to roll them into an individual’s court-approved payment plan.
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 Wednesday, April 24th, 2013 and filed under Bankruptcy, News and Press | Comments Off on The IRS is a Creditor Like Any Other Business Owed Money .
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If a Debtor Has a Default Judgment Against Them, It May Affect the Bankruptcy Process

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Default judgments typically mean a debtor is quite advanced in the collections process. Creditors do not like having to involve the court and having to file for default judgment, but they will do so if a debtor demonstrates they are ultimately unwilling or unable to pay.  A default judgment is a court order demanding that the debtor surrender money or property to the creditor. If you have such a judgment against you, it means the court has ruled against you for not appearing in court and for failing to pay off a type of loan or a credit card.

One of the ways to stop a default judgment is to file bankruptcy. Filing bankruptcy effectively stops any and almost all legal action, thanks to the “automatic stay.” Even if a creditor has started to enforce their judgment against you via garnishment or bank levy, once you file bankruptcy the “automatic stay” goes into effect and the creditor is legally required to “stay” (cease and desist) all collection efforts against you.  This automatic stay also means that your creditors are not allowed to contact you in any way about your outstanding debt and/or judgment.

The automatic stay remains in effect the entire four to five months that your bankruptcy case is pending, unless a secured creditor (mortgage or car loan) files a motion to have the stay lifted, in which case the court may or may not allow the creditor to resume pursuit of collection in order to protect or repossess the security (house or car) for which payments are delinquent.  When your bankruptcy case is done, you will receive a formal debt discharge decree from the bankruptcy court and the court will close your case.  The discharge decree makes the automatic stay permanent, and there forward your creditors are prohibited from taking action against you personally to collect the debt that you previously owed. In most jurisdictions, the debtor or his/her attorney must also file paperwork in the district court case in order to vacate the default judgment, even if the bankruptcy discharge acts as protection from its enforcement.

Another thing you should understand is that the protection you receive from the automatic stay only remains in place as long as your bankruptcy case is progressing successfully toward discharge. If your bankruptcy case ends up being dismissed, you will lose any protection you had, and thus, the creditors will start the collections process once again. This is something that you need to discuss with a skilled an Iowa bankruptcy lawyer, as it is far too complex a process to attempt on your own.

If you are declaring bankruptcy, it only makes sense to do it according to all the rules and regulations. Failing to do so could leave you back at square one, struggling to get out from under your bills and various judgments. Bankruptcy is not an easy process, but if it is done with the help of an experienced Iowa bankruptcy lawyer, the process can go relatively smoothly.

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 Thursday, January 24th, 2013 and filed under Bankruptcy | Comments Off on If a Debtor Has a Default Judgment Against Them, It May Affect the Bankruptcy Process .
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What is Involved in Foreclosure?

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One of the most common questions debtors have when they speak to an Iowa bankruptcy lawyer is, “What is involved in foreclosure?”

Declaring bankruptcy is a stressful thing to do — with so many details, documents, rules, regulations and various meetings, it can be a nightmare to manage everything. The most upsetting part of bankruptcy for most is the threat of foreclosure.

Generally speaking, foreclosure occurs when a lender takes action to repossess someone’s property — property they have a mortgage against, resulting from money lent to the debtor. In the case of a mortgage, the home is considered to be the collateral. Thus, if an individual stops making payments on their mortgage, the financial institution holding the paper on that property has the right to take the property back on default.

The foreclosure process varies slightly from state to state.  If you live in Iowa, you will want to discuss the foreclosure process with an experienced Iowa bankruptcy lawyer. In general, the overall process is the same, and that is once a debtor has not paid for 90 days, a notice of default is filed with the county to initiate foreclosure. There is a grace period of sorts in this process, where the debtor has the right to bring their mortgage current by catching up on all the payments, or at the very least, working out a plan with the lender.

If neither of these two options is viable, the financial institution will put the home up for auction, which typically takes place on the county courthouse steps. The highest bidder takes the home, and the bidding process is carefully monitored by a bank trustee. The bank trustee’s goal is to cover their mortgage, or at least limit their loss. If this is not possible, the bank trustee bids until they secure the home back, with plans to fix it and put it back on the market.

Bankruptcy can be a very confusing process, and even though it is possible for a debtor to file their own bankruptcy papers, it is not advisable to do so. If something is done improperly, according to the law, the debtor takes a real chance that they could have their petition dismissed, or they could be charged with fraud. There are far too many ins-and-out for a debtor to take the chance on doing the wrong thing. For this reason, consulting with an Iowa bankruptcy lawyer is highly recommended.

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 Monday, January 14th, 2013 and filed under Bankruptcy | Comments Off on What is Involved in Foreclosure? .
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It is not in your best interest to file Chapter 7 without legal advice

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Many people think they can file bankruptcy on their own, without the help of a qualified Iowa bankruptcy lawyer. This is not a wise decision.

While there are some enterprising individuals who may be able to handle filing a Chapter 7 bankruptcy on their own, there are far too many important legal elements and considerations that may inadvertently be overlooked. Every bankruptcy filing must adhere to a multitude of precise rules and regulations, and every debtor must meet stringent requirements and produce specific documents and information.

In the pre-filing stage, some cases require careful analysis and strategic planning to address seemingly-innocuous circumstances.  In the post-filing stage, while the case is pending, some cases must undergo additional strategic planning and negotiation.  It is extremely risky for a debtor to attempt to navigate filing and addressing these issues on their own.  One mistake may well cause the case to be dismissed.

If you are planning to file Chapter 7 bankruptcy and want to ensure that you are meeting all requirements, hire a competent Iowa bankruptcy lawyer to reduce the risk of making a mistake, and to rest assured that you have chosen the most prudent method of dealing with your financial situation.  Your bankruptcy lawyer will not advise you to seek bankruptcy protection if there is another way for you to manage your financial issues.

When you first meet with a bankruptcy lawyer, you can expect to have an honest discussion about your finances. If you have questions, this is the time to ask them. Ask about the bankruptcy process, how to file, what you need to provide in terms of documentation, and what to expect once your petition has been filed with the court. Declaring bankruptcy is a decision with long-term ramifications, and your Iowa bankruptcy lawyer will explain how bankruptcy affects you and how to later rebuild your credit.

One of the main reasons Americans file Chapter 7 bankruptcy is to get their mortgage back on track. They are overwhelmed by all their debt and may be in danger of losing their home. They do not know how to prioritize their mortgage payment without frustrating other creditors attempting to collect on credit cards, medical bills, and loans. Before long, they find that they are facing pending lawsuits, or judgments have been entered, and garnishments are depleting paychecks. They quickly become unable to make utility payments, buy groceries, and put gasoline in their vehicles. Perhaps they are unemployed and have no employment prospects in sight. They fall behind and cannot catch up their payments, despite how hard they may be trying. These are the kinds of situations that typically drive people to speak to a bankruptcy lawyer.

There is no shame in filing for bankruptcy. It is called “debt relief” for a reason. Just make certain that bankruptcy is the best debt relief plan for you, and make sure it is done correctly by hiring competent counsel.

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 Wednesday, November 14th, 2012 and filed under Bankruptcy | Comments Off on It is not in your best interest to file Chapter 7 without legal advice .
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You May Check the Status of Your Bankruptcy Case Online

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If you have trouble finding information about the status of your bankruptcy filing, you may track your status online.

Public Access to Court Electronic Records, also referred to as PACER, provides a debtor access to the information needed to keep track of the post-filing status of his or her case. Though debtors may get information directly from your bankruptcy lawyer or via a court-appointed trustee, some debtors find it frustrating to wait for the information, as lawyers and trustees may not be able to respond immediately. With PACER, you simply need to go online to check your bankruptcy status quickly and easily.  Just visit the site at: http://www.pacer.gov/ and register for a login ID. This system offers access to bankruptcy courts across the U.S., provided you have a valid password and ID. It is easy to register: enter your name, home address, phone number, the name of your nearest living relative, and your date of birth. You will then need to authenticate your registration. To do so, use a valid credit card to finish the registration process and you will receive an assigned password. While it may seem odd to ask for a valid credit card number if the debtor has credit card debt, many individuals do still have valid cards they may use for registration purposes.

Once you have successfully registered, the password is emailed to you, or, if you did not provide an email address it will be sent to you by regular mail. PACER will bill you to view pages. The rate may vary, but typically is about ten cents per page, with a viewing limit of 30 pages. If you are searching for court transcripts, you do not have to pay the 30-page fee limit. Also, parties to a case and their lawyers may get one free copy of all e-filed documents.

Once you have your login and password, you may search the complete list of U.S. bankruptcy courts to determine which one is handling your case. Typically, the courts are separated into districts: In Iowa, select from either the Northern or Southern District. Cases filed in the eastern half of Iowa will be predominantly Northern District cases.  Cases filed in the Des Moines area and west are likely to be Southern District cases.

In order to locate information specifically about your bankruptcy case, you will need to enter your birth date, name and Social Security number. Once this information is verified by the system, all information relating to your case will be made available to you, including the current status of the bankruptcy petition.

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 Thursday, November 1st, 2012 and filed under Bankruptcy | Comments Off on You May Check the Status of Your Bankruptcy Case Online .
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Six Types of Bankruptcy to Resolve Indebtedness

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Under the U.S. Bankruptcy Code there are six types of bankruptcy. They may be found under Title 11.

For those facing the possibility of bankruptcy, it may help to know that there are six types that may be considered. The common types are Chapter 7, Chapter 11 and Chapter 13. The others are Chapter 12, Chapter 9 and Chapter 15. The last three types of bankruptcy are rarely filed.

Chapter 7 often involves liquidation, and businesses or individuals may file for this type of bankruptcy. To do so, the debtor needs to meet a means test to determine if they are eligible to file. Under a Chapter 7 filing, there is a court-appointed trustee/administrator that takes possession of non-exempt assets, and liquidates them. The proceeds of the liquidation sale are used to pay creditors.

A discharge under Chapter 7 typically happens within a few months after the initial petition is filed. There are a high percentage of Chapter 7 bankruptcies where all assets are secured and/or exempt. If that is the case, the file is closed, which means that no property was sold and therefore, there was no money to give to creditors. This is a situation that needs to be discussed with a competent Iowa bankruptcy lawyer.

For people that have a regular income, or for those who do not qualify for Chapter 7, Chapter 13 may be a good option. In this type of bankruptcy, the debtor creates a plan to repay their debts, typically over a three to five year time span. The plan must be approved by the Court. With a Chapter 13 bankruptcy filing, the individual often retains their assets and makes payments under the proposed plan to the trustee. The trustee pays the creditors.

While the debtor is paying off their debt under a Chapter 13 bankruptcy, they are protected from any creditor actions, garnishments and/or lawsuits. In order to have a Chapter 13 bankruptcy discharged, all payments under the plan must be made.

A Chapter 11 bankruptcy is considered to be a reorganization, and is often used by businesses that wish to stay in operation as they are paying creditors under the auspices of a court-approved reorganization plan. Once the plan has been approved by the court, the debtor begins to repay a portion of their debts, while discharging others.

With an approved plan in place, the debtor may revamp/reorganize their business and take action to terminate contracts or other leases and begin to recover assets. In doing so, they should become more profitable and be able to stay in business.

Chapter 12 bankruptcies deal with debt relief for family fishermen and farmers who have a regular income. In many respects, Chapter 12 is similar to a Chapter 13 bankruptcy. During the course of a Chapter 12 bankruptcy, the business person continues to run their operation, and makes payments according to a court-approved repayment plan that usually spans a three to five year period. Again, a bankruptcy trustee takes the money and disburses it to creditors.

Chapter 9 is similar in nature to Chapter 11. However, the debtor is typically a municipality. For example, school districts, villages, counties, towns and cities may file under this Chapter.
Chapter 15 is the newest type of bankruptcy, and was added to the Bankruptcy Code after the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (2005). Chapter 15 deals with cross-border bankruptcy, which means debtors and/or their property, are subject to U.S. laws and the laws or one or more foreign countries.

If you are not certain what type of bankruptcy you qualify for, discuss this with an experienced Iowa bankruptcy lawyer. It is their job to stay on top of the latest changes in bankruptcy law.

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 Monday, February 27th, 2012 and filed under Bankruptcy | Comments Off on Six Types of Bankruptcy to Resolve Indebtedness .
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Bankruptcy Discharge Papers are a Welcome Relief

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Bankruptcy papers are welcomed by debtors who have been through the process of filing bankruptcy.

Bankruptcy discharge papers may not look that important, but they are official, and tell the debtor they have finished the process of discharging their debts. For a debtor that has gone through many months of filing papers, creating repayment plans, discussing their situation with a skilled Iowa bankruptcy lawyer, attending credit counseling and coping with the stress, seeing these papers in the mail is a welcome relief. The papers signal the beginning of a new financial chapter for the debtor.

Many debtors wonder why the discharge papers are so important. They are important because they legally release the debtor from paying most of their debts. There are some debts that are not discharged in a bankruptcy, and this is a discussion to have with an Iowa bankruptcy lawyer at the beginning of the process prior to filing.

The discharge papers also ban creditors from attempting to collect on any of the successfully discharged debts. There have been cases where a creditor has attempted to do that, without success, as they are in violation of the law. With these discharge papers, the debtor can be reassured they will no longer get phone calls, letters or have to worry about garnishment. Once the bankruptcy discharge papers arrive, the debt is history. A debtor can expect, though that the record of the bankruptcy will appear on their credit report for a number of years.

Many people are not certain how long it takes after a person files a Chapter 7 bankruptcy before they get their discharge papers. In most instances, the length of time is roughly four months. There may be circumstances that delay the papers being sent, which is an issue that also needs to be discussed with an experienced Iowa bankruptcy attorney. It is better to have as much information as possible about the process of filing bankruptcy, rather than find out about a delay later.

On discharge, it is a good idea to make copies of the official notice. These may be required if you are attempting to correct any mistakes/omissions on your credit report. It also serves as proof to creditors that your debt has been discharged and that they must cease trying to collect on it. If you lose your original copy, you may obtain one from the court. Often the lawyer hired to file your bankruptcy may retain a copy on his files too.

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 Wednesday, February 15th, 2012 and filed under Bankruptcy | Comments Off on Bankruptcy Discharge Papers are a Welcome Relief .
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