Blog | Kevin Ahrenholz Bankruptcy Lawyer

New Small Business Reorganization Act

Posted by: Kevin Ahrenholz

A new subchapter has been added to the bankruptcy code making it easier for small businesses with debt of less than $2,725,625 to seek protection under Chapter 11 of the bankruptcy code.  Previously a Chapter 11 requires so much detailed reporting and documentation that it has been impractical for a small business to file a Chapter 11.  The burdens and costs in doing so were too high, and Chapter 11 bankruptcies were reserved mainly for larger businesses that had sufficient cash flow to justify the time and expense involved.  The new provisions provide some new protections for small businesses that may make filing a Chapter 11 bankruptcy worthwhile going forward.  Chapter 7 bankruptcy will still be available for liquidating small businesses, and business owners can still take advantage of a Chapter 7 or Chapter 13 bankruptcy.

Posted on Saturday, January 25th, 2020 and filed under Bankruptcy | Comments Off on New Small Business Reorganization Act .
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Stop foreclosure with Chapter 13

Posted by: Kevin Ahrenholz

Are you facing the foreclosure of your home?  Has your mortgage company stopped working with you or accepting your payments? A Chapter 13 bankruptcy can be the solution.  If you can afford your monthly mortgage payments, but simply cannot catch up on arrears, a three-year to a five-year Chapter 13 plan could be the solution to helping you catch up, giving you time to become current, and delaying the sheriff sale for the time it takes you to become current.  If you successfully complete the Chapter 13 plan, you will come out on the other side completely caught up on your mortgage, with the foreclosure action dismissed, and you may have discharged or eliminated some of your other unsecured debt (such as credit card debt or medical bills) in the process.  Call Iowa bankruptcy attorney Kevin Ahrenholz today to see if Chapter 13 bankruptcy is the best solution for your situation. He is a bankruptcy lawyer serving all of Iowa, including Cedar Rapids, Des Moines, Waterloo, Mason City, Davenport, Dubuque, Marshalltown, Ames and Ft. Dodge.  Call today at 1-877-888-1766.

Posted on Thursday, January 23rd, 2020 and filed under Bankruptcy | Comments Off on Stop foreclosure with Chapter 13 .
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Bankruptcy and Medical Debt

Posted by: Kevin Ahrenholz

People often call me and ask whether there is something called a “medical bankruptcy.” Although that term does not exist in the bankruptcy code, there is something that helps people eliminate and manage their medical debt. It is called a Chapter 7 bankruptcy. Medical debt can be discharged, or eliminated, through a Chapter 7 bankruptcy proceeding, which typically takes about four months to complete through the bankruptcy court. A Chapter 13 bankruptcy can also help manage medical debt, although it generally takes three to five years to successfully complete a Chapter 13 bankruptcy plan. It is much like a court-ordered debt management plan, and is quite different than a Chapter 7. For more information about filing a Chapter 7 bankruptcy, or a Chapter 13 bankruptcy in Iowa for the purpose of dealing with your medical debt, or any debt for that matter, be sure to contact Attorney Kevin Ahrenholz.

Posted by: Kevin Ahrenholz

Consumers in debt need to be aware of a scam that is taking place in this country by offshore criminals in the Far East, perhaps India.  This may be some of the fallout from the disclosure of personal information at Target in recent weeks.  Anyone who used a credit card at Target between certain dates in November and December may be at risk for having their personal information accessed and provided to offshore criminals who perpetrate these scams.

One such scam involves someone from the Far East with a thick accent placing a call to a consumer who might be in debt to a credit card company or some other lending institution.  The caller knows the name of the creditor, the amount of the balance, as well as information about the consumer.  All of this could have been accessed from the personal information such as name, address, and social security number which might allow someone to pull a credit report to determine the names of the consumer’s creditors.  The consumer is advised that they have a debt of some amount, perhaps near $10,000 to a particular creditor, but the caller claims to be a lawyer from Washington, D.C., or some other metropolitan area.  The phone number they are calling from will have an area code that matches the city they claim to be calling from.  This is a masking technique that anyone can produce using certain telephone vendors.  Anyone can purchase a Washington, D.C., area code and mask their calls as coming from that number .  In essence, someone from India could be calling you, appearing to be calling from Washington, D.C.  In some instances, the caller claims to be Attorney Michael Shaw from Washington, D.C. from the phone number 202-239-6225.

This “lawyer” will then tell the consumer that they may settle their debt for $900.  They are instructed to purchase a Green Dot money card from Walgreens, CVS, Wal-Mart or perhaps other vendors who sell these Green Dot credit cards.  The consumer is then advised to load money onto that card, and then call the “lawyer” from Washington, D.C., with the pin number of that Green Dot card so that the “lawyer” can access the $900 on the card for purposes of settling the debt.

Once the consumer gives the pin number to the “lawyer,” the scam artist from overseas will withdraw everything off the card.  For instance, if the consumer puts $2,000 on the Green Dot card but only authorizes the “lawyer” to take $900, the scam artist will withdraw the entire $2,000 amount.

The overseas scam artist will then call the consumer back and tell them that the settlement has now been declined, and that the consumer will be receiving a $900 refund in the mail.  A day later, the consumer will be called again by this same individual who will tell the consumer that the settlement has now been “approved” and they need to redo the transaction because the refund check has already been issued.  This time the scammer will tell the consumer that there is an additional $200 document fee, and so they will need to withdraw $1,100.  This process will repeat itself as many times as the consumer will allow it with different stories and excuses for why refunds will be issued and why new charges need to be taken from the Green Dot card.  Needless to say, no refund checks are ever sent, and some consumers have been known to lose over $5,000 by the various transactions conducted through this scheme.  In some instances, the consumer may be threatened by the caller, claiming that they will be turned over to the police with a warrant issued for their arrest for not paying their bills. The more the consumer protests, the more aggressive the threats become. In some instances the caller may call dozens of times everyday, harassing the consumer, without any threat of recourse due to his offshore location.  The best strategy is to screen your calls and do not engage this person at all. His attention will soon go to other potential victims if his calls are not being taken.

There are likely several variations of this scam, and consumers, particularly those in debt whose personal information may have been accessed through Target last month, need to be aware of these types of transactions.  In summary, consumers should be very cautious about engaging in any wire transfers, Green Dot transactions, or credit card transactions where debts are offering to be settled.  In addition, personal checks, money orders, and cashier’s checks can easily be counterfeited, and should not be relied upon by a consumer.  If ever you need to contact a creditor, or have been contacted by a creditor for purposes of settling a debt, the best approach is to get everything in writing with signed settlement documents and agreements prior to sending any funds.  Seeking attorney representation in this instance is always a good idea.

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

Posted by: Admin User

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

Posted by: Admin User

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 .

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 https://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

Posted by: Admin User

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 https://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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Unemployment Compensation is Factored into the Bankruptcy Means Test

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If you are receiving unemployment, it is considered in a bankruptcy means test.

For those considering filing for personal bankruptcy, and receiving unemployment, you must provide this information to your Iowa bankruptcy lawyer. This includes all pay stubs from the past year and anything that demonstrates ownership and the value of property you own. This information is used to fill out bankruptcy forms, and that includes Form B22A, referred to as the “means test.” Overall, the Iowa bankruptcy lawyer uses your income, plus unemployment, to perform a means test.

If your income is just above the state median income parameters, you will be told whether you are eligible to file for Chapter 7 bankruptcy, after the means test results are determined. Your means test must include records of any and all income within the past six months, aside from your regular job. The means test process starts by figuring out your current monthly income and what income types are present.

For instance, there are a wide variety of income types that may include:

Real property income
Retirement income
Business income
Contributions to the household income

Note: Social security benefits are not included in the means test.


What happens next is the Iowa bankruptcy lawyer adds up all of your income and divides by six, representing your average monthly income for the six months prior to filing for bankruptcy.  This average monthly income figure is then multiplied by 12 to show your yearly income.  This is compared to the median family income across the state for a household of your size.  If the figure is above the state median, you will initially appear to be ineligible for Chapter 7 Bankruptcy, but the lawyer will take additional steps to figure out your disposable income in order to see if you could get back into a Chapter 7 category.  Disposable income figures are calculated by deducting allowable expenses from your monthly income.

The final step is to determine if the presumption of abuse may rear its head should you file for Chapter 7. In short, if your monthly disposable income is under $6,000, there is no presumption of abuse. If it is more than $10,000, abuse is presumed and you would not be eligible to file for Chapter 7 bankruptcy protection.

Each state is different when it comes to the means test, but in general, your income is figured out along those lines no matter where you live. Always discuss your situation with a skilled bankruptcy lawyer, and avoid the very real possibility that should you attempt to file on your own, you may run afoul of the hundreds of rules and regulations governing bankruptcy.

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

Posted on Thursday, April 11th, 2013 and filed under News and Press | Comments Off on Unemployment Compensation is Factored into the Bankruptcy Means Test .
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A Chapter 13 Mortgage Lien Strip May Remove Second Mortgage for Filers

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A process known as lien stripping can remove a second mortgage for individuals seeking bankruptcy protection.

Many people are not aware of the benefit a mortgage lien strip. If you have taken out a second mortgage on your home to try and keep your head above water, but foreclosure is looming, filing Chapter 13 will halt the process, no matter how far along it is.

Chapter 13 bankruptcy proceedings have a potent tool that allows a debtor to remove the second mortgage. This is beneficial during a housing crisis that may have caused the value of a home to plummet below the amount of the mortgage.

The removal of the second mortgage is referred to as lien stripping, and it is legal in all 50 U.S. states. To qualify for this, the value of the debtor’s house must be lower than the balance of the first/primary mortgage, meaning the second mortgage is not supported by any equity, thus turning the second mortgage into an unsecured loan. This process may not be available to everyone, and for this reason, when declaring bankruptcy, it is necessary to discuss the various options that may apply with an Iowa bankruptcy lawyer.

In a Chapter 13 repayment plan, the second mortgage is regarded as an unsecured debt, like medical bills or credit card bills. Since the bills are paid on a pro-rated basis, in accordance with the court-ordered Chapter 13 repayment plan, the amount to be paid on a second mortgage becomes a mere fraction of what it would have been had the lien stripping option not been applied.

When the Chapter 13 repayment plan has been completed and the debtor has made all court-ordered payments, the second mortgage lien is permanently removed from the debtor’s property. Before choosing this route, it is wise to know the value of the residential home.

To this end, the home will likely need to be appraised. Additionally, homeowners need to check what their property tax appraised value is, because the recession may have caused property tax appraisals to come back higher than the appraised value of the home. Again, this is something that needs to be reviewed with an experienced Iowa bankruptcy lawyer.

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

Posted on Friday, March 15th, 2013 and filed under News and Press | Comments Off on A Chapter 13 Mortgage Lien Strip May Remove Second Mortgage for Filers .
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