When Is It Time to File for Bankruptcy?
Provided under federal law, any United States citizen has the right to file for bankruptcy if he or she is overwhelmed with debt. Legally filing for bankruptcy will automatically stop creditors who are seeking to collect debt from calling your home, and (in some cases), stop the bank from foreclosing on your home. However, bankruptcy status cannot cure all financial problems, nor is it the right step for every individual. There other avenues to financial freedom such as credit counseling, financial coaching, negotiating with creditors, credit card consolidation, loan modification, and loan refinancing to consider before filing.
Should you decide to move forward in your decision to file for legal bankruptcy, here are a few questions to ask yourself:
- Have you been out of work for an extended period and have no unemployment income, savings, or job prospects?
- Are you delinquent on your taxes?
- Do you have a home that is nearing foreclosure?
- Are your wages being garnished?
- Are you involved in pending lawsuits for delinquent bills?
Regardless of your answers to these questions, you should speak with a skilled bankruptcy lawyer to learn more about your potential options.
How Do I File for Legal Bankruptcy?
Filing for legal bankruptcy can be done voluntarily with the help of a bankruptcy lawyer, or if your creditors make a request to the court for you to be ordered bankrupt.
In many cases, people will file under either Chapter 7 or Chapter 13 bankruptcy. Filing for Chapter 7 bankruptcy is popularly known as “liquidation.” Chapter 7, or liquidation, requires a debtor to give up some of their personal assets (i.e., cars, jewelry, and art) to a certain amount, so the assets can then be sold to cover the debt. Alternatively, filing for Chapter 13 requires a debtor to apply for a repayment plan to pay off all or parts of their debt, using their regular income. This is called “debt adjustment.”
Both filing options will require you to file numerous federal court documents to prove your financial status, appear in Iowa district court in order to state the facts of your financial situation, and pay a filing fee of $300 or more.
Reach Out to Us for Help
At Noyes Law Office, P.C., our goal is to make filing bankruptcy as smooth as possible for you. We find that most debtors run into problems and make things harder on themselves than is necessary because they are not fully educated on bankruptcy laws. They overestimate the downsides of filing bankruptcy and imagine outcomes that are not based on the reality of the law. As a result, these debtors think of bankruptcy as an absolute last resort, and wait far too long to seek financial counseling about the benefits the law provides in the bankruptcy process. While it is never too late to seek assistance, the earlier you seek help with understanding what filing bankruptcy can do for you, the more we will be able to help you achieve the best possible financial outcomes for your situation.
Iowa residents who are facing foreclosures on their homes, or are experiencing overwhelming debt, can contact the bankruptcy lawyers at Noyes Law Office, P.C., located in Fairfield, at 641-472-3236. Call us today or fill out our online case evaluation to learn about taking control of your finances.