Last year was really rough for people declaring bankruptcy. Over 1.5 million Americans filed and started over afresh.

“I get asked this question quite a lot when people come to me for a consultation: ‘Can I avoid bankruptcy?’ Overall, that is a tough question to answer, as there are many variables that affect whether or not to file, such as the economy, what your financial practices are like and what your present circumstances are,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

Typically, whether or not a person does file bankruptcy is a matter of personal choice and personal circumstances. While some elect to keep on struggling to pay their debts, others realize that they will not get on top of things without filing. “When to toss in the towel is a very personal decision, one that a lawyer cannot make for you. However, they can certainly assist you in choosing a right route to follow for your particular situation,” Ahrenholz said.

The obvious place to start when considering bankruptcy is to find out what the legal definition of bankruptcy means. “It means when your present income, plus cash reserves, cannot pay all the living expenses, pay interest on loans and/or reduce the principal on the loans for five years, you’re legally bankrupt. Why five years? That’s the max number of years a bankruptcy court lets you work your way out of bankruptcy protection,” Ahrenholz said.

“But, back to the question about avoiding bankruptcy. To do that, you would need skill, some luck and a lot of planning. There are times when all three things come together to make it all happen, and there are times when only one of the triumvirate is present. Timing also plays a large part in whether or not you need to declare bankruptcy,” Ahrenholz said.

These days there are a number of common reasons why people file for bankruptcy protection. They may include being unemployed, bad business decisions, bad advice or timing, a lousy economy, health issues and failure to pay bills on time. These things happen to anyone and most often, they happen through no fault of their own. Most Americans do not have the financial reserves to survive being laid off and having a medical issue at the same time. In fact, most are lucky to have some money to put food on the table.

“While planning to avoid bankruptcy is an admirable goal, even if you do have a higher education and skills that are in demand; that does not necessarily guarantee landing a job. It does not shield anyone from health issues either. You could have the best education in the world but not be able to find work,” Ahrenholz said.

The bottom line is that people cannot always avoid bankruptcy and when the need arises, make sure to make the first phone call to a qualified Iowa bankruptcy lawyer for expert assistance dealing with the complexities of handling all the financial issues.

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.

Guilt tends to dog the footsteps of many people who file bankruptcy, but should it? If there is no other option, something has to be done.

In today’s fast paced and debt filled world, people in over their heads financially often have an enormous personal struggle with the thought of filing bankruptcy. They feel a deep-seated twinge of guilt for failing to manage their financial affairs. But really, should they feel guilty when there is no other option open to them? It’s a tough question and a tough position to be in.

The drowning debtor with guilt is between a rock and a hard place, because in their minds, if they declare bankruptcy, they are deadbeats. They do not want to pack it in and admit defeat and have to face the stigma of having gone bankrupt; a status that will haunt them for many years. So they struggle to keep their heads above water and fail; miserably. And yet, they still want to pay what they owe.

Unfortunately, when things get that bad, there are not many other options open. If their debts are eating them alive every month, it is time to do something; to salvage what is left of their financial stability, without the guilt if possible. This is really a difficult financial decision and has nothing to do with morals.

Sadly, many people feel that if they max out their retirement account to pay off credit cards or bail out their home, that they have the world by the tail. It does not work that way. Retirement funds are protected from creditors and if you spend the whole enchilada, you have nothing for retirement. The true reality of using your retirement funding for credit card payments or trying to save your house, is that for every approximately $10,000 you bleed out of your account, you may well lose close to $100,000 in future income.

If you find yourself on the uncertain road heading towards possibly filing for bankruptcy, do not access your retirement funding without first talking to a qualified and skilled Iowa bankruptcy lawyer. They will tell you right away what your legal rights are and what is protected. You need to make informed decisions about your debt load, not ones that have the potential to completely ruin you financially, putting your retirement in serious jeopardy.

If you happen to have more than one creditor, and many people do, do not dash for cash to pay off just that one creditor, because if you do, what are you going to do with the other creditors? If you have some money to spread about, then spread it amongst all the creditors; don’t pay just one off or the rest may hound you into bankruptcy.

In the final analysis, declaring bankruptcy is difficult and it should never be done without talking to a seasoned Iowa bankruptcy lawyer first. There are many things that will help a financially strapped debtor deal with their situation. If you do not ask the questions, you are left with no options and a lot of mental pain and anguish. If you ask the questions, your lawyer will be able to provide you with clear and concise answers to help you choose what will suit you the best.

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.

If collectors are hounding you and you will be declaring bankruptcy, the automatic stay will stop the harassment.

Those facing bankruptcy have many concerns about the recent changes to the U.S. bankruptcy laws. They feel they are way too friendly for creditors, leaving debtors facing a struggle to handle their unmanageable debts. However, there are provisions to protect debtors and one of those is the automatic stay, found in section 362(a) of the Bankruptcy Code (Code).

This particular section, paraphrased, says that if you file for bankruptcy, the petition automatically halts any collection action by creditors. In laymen’s terms, the stay or stop is similar to an automatic court order that instructs the debt collector to halt all collection activities against the petitioner. As a further point of interest, the auto stay also halts many civil lawsuits against the filer.

The code includes an automatic halt of any collection proceedings, simply because it is assumed that once the petition is filed, the debtor is immediately entitled to Code protections. If you have filed a Chapter 7 bankruptcy, the stay also keeps as much property as possible within the estate to be disposed of later to pay creditors.

If collections agents are still contacting you after you have filed your bankruptcy petition, they may be found to be in contempt of court. The courts will not hesitate to halt any collection efforts and impose penalties and fines. A collector who continues to chase a debtor after a petition is filed may also be ordered by the courts to pay the debtor’s lawyer’s fees relating to collections attempts.

There are also provisions under the newer code to level punitive damages against a collection agent that acts in contravention of a stay. Of course, there are exceptions to this rule of thumb and to find out what those are you would need to speak to a knowledgeable Iowa bankruptcy lawyer.

What does the auto stay do for a bankruptcy petitioner? Among other things, it means the collector must stop any informal collections attempts. They must also cease with any pending lawsuits, stop any efforts to collect on final judgments against a debtor and cease attempts to get a secured interest in a debtor’s property.

You may also be interested to know that once you file for bankruptcy, the code halts any and all attempts to repossess or foreclose on your house. This is applicable whether or not you choose to file a Chapter 13, Chapter 7 bankruptcy or indeed, any other chapter you choose to file bankruptcy under. This is something you should talk to your Iowa bankruptcy lawyer about.

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.

Generally speaking, in a Chapter 7 bankruptcy, the trustee sells non exempt assets and pays the creditors from the sale proceeds.

“While many people think they lose everything in a Chapter 7 bankruptcy, this is rarely the case,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer. “The fact is that bankruptcy is governed by federal law and every state has its own rules about what a person can protect from creditors. These are referred to as ‘exemptions’ and Iowa has several powerful ones, with the homestead exemption being perhaps the most powerful. Very few states have an unlimited homestead exemption, which means you can protect your home no matter how much it is worth, but Iowa is one of those states.”

While there may be limitations on the number of acres that may be retained, there is no dollar limit in a vast majority of cases. “Be aware that there are some limitations on what you can claim,” Ahrenholz said. Generally speaking, for those wanting to file bankruptcy, find out what the exemptions are in the state of residence.

Other states are not very generous with their exemptions, such as Massachusetts, South Carolina and Idaho. “In Massachusetts, the debtor can keep a house worth $300,000; in South Carolina, the house can be worth $5,000 and in Idaho, it can be worth $50,000. How do you figure all that out? It’s usually done by figuring out what the current market value of the house happens to be and then subtracting loans against it,” Ahrenholz said.

“One of the first things you should know is that since your home is typically the most valuable property you own, it will play a major role in whether or not you file for Chapter 13 or Chapter 7,” Ahrenholz said. Before deciding what route to take to file bankruptcy, the debtor has to figure out if they have anything they consider really valuable that they don’t want to lose in their state, and then discuss this with a bankruptcy lawyer.

Many states also have a list of what can be kept and what cannot. Some even have a miscellaneous category for those items that do not seem to fit in any specific category. In some states, a home’s equity is listed too. “Always ask a bankruptcy lawyer what is relevant in the State where you live. It is better to have too much information than not enough,” Ahrenholz said.

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.

People not eligible to file a Chapter 7 bankruptcy may be eligible for Chapter 13. The key lies in protecting non-exempt assets.

“With the recent changes to the Bankruptcy Abuse Prevention and Consumer Protection Act (2005), it got harder for people facing a serious debt load to qualify to file for bankruptcy, because their income is above the state median. Others opt to file under Chapter 13 to protect non-exempt assets from being sold by a trustee,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

For people opting to file bankruptcy under Chapter 13, they need to know that the procedure is a great deal more complex than a Chapter 7. Chapter 13 takes into account a detailed evaluation of income and a person’s expenditures to figure out what would be a suitable repayment plan. Debtors with non-exempt assets who happen to have a below average income according to the state median will typically make payments over a three year period.

“If, however, their income is above the state defined median, the repayment period is over five years,” Ahrenholz said. The maximum repayment window of time allowed is five years. Certain requirements need to be dealt with prior to filing for bankruptcy.

“Before filing, the debtor get credit counseling at least 180 days before their papers are sent in, their unsecured debts must be less than $336,900 and their secured debts must not be in excess of $1,010,650. These particular figures change from time to time, largely because they are based on movements in the retail price index, Ahrenholz said.

There are some circumstances in which a debtor may not file. One of those is if they have willfully failed to put in an appearance for the court or did not comply with a court order during the last six months. The other situation in which a debtor may not file is if the bankruptcy was voluntarily dismissed after creditors went after the sale proceeds of any property they held a lien on.

“There are rules and regulations and exceptions to those rules and regulations. It’s best to ask a qualified Iowa bankruptcy lawyer what is applicable in your individual situation, as no two bankruptcies are alike,” Ahrenholz said.

Typically, to start the ball rolling for a Chapter 13 bankruptcy, a court where the debtor lives is served with a petition. Along with that petition there must be a schedule of liabilities and assets, a complete accounting of the person’s current salary and expenditures, a statement of financial affairs and any executor contracts or unexpired leases.

“There has to be a certificate of credit counseling too, which needs to outline a repayment plan. Wage stubs are required, as is a tax return,” Ahrenholz said.

There is more to this process and it is best to be prepared by discussing the situation and how to proceed with a dedicated and seasoned Iowa bankruptcy lawyer. “While your situation may be similar to someone else’s, the facts will vary in every case. For this reason, we take the time to walk you through what you need to know for your particular set of circumstances. If you have questions, feel free to call us for a free consultation. It’s our job to help you get your life back together again,” Ahrenholz said.

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.

Credit seems to be easy to get to pay bills, but once that albatross gets out of control, the borrower realizes they are in deep debt with no way to get out.

“There are ways to handle debt and get control back over your life,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer. “While it may seem like a daunting task, if you break it up into smaller steps, it’s often quite manageable. As always, I encourage people to contact our offices if they need help and information about filing bankruptcy and what other alternatives are open to them.”

What solutions are there out in the world of debt? Talking to creditors is one. Do this when it has become apparent that debt is a revolving door of getting nowhere fast. Most creditors do offer debt solutions that may include lower interest rates, grace periods and lower monthly payments. “You never know what is possible until you ask,” Ahrenholz said.

Stuck in a rut with no apparent way out? “Try credit counseling. There are many ways to get your budget back on track and tips and tricks to make your life easier. If you cannot afford to pay a counseling company, the other alternative is to find a non-profit organization to give you a hand with your budgeting. It’s far better than doing nothing and letting the debt load spiral out of control,” Ahrenholz said.

Another highly popular way to handle debt is to do debt consolidation. It is a favorite move for many, simply because it gets rid of fees and ends up giving the debtor a lower overall interest rate. “There are companies that do this type of work and they act on your behalf with your creditors and negotiate rates and repayment terms,” Ahrenholz said.

Not comfortable with using a consolidation service? There are free creditor-sponsored debt management plan outfits and ones that ask for payment for their services. This is a good way to help repair damaged credit. “You might also want to consider debt settlement, which means working out a lump sum payment that the creditor will consider as final payment for all that is owed. While this might sound like a super idea, doing this will really affect your credit score,” Ahrenholz said.

There is always a solution to the problem of being in debt. It is up to the debtor to find that solution and avail themselves of it and do what is in their own best interest.

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.

Most people who file for bankruptcy do so because they have no other choice. However, bankruptcy fraud is on the increase, making courts even more suspicious of legitimate petitioners.

“Unfortunately, even though the vast majority of those who have made the difficult decision to file for bankruptcy are legitimately in a financial bind, bankruptcy fraud is on the increase, something which is not good news. The more fraud there is, the less courtesy and consideration legitimate petitioners get. In other words, those really needing help are now being regarded with more suspicion,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

Even though a bankruptcy will dog a person’s footsteps for many years, the fact remains that the bills are paid and the financial future is a lot brighter. This one fact alone has prompted many to commit bankruptcy fraud.

“How do people commit bankruptcy fraud? Some of the methods used are quite sophisticated and difficult to track down. Typically, they hide most of their assets by either giving them to someone else during the course of the bankruptcy proceedings or will just not admit to having them,” Ahrenholz said.

The assets they do declare are then sold to pay off their debts. When the whole thing is over, they simply gather up the rest of their property and get on with their life – their new, debt free life. Obviously, this has come at the expense of someone else’s actual and real dire need to declare bankruptcy. While this is not the only method used to commit fraud, it is the most common one and the easiest to pull off.

Bankruptcy fraud hurts those who really have no other options. The fraud artists are using the system to their advantage and tying up resources that others could desperately use. If and when someone pulling an unethical and illegal stunt like this gets caught, it makes the court system regard those who file with a greater degree of suspicion. For those who are in a legitimate position to file bankruptcy, a jaundiced point of view on their petition from the courts is the last thing they need. They have already been through enough.

“If you have a legitimate need to file for bankruptcy, give my office a call and we will walk you through the process. Your first consultation with us is free. The advice will point you in the right direction for a fresh start on a new, debt free life,” Ahrenholz said.

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.

Those who cannot afford the cost of bankruptcy wind up in a shadow economy, or informal bankruptcy situation. It is a strange state of affairs, brought on by the failing economy.

Whether you know it or not, there are people who need to file bankruptcy because they can no longer handle their debt load. They need to file for relief, but they do not have the money to pay the lawyer. They need cheap bankruptcy because today’s costs are going up exponentially, with no apparent end in sight.

Thanks to the economy and a 2005 law passed to make filing for bankruptcy even more difficult, there is a new group of debtors referred to as the unofficial bankrupt debtors; the people who are all but bankrupt but couldn’t afford the lawyer’s fee to make it official. Many of these people refer to themselves as too poor to go bankrupt. The latest figures indicate that only a small portion of those in real financial trouble can afford to file and do so. The rest languish in the shadow economy, unable to move forward with their lives and on hold financially with their hands effectively tied.

All of this begs the question: why are so many lawyer’s fees so high that people cannot afford to pay them to be able to file for bankruptcy? The hike in fees largely has to do with the law passed in 2005 that made things harder to file and added on more paperwork and forms. This increased the time a lawyer had to spend to assist a client and thus, up went the fees.

In this current economic crunch, it would make more sense for lawyers to charge smaller fees and help people get their lives back on track. There is no shortage of needy debtors who would pay a lesser fee for financial relief. It is almost bizarre to think that a debtor in desperate financial straits needs to save up to go bankrupt. Informal bankruptcy does not just impact on the person who cannot file because they cannot afford it; it affects everyone because it impacts the national economy. Delaying filing bankruptcy is like putting off going to a dentist when your tooth hurts. Wait too long and the pain is worse and there are more problems.

One solution is to file pro se, and do it yourself. This can be a fairly risky and scary option if you do not know what you are doing and what the exemptions are in your state. You could use bankruptcy petition preparers for the paperwork, but without the eagle eye of a skilled bankruptcy lawyer, this is taking a huge risk that something could be missed. Is there an answer to this dilemma?

Yes, find a seasoned bankruptcy lawyer that completely understands what you are going through and does not charge you an arm and a leg to file for bankruptcy. Find one in Iowa that has one of the lowest rates for filing you will find; one whose service is based on a compassionate understanding that filing bankruptcy is something you have a right to do when you need to do it.

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.

Most people facing bankruptcy can afford a lawyer’s assistance, especially in Iowa.

Not all bankruptcy lawyers have rates so high you cannot afford to pay them. There are some that have very reasonable rates and will go out of their way to help you, simply because they understand what it is like to be facing bankruptcy. They offer competent services, are dedicated to helping you through the process and have only your best interests in mind.

These days, it is not unusual to meet a lot of people who are struggling with the specter of going bankrupt; a personal decision that causes many people anxiety, guilt and shame. They feel like they are between a rock and a hard place and just want to salvage their lives and get on with things as best as they can. When they are facing a very real cash crunch where the income does not meet outgoing payments, it is time to make decisions about the future. The awful economy is a burden to many in America, with more and more getting into serious financial trouble. This raises the question of how debtors can raise cash to pay a bankruptcy lawyer’s fees.

If you do not think that things are that bad, consider this. During 2010, there were 1,572,597 bankruptcies filed across the United States. This is 20 percent higher than 2009, when the figure was 1,306,315. This is relevant because the latest figures are the highest for any period since the introduction of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

The idea behind this act was to make it harder and more expensive for anyone to file bankruptcy. Put another way, it tightened restrictions on filing bankruptcy. You would think filings would go down, but instead, in spite of the new law, increasing numbers of Americans are saying bankruptcy is the best option for them to solve their financial predicament and unmanageable debts.

This drastic rise in the number of bankruptcy filings is directly attributable to one factor – people losing their jobs. If you take a good look at the unemployment stats, you will notice that the U.S. still hovers at about a 10 percent unemployment rate. That is a frightening statistic on its own, but add in the fact that the economy has driven service and manufacturing jobs offshore and you get a recipe for bankruptcy. The numbers of foreclosures are creeping up every passing day. Joblessness is the number one reason cited for filing bankruptcy.

When you lose your job, you tend to lose medical coverage. If you have a medical crisis, the bills will drive you to the end of your rope. It is no wonder people choose bankruptcy as the only option to get back on their feet again. But how does a bankruptcy applicant pay their legal bill? This is a good question, as debtors are finding they cannot pay the bill to file because lawyer’s fees and filing fees have gone up and, thanks to the 2005 act, there is even more paperwork and additional forms.

While it may look dismally bleak when it comes to trying to file for bankruptcy and finding the funds to pay for the lawyer, not all lawyers charge higher fees. There are skilled and compassionate bankruptcy lawyers in Iowa who will help you get your life back.

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.

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.

Depending on the state in which one lives, there may be access to state or federal exemptions when bankruptcy is declared. Some states opt for federal exemptions, while states like Iowa opt out and provide state exemptions.

“Filing for bankruptcy means that you have certain exemptions. In a nutshell what that means for you is you are allowed to keep a certain amount of your assets, meaning they are untouched. This means you have the ability to start over again and not be caught up in the vicious circle of debt entrapment,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

If a personal residence is exempted up to a certain dollar figure, it will mean that if the home is exempt up to $45,000, the person filing bankruptcy may have to sell to clear the debt for anything above the value of $45,000. While some of the rules and regulations may seem confusing and intimidating, hiring a competent Iowa bankruptcy lawyer will make the filing go smoothly and without the anxiety most people facing bankruptcy experience. As with anything relating to the law, things change, and exemptions are subject to adjustment every few years to match the current consumer price index.

Depending on the state, there may also be a homestead exemption. “Here is how that works,” Ahrenholz said. “If the state homestead exemption is $25,000 and you have equity in your home valued at $110,000, one would need to file Chapter 13 bankruptcy or sell your home. After the sale, you keep roughly $25,000, with the rest going towards paying your debt. Those living in Iowa are very fortunate because there is an unlimited homestead exemption with a few exceptions to that general rule.”

“Additionally, there are federal non-bankruptcy exemptions and they may be filed under your own state’s exemptions,” Ahrenholz said. Those non-bankruptcy options cover pensions for military service employees, railroad workers, civil service workers and foreign-service staff. “You will also find other exemptions in this area that cover things like public benefits such as disability benefits for government workers and death benefits. There are other areas, but it’s best to ask about those when you speak to your Iowa bankruptcy lawyer,” he said.

There are exemptions that only apply in certain cases, meaning filing bankruptcy is a case-by-case scenario and its best not to assume that exemptions one may have read about are applicable straight across the board for everyone. When in doubt, discuss bankruptcy dos and don’ts with a skilled 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.