Written by the Upsolve Team.
Updated September 29, 2020
The minute you’re getting short on cash and aren’t able to repay debts you have incurred, you may feel like you’re putting the future of your family in jeopardy and are under considerable personal stress. However, we want you to take a step back and take a deep breath. While the future might seem bleak, everything’s not lost. By filing bankruptcy in Iowa City you can get out of debt and protect most of your assets (property). Because of the extremely high poverty rate of 28% in Iowa City, a lot of people benefit from the debt relief options available under bankruptcy law.
Filing bankruptcy in Iowa City can provide you with relief from credit card debt and help with steep medical bills or payday loans. By asking for bankruptcy protection, you tell the Court that you don’t have the money to repay your debts. Knowing what kind of bankruptcy is best for you is the first important step in getting the relief you need. It’s important to understand the various differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. A Chapter 7 bankruptcy in Iowa City gives filers complete relief of most debts with little or no repayment. You can also keep your car and home provided you’re current and can continue to make the payments. In contrast, a Chapter 13 bankruptcy creates a 3 to 5-year repayment plan, allowing you to repay the creditors at least some of the debt you owe.
There are many myths when it comes to filing bankruptcy in Iowa City. For example, a common myth in bankruptcy cases is that most people believe that even if they file for bankruptcy, creditors will still harass them and their family. Actually, nothing could be further from the truth. You will be pleased to know that when you file for Iowa City bankruptcy, the automatic staywill go into effect right away, preventing creditors from getting in touch with you. And don’t fall for the myth that you need to pay a fortune to a bankruptcy attorney to learn about bankruptcy protection. You can easily get free legal help, or file on your own (“pro se”).
Iowa City Bankruptcy Lawyers - Estimated Cost
Everyone filing bankruptcy in Iowa City wants to know the cost of a bankruptcy lawyer. After all, bankruptcy typically comes at a time when money is tight. You should consider hiring a bankruptcy lawyer if your case is complicated, as that may be cheaper for you in the long run. The cost of a bankruptcy lawyer in Iowa City ranges from $965 to $1,500; it depends on the complexity of your Iowa City bankruptcy case. However, if your bankruptcy case is simple, you can file on your own. This will save you money that you can spend on your filing fee when filing bankruptcy in Iowa City.
How to File Bankruptcy in Iowa City, Iowa, for Free
When you are not making sufficient money to make ends meet, filing Chapter 7 bankruptcy in Iowa City can be a good solution. Many people find filing bankruptcy in Iowa City confusing; however, don’t worry as we will guide you through this process to make it as simple as possible. Follow these steps to get debt-free.
Collect Your Iowa City Bankruptcy Documents
There is some legwork involved that you’ll want to complete before filing Chapter 7 bankruptcy in Iowa City. While a majority of the information that you’re required to provide to the Bankruptcy Court will be reported on the various bankruptcy forms that you will file with your petition, there are some additional documents you need to have handy. These documents will help you in understanding your financial situation. Some of the Iowa City bankruptcy documents you will need are your pay stubs, bank statements, tax returns, and copies of your vehicle registration. You’ll also need to submit a listing of all your creditors to the Bankruptcy Court, so it’s a good idea to request a copy of your credit report in addition to collecting all your recent bills.
Take Credit Counseling
Credit counseling is a short course that you have to take in person, over the phone, or online, in the 6 months before filing bankruptcy in Iowa City. If you fail to complete this credit counseling course before filing, your bankruptcy case will be dismissed, or thrown out. When filing bankruptcy in Iowa City, you will have to use a credit counseling agency approved for Iowa bankruptcy cases. Once you complete this counseling course, you will get a certificate of completion, and you must file this certificate with the Court along with the rest of your bankruptcy forms. This counseling course usually costs from $10 to $50, depending on the course provider.
Complete the Bankruptcy Forms
One of the most important things to remember when filing bankruptcy in Iowa City is that you have a legal duty to disclose all the requested information truthfully. This is the step where hiring a lawyer could be most helpful if you’re not sure you can handle the forms on your own and aren’t eligible to use Upsolve. Don’t worry if you can't afford to hire a lawyer to help you with the process, because you don’t need one to know the answer to questions about your own life. Plenty of people in Iowa figure out how to adequately complete the Iowa City bankruptcy forms themselves, by following all the instructions carefully. Also, you’re not legally required to have a bankruptcy lawyer to file a Chapter 7 bankruptcy in Iowa City. The main purpose of these bankruptcy forms is to describe your financial status as well as financial transactions.
Get Your Filing Fee
If your income is lower than 150% of the federal poverty guidelines, then you might be able to get your bankruptcy filing fee waived by the Court. To achieve this, you need to file an application to have the bankruptcy filing fee waived when you file Chapter 7 in bankruptcy in Iowa City. The fee for filing bankruptcy in Iowa City is $335. You’ll have to pay this filing fee unless you qualify for a waiver. However, if you’re not eligible for a full fee waiver and are having a difficult time saving up money, you can ask the Court to pay your fee in installments after filing your case.
Print Your Bankruptcy Forms
Once you have collected your Iowa City bankruptcy documents, taken credit counseling from an approved agency, and completed your bankruptcy forms, you’re ready to start the process of filing a Chapter 7 bankruptcy in Iowa City. If you’ve completed all your documents on a computer, you should print everything out twice so that have copy for your own files. As the Bankruptcy Court will not accept double-sided pages, make sure to print them single-sided. Don’t have access to a printer at home or at work? No worries! You can easily find a local print shop in Iowa City. Use standard, white, 8.5" x 11" paper and don’t forget to sign where necessary.
Go to Court to File Your Forms
This is an important step. When you go to the courthouse to file your Iowa bankruptcy case, in addition to other things you have to take care of, is making sure you bring your picture ID. You’ll be entering a federal building, after all, and have to pass through security on your way in. Since Iowa City is in Johnson County, your Chapter 7 bankruptcy in Iowa City will be assigned to the Court’s Eastern Division, though the courthouse where the forms get filed is located in Des Moines. If at all possible, you should plan on heading to Des Moines to file your Iowa bankruptcy case in person. If you can’t make it there during business hours, you can mail everything to the Court instead.
Mail Documents to Your Trustee
Once your Iowa City bankruptcy is filed with the Court, you will be glad to know that most of the heavy lifting is done. The Bankruptcy Court will assign a bankruptcy Trustee to handle your Chapter 7 bankruptcy in Iowa City. The Trustee's job, among other things, is making sure all the information given to the Court is complete and accurate. The Trustee will review all your paperwork, so make sure you send your Iowa City bankruptcy Trustee all the documents that will confirm the information that you’ve given in your paperwork. Usually, they’ll send you a letter shortly after you’re done filing bankruptcy in Iowa City to let you know what they need. If you don’t hear from them, plan to send at least your most recent income tax return and recent paystubs. You can lose your right to get a bankruptcy discharge, which is the Court order that forever wipes out your debts, if you try to keep important information from your Trustee.
Take Bankruptcy Course 2
The Bankruptcy Code requires filers to take another counseling course to learn the basics of financial management and so get the full benefit of their fresh start. Similar to the counseling course that you took before filing bankruptcy in Iowa City, you can only take this counseling course from a provider that’s approved to offer it in your district. When you complete the credit counseling, you’ll have to file a certificate with the Court to tell the judge you have complied with this requirement. If you don’t complete this debtor education course, you won’t receive your discharge. As the discharge is the key benefit of filing bankruptcy in Iowa City, it’s important not to forget this crucial step.
Attend Your 341 Meeting
Every filer, regardless of the type of bankruptcy they file, has to make at least one personal appearance in Court after filing bankruptcy in Iowa City. And that appearance is at the 341 meeting or the first meeting of creditors. The meeting of creditors is held about a month after you filed your Iowa bankruptcy case. Make sure that you are well prepared for the 341 meeting, and don’t forget your picture ID and social security card. Many people filing bankruptcy in Iowa City want to know what their Trustee will ask them at the 341 Meeting of Creditors. Standard questions usually asked by the Trustee at the meeting of creditors include:
Did you list all your assets?
Did you read and sign all the schedules before filing?
Dealing with Your Car
If you own a car, you make sure to list it on your Iowa City bankruptcy forms. Filing Chapter 7 bankruptcy in Iowa City is an excellent way to get out from under an auto loan with a balance that’s considerably higher than what your car is worth. Also, surrendering your car, along with filing bankruptcy in Iowa City, allows you to walk away from your car loan without having to worry about how much your car will fetch at auction. However, in case you can repay your loan and want to keep your car, you can enter into a reaffirmation agreement to keep everything basically the way it was before you filed a Chapter 7 bankruptcy in Iowa City.
Iowa Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Iowa City
Iowa Means Test
While everyone's Iowa City bankruptcy case is different, keep in mind that everyone who intends to file a Chapter 7 bankruptcy in Iowa City must pass the Iowa bankruptcy Means Test. If your income is less than the Iowa median for your household size, you’re exempt from part 2 of the Iowa bankruptcy Means Test calculation. That is why planning ahead is very important when thinking about filing bankruptcy in Iowa City. Find out more about the Chapter 7 income limits to ensure you are properly considering a Chapter 7 bankruptcy.
Median Income Levels for Iowa
Iowa Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Iowa
Iowa Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Iowa Bankruptcy Forms
Note that the Iowa bankruptcy forms comprise several national forms, including your Voluntary Petition, the Statement of Financial Affairs, the Schedules, and the Statement of Intentions. You can find out more about all of the forms needed in your Iowa bankruptcy case here. Some of these Iowa bankruptcy forms are fairly long and complicated, so give yourself sufficient time to go through everything. If you are feeling overwhelmed when filing bankruptcy in Iowa City, check out our free resources and see if you are a good candidate for our service.
Exemption laws in the state determine what property you have that your bankruptcy Trustee can’t touch. When Iowa bankruptcy exemptions apply, exempt assets can’t be used to repay debts. Bankruptcy exemptions in Iowa protect your equity in a specific property, like your home or your car. Individuals keep exempt property when they file a Chapter 7 case. As Iowa has opted out of all federal bankruptcy exemptions mentioned in the U.S. Bankruptcy Code, you can only use Iowa’s state-law exemptions when filing bankruptcy in Iowa City. Under Iowa Code § 627.6(9), you may exempt one vehicle up to a value of $7,000. Retirement accounts and pensions are also exempt under Iowa law.