Frequently Asked Questions On Iowa Bankruptcy

How much does it cost to file for bankruptcy?

The attorney fees and filing fees for a personal Chapter 7 or a Chapter 13 bankruptcy vary from case to case, but generally the total amount of fees and costs are $1,495.00, with a possible $200.00 discount, making the costs $1,295.00. Our fees are some of the lowest in Iowa. If you’re filing a business bankruptcy, charges are billed on an hourly basis, and the advanced retainer may be closer to $2,500 to $3,500, depending on the complexity.

You do not have to pay any fees until your case is filed, but we do have installment options to assist clients in budgeting.  Your case cannot be filed until the fees are paid. We accept credit cards. If issues arise after filing, you will be billed on an hourly basis several months after filing.

I’m broke, so how can I pay the bankruptcy fees and costs?

If you cannot borrow the money from friends, employers, colleagues or family members, start saving your money instead of paying your unsecured creditors (i.e. credit cards, medical bills, etc.). Any creditor you intend to discharge through bankruptcy, stop paying them and use that money toward your bankruptcy fees.

You may be able to sell some assets before you file and use the proceeds for bankruptcy fees. Your attorney will advise you on which assets you may sell and which you can protect through a bankruptcy proceeding. If you sell an asset for less than its fair market value, or sell it to a family member, business associate or friend, the Bankruptcy Court may undo the sale. Transfers of assets within two years of filing bankruptcy are subject to extreme scrutiny, so consult an attorney and be sure to disclose all transfers.

What happens after a petition is filed?

Approximately one month after filing you need to attend the first meeting of creditors, or the 341 meeting. You will receive notice of this meeting from the bankruptcy court. All individual debtors must provide picture identification to the trustee at the meeting of creditors. Do not miss this meeting. You also will be required to bring bank and brokerage statements to the 341 meeting and sign and return all Reaffirmation Agreements before this meeting.

You may be required to appear in court again if your creditors object to your property exemptions or the debts you’re asking to have discharged. If they do, the bankruptcy court will decide which side will win.
Prior to closing your case, you must complete a course in Personal Financial Management.

Do I have to list all debts?

Yes. Failing to list a debt, concealing assets, or attempting to secretly transfer assets to others within one year of filing bankruptcy without disclosing it on your schedules is fatal to your case. You will be kicked out of bankruptcy and forced to pay back the debts you attempted to discharge in bankruptcy.

What about judgments and garnishments?

It is doubtful that any judgment or garnishment will attach between the time that you pay the retainer and the time you file. In the event a judgment is obtained, we can discharge it in bankruptcy, and we can stop any garnishment action with the filing of your case in bankruptcy.

If a judgment was entered prior to the filing of your bankruptcy, it may appear as a lien on your real estate. Bankruptcy does not eliminate, discharge, or remove liens on real estate, but it will discharge the personal liability or obligation you have to repay the debt.

The creditor can still foreclose the real estate to satisfy the debt if there is a judgment lien. You can remove these liens from your homestead by hiring an attorney to do a lien avoidance proceeding during the bankruptcy, or to do a homestead plat after your bankruptcy is concluded.

Will I lose everything; my home, car?

You may protect your home, a car (up to $7,000 of equity), household goods and furnishings, musical instruments and clothing (up to $7,000), jewelry (up to $2,000), tools of the trade (up to $10,000), retirement plans and cash value life insurance (if you name a spouse or child as a beneficiary), and a small amount in checking or savings (up to $1,000).

If your car or home is secured by a loan against it, you may keep the asset only if you agree to pay that debt. Some creditors want you to sign a document called a Reaffirmation Agreement. If you do not want to repay these secured loans, you must surrender the home or car.

If your budget does not justify reaffirming a car or other personal property, the bankruptcy court may reject your Reaffirmation Agreement. This could allow the creditor to repossess the item, although it is not likely if you remain current on your monthly payments.

What do I do with my credit cards?

It may be possible to keep a credit card by having a zero balance at the time you file bankruptcy. Keep in mind that anything you charge on a credit card within 90 days of filing bankruptcy may have to be repaid.
Bankruptcy will remain on your credit report for up to ten years, but, it is possible to obtain credit from certain lenders after filing bankruptcy.

Many credit card companies and car dealers do not view bankruptcy as an impediment to obtaining future credit. Your interest rates may be higher, but credit may become available to you in the near future, depending on your income, assets, and debt ratio.

What About My Tax Refunds?

You may be able to protect some of your tax refund (less than $1,000.00 of your combined State and Federal refund less accrued wages at the time of filing, and $2,000 for joint debtors), but failing to turn over your refund to the Trustee, may result in your case being dismissed.

Do not spend your refund until you are sure that the Trustee is not making a claim for it.  To ensure compliance you may wish to send all refund money to my attention, and I will disburse the exempt portion of the refund back to you once the Trustee has claimed the non exempt portion. If you usually receive more than $1,000.00 in tax refunds, you may want to consider changing your W-4 before filing, or waiting to file until after you have received and spent your refund.

Will my bankruptcy be reported in the paper?

Whether your bankruptcy filing is reported in the paper is up to the paper. Bankruptcy is a public filing and the petition will be a public record. Many papers do publish the names of those who have filed for bankruptcy, but that does not always happen.

How do I handle phone calls from creditors until I file bankruptcy?

We recommend using caller ID and turning off the answering machine, only answering calls you recognize. You have no duty to talk to creditors, so don’t.

A WARNING ABOUT OTHER BANKRUPTCY WEBSITES !!!!

Not all bankruptcy websites are equal.  Many are nothing more than large marketing conglomerates operated by out-of-state lead brokers (not licensed to practice law in Iowa), who are attempting to sell your personal information to a third party.  You can distinguish these websites from legitimate Iowa bankrupcy law firm websites in that they do not have an attorney’s name or their Iowa location prominently displayed on the website.  They often have you complete a multi-part evaluation form which provides the lead broker with personal information they can sell to a third party, who will then contact you in an effort to sell you something.  Anything you share with us through this website is protected by the attorney-client privilege, which means we are bound by law to keep your information secret.  As a result, no third-party salesperson will be calling you based on anything you share with us through this website.  Information you share with a non-attorney lead broker is NOT protected by the attorney-client privilege and could be published for anyone to see.