Chapter 13 Bankruptcy Is More Complex Than Chapter 7

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Chapter 13 Bankruptcy Is More Complex Than Chapter 7
Des Moines, IA (Law Firm Newswire) April 21, 2011 – 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.
To contact an Iowa bankruptcy attorney, Iowa Chapter 7 bankruptcy attorney, or
set up an appointment visit http://www.iowachapter7.com or call 1.877.888.1766.
Kevin Ahrenholz
309 Court Ave., Suite 805
Des Moines, IA 50309
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Law Firm Newswire
Attorney Press Releases and Legal News
http://www.lawfirmnewswire.com
1.877.888.1766
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