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 » Iowa Bankruptcy options: Chapters 7 and 13

Iowa Bankruptcy options: Chapters 7 and 13

Chapter 13 bankruptcy

Chapter 13 bankruptcy is an affordable, court-ordered debt management plan which lasts 3-5 years. The Iowa Chapter 7 and 13 lawyer for the debtor helps prepare a budget for the court to review and proposes an amount to pay each month to all creditors. Many of these payments will be at zero percent interest. The payments are an amount the debtor can afford, and, after payment period is over, most remaining unpaid, unsecured debt is discharged or eliminated.

Some debts like child support, taxes, and student loans cannot be eliminated. Secured debts on homes and cars can be eliminated if the debtor wishes to surrender the asset. A debtor might pay 5% or 100% of his debt back during this time, depending on the budget that the debtor and attorney create.

Chapter 13 can be more powerful than Chapter 7 in that it can protect co-debtors, eliminate second mortgages, force a mortgage company to stop foreclosure and give the debtor five years to catch up on the loan. Chapter 13 bankruptcy can allow debtors to pay back car loans up to the value of the car and eliminate the portion of the loan that exceeds the value of the car, if the loan is more than 2.5 years old.

Chapter 13 is available to almost anyone, no matter how high the income, and it can be used even if someone recently was in bankruptcy. For debts that cannot be discharged in bankruptcy, a 5-year Chapter 13 plan can help effectively manage this debt through affordable monthly payments. It can be an effective way to deal with IRS debt, student loan collections, child support and alimony payments. Although child support and alimony payments cannot be reduced or adjusted through bankruptcy, your other debts can be, helping you free up enough available cash to stay current.

Chapter 7 bankruptcy

Chapter 7 is the most popular form of bankruptcy in Iowa. Chapter 7 bankruptcy protection gives debtors a clean slate in a very short period of time, and debtors can eliminate unsecured debt without a repayment plan.

In Chapter 7 bankruptcy, the debtor is protected from creditors on the first day the bankruptcy petition is filed. In most instances, the case will be open for about four months, during which the debtor cannot be contacted by creditors. At the conclusion of the case the debtor will receive a “discharge” meaning that most unsecured debts will be eliminated (with some exceptions such as taxes, student loans, fines, penalties, and domestic support obligations like child support).

Debtors have the option to eliminate or keep secured debt, depending on whether they want to keep the secured asset. For example, if the debtor wants to keep his car, he will have to repay the car loan that secures the car. If the debtor is willing to surrender the car, he can eliminate the car loan and avoid repaying it. Another advantage to a Chapter 7 is that it is generally less expensive than a Chapter 13.

While it does not have some of the weapons in its arsenal that a Chapter 13 has with respect to stopping foreclosures, curing mortgages, cramming down car loans, stripping liens, and protecting co-debtors, Chapter 7 bankruptcy may be the most powerful form of bankruptcy protection.

Iowa Bankruptcy Lawyer and Chapter 7 and 13 Attorney

By far the best return on your investment is to file bankruptcy with a Iowa bankruptcy attorney. It is far cheaper to file a bankruptcy than it is to repay interest on debt year after year, without making any gains. But, not many people realize that bankruptcy offers the best return on investment anywhere, on any investment. The average cost of a bankruptcy in Iowa is anywhere from $1,400 (attorney fees and court costs) to $3,000. Assuming a person invests $1,500 into their bankruptcy, and eliminates only $15,000 in debt (a very low discharge amount for most cases), that person will achieve a 1000% return on investment in just four months. A good mutual fund or blue chip stock might give you a 7 – 10% return annually. It would take 40 – 50 years for your $1,500 investment to match what we can accomplish in just four months.

Considering most people eliminate $30,000 – $60,000 or more in debt with their bankruptcies, the rate of return is usually closer to 2000% to 4000%. Is there any investment, anywhere, that could turn $1,500 into $60,000 (or more) in just four months? Nothing is more powerful than investing in your future, and the future of your family, by securing a clean slate, and making a fresh start.

Am I eligible for bankruptcy?

Almost everyone is eligible for bankruptcy, including the very wealthy. The only question becomes which type of bankruptcy is best for you. Some of the wealthiest people and corporations in the world use bankruptcy as a tool to reorganize a temporary financial set back resulting from uncontrolled circumstances. The power of this law is available to everyone, and our office will help you use it to your benefit. Creditors have used laws to make a lot of money off of borrowers. Bankruptcy laws are in place to make sure that those unable to pay have a minimum level of protection, so they can become a thriving, active member of our local economy once again, able to spend money, distribute wealth, take risk, start businesses (i.e. spur our economy), which will benefit everyone, most of all, you and your family.

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