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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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There is Life After Filing for Bankruptcy says Iowa Bankruptcy Lawyer

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Bankruptcy may look like the end of the world to many. But fortunately, it is not.

“I hear a lot of stories in this line of work and one has always stood out in my mind; a woman who lost her house to foreclosure, and even though she declared bankruptcy, she of course, still had to pay $25,000 in student loans. She had quite the journey to get to solid footing once again, but she hung in there and made it. Her advice to others? There is life after bankruptcy and nothing to be ashamed of if life happens and you just can’t manage it. That’s good advice and something I tell my clients. You will get credit again, that is pretty much guaranteed,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

Bankruptcy used to carry a horrid stigma and said to people that those who declared bankruptcy could not manage money and were perhaps also making up their hard luck story to get out of paying bills. The shadow of bankruptcy dogged them for many years and made getting credit very difficult. That is not the case today, when with a solid track record of consistently paying bills, people can get their credit back on track. “Yes, the information that they did go bankrupt is still in their file, but they can come back from that by paying things on time and sticking with their payment plan program,” Ahrenholz said.

Ultimately, the bankruptcy process protects both the creditor and the debtor and lets an honest, well-intentioned person work their way out of a bad financial situation. It just takes persistence and the desire to set things straight and own up to the responsibility of any debts incurred. Do some people take advantage of the system?

“Yes, it can happen and has happened, but with the changes to the bankruptcy laws relating to a means test, it happens less frequently than before. In any process, there are those who work within the system and those who would rather cheat the system. That’s life,” Ahrenholz said.

It is not always easy to work out of a lousy financial crunch and often, despite best intentions, the debtor gets overwhelmed and needs to start over. Filing bankruptcy is usually the answer, but there are some things that need to be done before filing.

“Know what chapter you think would suit your circumstances. If you aren’t sure, that’s what I am here for. Just ask me. This is a complicated process and frankly, I wouldn’t advise anyone to try and tackle it on their own, as they might miss something and be dismissed for doing something wrong. Don’t take the chance when help is just a phone call away,” Ahrenholz said.

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 Tuesday, June 7th, 2011 and filed under News and Press | Comments Off on There is Life After Filing for Bankruptcy says Iowa Bankruptcy Lawyer .
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