Iowa Bankruptcy Planning
State residents with financial troubles can file for complete relief of pre-existing, eligible debts such as credit card and medical bills under Chapter 7, according to the United States Bankruptcy Court for the Northern District of Iowa. Other Iowa residents may elect to partially repay debts under Chapters 13, 12 or 11, notes the 2009 book "How to File for Chapter 7 Bankruptcy."
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Chapter 7 Income Qualification
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People who have lived in Iowa for at least 180 days can only file for Chapter 7 if they economically qualify, notes the book "How to File for Chapter 7 Bankruptcy." The usual standard of eligibility is comparing the applicant's annual income to the annual median income level for the state. As of 2011, a single Iowa resident could earn as much as $40,061 a year and still economically qualify to file Chapter 7, according to the U.S. Trustee Program. The annual median income level for Iowa couples was $55,284, while the figure for a household of four people was $72,961. People who earn more money can only request Chapter 7 bankruptcy rather than a partial debt repayment plan if they prove through a federally devised means-testing formula that they can't repay creditors and care for their families.
Partial Debt Repayment Options
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Chapter 13 is the most common type of partial debt repayment plan requested, according to the book "How to File for Chapter 7 Bankruptcy." Iowa residents who earn steady income partially repay their obligations under court supervision over a three- to five-year period. People who are self-employed or own businesses can combine business and personal debts into a Chapter 11 repayment plan, while Iowa family farmers may opt to restructure their financial obligations under Chapter 12 of the federal bankruptcy code.
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Asset Considerations
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People who file Chapter 7 bankruptcy risk losing many of their assets, warns the United States Bankruptcy Court for the Northern District of Iowa. But retirement accounts and basic personal possessions are always safe from court seizure, notes the book "How to File for Chapter 7 Bankruptcy." As of 2011, Iowa residents could use state exemption laws to retain all of their homestead equity, $1,000 of cash or bank accounts and up to $7,000 of motor vehicle equity, according to Bankruptcy Action.
Court Costs
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Unless you qualify for a fee waiver under federal poverty guidelines, bankruptcy is not free, according to the United States Bankruptcy Court for the Northern District of Iowa. As of 2011, it costs $274 to declare Chapter 13 bankruptcy, $299 to file for Chapter 7 and $1,039 to request Chapter 11. Iowa bankruptcy court staff members cannot accept personal checks, credit cards or debit cards from debtors.
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