Iowa Bankruptcy Laws should be known by every resident of the state of Iowa. For the most part, consumers are confident to avail various credit card promos because they know that when the worst possible credit scenario occurs they can always turn to bankruptcy protection to eliminate their staggering debts. This might prove true, but one should always be aware of the constant changing federal laws and Iowa bankruptcy laws. Since the state laws depend much on federal laws, it is important to know the basic provisions of federal and state laws.
Every citizen should be aware that 6 months prior to bankruptcy application a debtor is obliged to attend a debt counseling program. The organization administering the counseling should be accredited by the courts of Iowa. Furthermore, it is imperative to have all the supporting documents to prove that you have really attended the program. Some citizens opt not to hire a lawyer, but those who want to retain the services of a competent lawyer is a wise choice.
There are four types of bankruptcy protection that Iowa offers. Of the four, two are appropriately suited for individuals, couples, and families. One of the most attractive bankruptcy program offered by the state is Chapter 7 because it gives a debtor the chance to start anew. While this may be true, there are very strict regulations when it comes to the screening of Chapter 7 applicants. Regardless of the staggering debts you have incurred, you won’t be admitted in this bankruptcy program if your earnings are way above the median income level of the state of Iowa.
Chapter 13 bankruptcy protection program is another alternative to Chapter 7. One of its most prominent benefit is you get to keep your assets. If you have more property to lose like your house or car, you can apply for this kind of bankruptcy. You will need to present a repayment plan to the court together with the necessary paperwork. It is important to carry out this plan in 3 to 5 years. Should the court approve the repayment plan, the trustee assigned to your case will monitor the progress of your payments. It is up to him to receive your monthly funds and distribute it to the respective creditors. There are also some debts that will be discharged as per the court’s prerogative. During the payment period, creditors are instructed to leave the debtor alone. No action will be filed against you by any of the creditors you owe.
The assets that are dispensed in the Chapter 7 bankruptcy program are non-exempt assets. Assets that are protected from creditors are called exemptions. Iowa bankruptcy laws specify the following as exemptions:
• A single house with a limit of $125,000 equity and measures ½ acre inside the city and 40 acres outside the city;
• A single vehicle up to $7,000;
• 75% of disposable earnings;
• Personal belongings amounting to $7,000 that would include clothing, furniture, appliances, and musical instruments; $1,000 for paintings, pictures, and books;
• Farming implements up to $10,000;
• Wedding and engagement rings up to $7,000; and
• Benefits like pension, insurance, group insurance, and public aide.
The intricacies of bankruptcy protection application is testament enough that this course should be taken as a last resort and not just a spur-of-the-moment decision to solve your debt.