Bankruptcy Filing in Iowa
If you're a resident of Iowa who's struggling to pay your debts, bankruptcy may be your only option. Consumers may file for Chapter 7 or Chapter 13 bankruptcy protection, depending on their individual situations. Chapter 7 bankruptcy allows you to eliminate your liability for certain debts completely, while Chapter 13 enables you to repay what is owed over time. If you're considering filing bankruptcy in Iowa, it's important to understand what the process involves.
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Eligibility
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The means test is used to determine under which chapter of bankruptcy you're eligible to file. The means test looks at your income for the previous six months and compares it to federal median income guidelines. If your income for your family size is at or below the established limit, you may be eligible to file Chapter 7. If it is higher, you will likely have to file Chapter 13 instead. As of 2011, the median income limit for a single debtor in Iowa was $39,803. The limit for a family of four was $73,349.
Filing
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All Iowa residents must complete court-approved credit counseling within the 180 days prior to filing. You may file your bankruptcy petition in the Northern or Southern district bankruptcy court, depending on where you live. When you file, you must pay the appropriate filing fee. As of 2010, these fees were $299 for Chapter 7 and $274 for Chapter 13. You must also provide the court with your prior year's tax return, recent income statements, a list of assets and liabilities and a statement of financial affairs.
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Chapter 7 Exemptions
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In a Chapter 7 case, the court may seize some or all of your property, which is then liquidated and distributed to your creditors. The state of Iowa allows you to claim some of your assets as exempt. As of 2010, available exemptions included an unlimited amount of home equity value; a motor vehicle up to $7,000; up to $18,500 worth of personal property, including household goods, furniture, jewelry or cash and up to $10,000 in tools of your trade.
Chapter 13 Repayment
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Chapter 13 bankruptcy is based on a repayment plan, which lasts three or five years, depending on your income. You must provide the court with a copy of this plan, detailing how you will repay what you owe. In Iowa, certain debts, such as tax debts or back child support, must be repaid first and in full. If you owe a mortgage, vehicle loan or other secured loan, these must also be paid in full. Credit card, medical or other unsecured debts are typically repaid last.
Discharge
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Prior to receiving your bankruptcy discharge, you must complete a second course in financial management and attend a meeting of creditors. At the meeting of creditors, the bankruptcy trustee in charge of your case will ask you questions about your financial situation to determine whether your case can proceed to discharge. A Chapter 7 case is typically discharged within two to six months after filing. A Chapter 13 case cannot be discharged until all plan payments are completed.
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References
- Iowa Bankruptcy Guide; Iowa Bankruptcy Law; Jeff Mathias
- U.S. Bankruptcy Court Northern District of Iowa: Chapter 7 Pro Se Filer
- U.S. Bankruptcy Court Northern District of Iowa: Chapter 13 Pro Se Filer
- The Bankruptcy Site.org: Iowa Bankruptcy Exemptions
- U.S. Trustee Program: Census Bureau Median Family Income by Family Size
Resources
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