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Common Bankruptcy Questions and Answers

On Behalf of | Apr 27, 2019 | Bankruptcy

Bankruptcy can be extremely complicated, whether you are filing for bankruptcy as a consumer or as a business. At Telpner Peterson Law Firm, LLP, we regularly assist clients with a wide variety of issues in consumer and business bankruptcy. Given our experience as bankruptcy lawyers, we want to provide more information about common bankruptcy questions and answers in Iowa.

Q: What Are the Different Types of Bankruptcy?

A: Under the U.S. Bankruptcy Code, there are several different types of bankruptcy that may be available to Iowa residents, including the following:

  • Chapter 7 Bankruptcy: This is a type of bankruptcy known as a “liquidation bankruptcy.” All non-exempt assets are liquidated to repay creditors, and the debtor receives a discharge at the end of the process. This type of bankruptcy may be available to both individual consumers and businesses, but consumers must pass the “means test” in order to be eligible.
  • Chapter 11 Bankruptcy: This is a type of “reorganization bankruptcy” in which debtors create a repayment plan over a number of years to repay creditors. If the debtor follows the repayment plan, at the end of the period the remaining debts can be discharged. This is a type of bankruptcy commonly used by businesses because it allows businesses to remain open while managing debt. Individuals with particularly high debt also may file for Chapter 11 bankruptcy.
  • Chapter 12 Bankruptcy: This is a type of bankruptcy specifically designed for “family farmers” and “family fishermen.” It is also a “reorganization bankruptcy” that allows farmers and fishermen to reorganize debt with a repayment plan.
  • Chapter 13 Bankruptcy: This is another type of “reorganization bankruptcy” that is typically used by individual consumers. It allows a consumer—or a married couple—to reorganize their debts and to pay consumers according to a repayment plan.

Q: Am I Eligible to File for Bankruptcy?

A: Bankruptcy eligibility depends on a number of factors, including the specific chapter under which you are seeking bankruptcy protection. To be eligible for Chapter 7 bankruptcy, a consumer must be able to pass the “means test,” which determines whether a consumer’s income is low enough to allow for a liquidation bankruptcy. Eligibility for Chapter 11 and Chapter 13 bankruptcy depends upon the amount of secured and unsecured debt owed, while Chapter 12 bankruptcy requires the debtor to meet a number of elements as a “family farmer” or “family fisherman.”

Q: Do I Need an Attorney to File for Bankruptcy?

A: While the law does  not require you to have a lawyer when you file for bankruptcy, U.S. bankruptcy law can be extremely complicated. Whether you are filing for Chapter 7 bankruptcy as an individual or a business, or seeking a reorganization bankruptcy under Chapter 11, 12, or 13, it is always important to have an experienced advocate on your side to ensure that your paperwork is filed properly, that you attend all required hearings, and that you develop a successful repayment plan if you are seeking a reorganization bankruptcy.

Contact an Iowa Bankruptcy Lawyer Today

Do you have more questions about bankruptcy, or do you need assistance filing for bankruptcy? An experienced and compassionate Iowa bankruptcy lawyer at our firm can get started on your case today. Contact Telpner Peterson Law Firm, LLP for more information.