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Member, National Association
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Fairfield Iowa Bankruptcy Attorney

FAQ
(FREQUENTLY ASKED QUESTIONS)

This is information is brought to you by GANDY LAW OFFICES, P.C. We are licensed to practice law and provide legal advice throughout all of Iowa, USA, only. You are advised that the following information is general in nature, and may apply differently to each person, depending upon their circumstances. You are also advised that bankruptcy laws change from time to time, so you may want to speak directly with an experienced bankruptcy attorney to find out how the current bankruptcy laws apply to your specific situation.

Could you tell me a little bit about bankruptcy?
How long does a Bankruptcy take?
How do I know if I need a fresh start through bankruptcy?
How do I know if I am eligible for a fresh start through bankruptcy?
This is a really hard decision for me. Any help with perspective?
But I am embarrassed. How do I deal with that fact?
What is Chapter 7 bankruptcy?
What happens if I file a Chapter 7 bankruptcy?
Who can file a Chapter 7 bankruptcy petition?
What kinds of debts will go away in a Chapter 7?
What kinds of debts will NOT go away in a Chapter 7?
Can I get rid of Student Loans?
My wages are being garnished. Will that go away?
I have heard of something called a "Chapter 13". What is it?
Who can file a Chapter 13 bankruptcy petition?
Will the bankruptcy stop creditors from calling?
How long after filing will the creditors stop calling?
Who deals with my creditors during the bankruptcy?
What should I be telling my creditors when they call me?
Will my employer or landlord find out about my bankruptcy?
Can my employer fire me for filing bankruptcy?
Can I go to jail if I file bankruptcy or don't pay my debts?
Does the spouse of a married person also have to file bankruptcy?
What assets and property will I get to keep in a bankruptcy?
What is an "Exemption"?
Will I lose my Property?
What happens to my personal property, real property and other assets?
Can I keep my home and automobile?
I have a bank loan on my car and house. Can I keep my car and house?
Are pension plans and 401(k) plans exempt?
Are IRA accounts exempt?
Which debts are non-dischargeable debts?
Can I keep any credit cards?
How will my credit be affected?
Will I be able to get credit after filing a bankruptcy?
Can home foreclosure be prevented?
Will I have to fill out forms?
Will I have to go to court?
Are there alternatives to bankruptcy?
What should I do to prepare for filing bankruptcy?
Can I file a bankruptcy for my debts, but not include my assets?
Can I file bankruptcy to delay a creditor?
Do I have to disclose all of my assets?
Do I have to list all my debts in the bankruptcy?
I’ve lost track of who I owe. Any suggestions?
What if I do not list a creditor on the bankruptcy papers?
How much does it cost for a Chapter 7 bankruptcy?
I'm broke and I don't have the entire fee. Can I pay in installments?
Is there anything else that I should know?
Why choose the GANDY LAW OFFICES, P.C. team to represent me?

Could you tell me a little bit about bankruptcy?

"You have saved our marriage.” -A.V.

Bankruptcy relief is, in many ways, one of the best kept open secrets in America for the almost instant elimination of pain, stress, worry, and personal torment. For most of our clients the hardest thing about a getting a fresh start through the bankruptcy process is making that first phone call. We work very hard to make the process fast, simple, and affordable once you call. The typical Chapter 7 bankruptcy that we handle allows an individual or a married couple to wipe out their debt for a standard fee. It forever cancels most, if not all, of a person's debts (most medical bills, credit cards, most civil court judgments, personal loans, and so forth). Getting a fresh start through bankruptcy rarely causes people to lose personal unsecured assets or property. Even more than that, it offers a new lease on life, enabling people just like you to enjoy a debt-free, higher standard of living with new peace of mind and the ability to breathe again.

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How long does a bankruptcy take?

"The staff was very helpful, and I felt at ease with every visit. Thank you very much for my new start in life, I feel so relieved, no more pressure, no more pain. You people are good at what you do. Thanks again." - P.P.

For most people, once they decide to get a fresh start through bankruptcy they want to do it quickly and get on with their lives. We try to make the process go as quickly as possible. While the whole process can take a few months (and sometimes longer on certain occasions), you should start to feel like you can breathe again right away. As soon as you retain our services, we can begin right away to take your creditor calls. Once the fees are paid, your credit counseling briefing is completed, and all the information is gathered, the paperwork may then be filed with the Bankruptcy Court. The moment your paperwork is filed, the Court enters an order making you immune to most actions a creditor may take to collect on a debt. (That’s why our Chapter 7 attorney fees need to be paid before we file. Otherwise, we might be one of the last creditors that our clients discharge in their bankruptcy.)

From the time you retain our services to the time your case is closed with the court can take up to five or six months for a Chapter 7 filing (a Chapter 13 case has a different timeline as discussed elsewhere). This length of time can be reduced dramatically if you are able to pay your fee more quickly than the three months we normally allow. We also offer expedited service for an additional fee. The time it takes for our office to get your paperwork filed with the court can be from three days to three months. The two main limiting factors are when you are able to pay off the fees, and when you are able to provide us with all the relevant information about your financial situation. However, the time between when we file your paperwork with the Bankruptcy Court and when your case is officially closed is usually around 90 days. Since the process does take some time, it is a good idea to get started right away. The sooner you get started, the sooner you will be able to move on, into a new and brighter future. Delaying a bankruptcy until the last minute may cause you to lose money from garnishments or levies of bank accounts, tax refunds or wages. Utilities may be shut off, vehicles repossessed, and home foreclosures begun. So, it usually does not make sense to delay making the decision to file.

It typically takes at least a couple of weeks to finalize the bankruptcy paperwork, clear outstanding checks through bank accounts, get a client’s financial affairs ready for filing, and finish paying off the entire fee prior to filing. We can often make the best of a bad situation -- for instance, work with a bank to keep a house -- if we have just a little lead time.

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How do I know if I need a fresh start through bankruptcy?

"I was in a bad place in my life. Being a single mom trying to raise children was hard on the budget. I got behind. But thanks to you all at Gandy Law Offices, I have a new start." - R.W.

Having called us is a good sign that some part of you knows you're in trouble; that your financial problems have gotten, or are getting, out of control. One very reliable objective indicator used to determine if debt has gotten out of control is whether your monthly expenses are usually more than your monthly income.

If you have back due bills (taxes, child support, small debts to a number of creditors) that you have been unable to take care of, then the odds are that your finances are strained to the point where bankruptcy may make sense. Another rule of thumb is that if 25%-30% of your take-home pay is going for debts other than house payments, then your debt is probably in the unmanageable realm.

Another indicator may be if there is tension in your personal relationships regarding money issues. It is usually better to swallow your pride, put aside your vanity, and get rid of money worries rather than jeopardize your most important relationships with something that can be so easily taken care of by the simple act of getting a fresh start through bankruptcy. According to Congress, one of bankruptcy's primary goals is to try and save marriages and preserve families where money tension is straining the relationship. In addition, if you are depressed about money issues then it may be time to remove this cloud of despair from your life by the simple act of erasing your debts out of existence through this process.

Other indicators may be specific to the type of debt: for instance, if the thought of destroying all of your credit cards is unthinkable, or if you have taken cash advances on one credit card to make payments on other credit cards, or if you are routinely able to make only minimum payments on your credit cards, then you pretty well know your credit card debt is unmanageable. If you have recently been denied credit then you know that your creditors probably consider you to be insolvent. If one or more of your creditors has referred you to "Consumer Credit Counseling Service" (CCCS), or a similar debt consolidation service, then you can conclude that your creditors have determined that you are essentially bankrupt and that they hope to string you along for a while making payments to CCCS (CCCS was created by, and is solely funded by, the major credit card companies; a notation on your credit report that you have used CCCS may cause future creditors to deny you credit since generally only people with serious financial troubles get directed to CCCS).

Other signs can become such a part of your life and so routine that you cannot even recognize the signals. For instance, if you have to work overtime just to keep up with your bills then you are probably in need of some financial help. If coming up with the monthly car or house payment is always a stressful challenge, then your budget is probably stretched to the breaking point. Or, if you have taken more than one major cash advance on your credit cards within the last year, you probably do not have enough cash coming in to meet bills and expenses.

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How do I know if I am eligible for a fresh start through bankruptcy?

“You guys rock.” - L.K.

As a general rule, by the time folks finally call us to ask questions about a bankruptcy they are usually in relatively serious financial trouble and have no problem at all qualifying for fresh start bankruptcy protection. Generally speaking, if you feel you can't make ends meet and need bankruptcy relief no one will argue with you. At the same time, determining eligibility for bankruptcy relief is a big part of what we do when we initially review your paperwork. Most people who file Chapter 7 have more in monthly bills and expenses than they have income to cover those bills. Please call us to discuss your situation in greater detail. You may very well qualify, even if you have an income that is enough to meet your monthly bills and expenses. It just depends on your total situation.

Common events that may cause money problems include: retirement, loss of a job, too much credit, gambling losses, tax underpayment, death of a spouse, failure of a business, a recent, pending or planned divorce or separation (please immediately call us about the issues that can arise from this), loss of overtime hours, adverse civil court judgments, excessive monthly car payments, illness or mounting medical bills, injury at work or in a car, uninsured accidents, excessive credit card interest payments, impoverishment following lengthy schooling, loss of cash flow due to attempts to start a new business, or simply an inability to keep up with monthly bills.

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This is a really hard decision for me. Any help with perspective?

“You guys done one he** of a job and I appreciate it. THANK YOU!!!!” - Anonymous

The conclusion that it makes sense to get a fresh start through bankruptcy is primarily an economic decision. Major businesses such as United Airlines, Montgomery Ward, TWA, Texaco, Rockefeller Center, Macy’s, Dow-Corning, Greyhound Bus Lines, and Western Union have all taken advantage of the economic protection afforded by bankruptcy.

What do you think of when you hear these names?
Walt Disney?
Thomas Jefferson?
Abraham Lincoln?
Harry Truman?

What does the father of Mickey Mouse have in common with the drafter of the Declaration of Independence, the signer of the Emancipation Proclamation and the author of the Truman Doctrine? They all at one point or another in their lives sought financial protection through bankruptcy. Honest Abe may have even filed twice. But who knows or remembers or cares? And a hundred years from now, or even ten years, who is going to care that you once filed for bankruptcy?

Individuals, including such modern mega-wage earners as Donald Trump, Wayne Newton, Tom Petty, Burt Reynolds, MC Hammer, and Kim Basinger -- even actress Debbie Reynolds, who once owned her own casino in Las Vegas (which is practically the equivalent of owning a money printing machine) -- have all sought bankruptcy's peace of mind.

If Honest Abe had not had the common sense to walk away from his debts and wipe the slate clean he likely would never have been freed up to have gone on to be elected President. Then what would the world look like today?

And what will your world look like in 10 years if you don't deal with your debt now and give yourself your own fresh start?

If you are unwilling to deal with your money problems head-on, then what kind of a life are you condemning your children to as they grow up? What kind of life are you creating for your spouse as you grow old together, or for yourself as you try to attain your goals? No one cares about your financial situation or your family more than you. We are on this earth for but a short time. No one will eulogize you for having paid all your debts on time when you finally depart this world. Who among your creditors truly cares about you, rather than the stream of payments that you represent? The only ones who will remember you for very long once you pass away will be your close friends and family. And, what kind of memories will you have left them if you do not take responsibility for dealing with your debt?

Bankruptcy has been around as long as civilization itself. The Old Testament refers to the practice of forgiving unpaid obligations in the seventh year. In fact, for large periods of time in the history of Western Civilization it was actually illegal for anyone to lend money and charge interest. This was because the effects of credit and never ending interest on society are so destructive. With proper representation, bankruptcy isn’t as big a legal ordeal as you might think. In fact, usually the only time you have to go to anything like a courtroom (and the judge is not present) is for a required 5 to 10 minute hearing at your designated hearing location.

Getting a fresh start through the bankruptcy process is a business and personal financial decision that is simply a fact of life. More bankruptcies are filed in federal court each year than all other types of federal cases combined.

Read this statistic and think about it for a moment: Approximately 1 in every 25 adults that you pass on the street has filed a bankruptcy within the last 10 years, seeking to provide themselves and their families a better economic future. Then they go on to live completely normal, healthy lives. Every weekday thousands people file bankruptcy seeking finally to provide a decent standard of living with some peace of mind for themselves, their children and their spouse. In recent times, the yearly total has been over a million bankruptcies each and every year, so one more bankruptcy filing isn't going to matter too much in the grand scheme of things. But, it may transform your life for the better.

The ability to provide for bankruptcy legislation was explicitly included by the framers of the United States Constitution -- men such as George Washington, Benjamin Franklin, James Madison and Alexander Hamilton. Debt and the anxiety that debt causes can destroy family relationships, physical health, and psychological happiness.

This country was founded and settled by people who knew the value of a fresh start. Historically, before everyone was tracked in nationwide computers as a number, most bankruptcies were informal "geographic" bankruptcies: when debts became too much to handle, folks simply moved away and started over in a new town or state, out of sight of their old creditors. In this day and age of technology, that just doesn't work any more.

The minimum wage remains at a level that will barely support, an individual, much less a family. Here in Iowa tens of thousands of families are locked in a wage-scale that has long since lost pace with the cost of living or the nation-wide average wage scale. A huge number of Iowa families are living hand-to-mouth, paycheck-to-paycheck, just one payday away from financial ruin.

A recent Harvard study shows that wage earners now log an average of an extra month of time per year on the job compared with workers two decades ago. People are working harder just to make ends meet. Much of American business, from manufacturing to banking and insurance, is moving toward the 24-hour office, to increase efficiency. About half of all people say that they would gladly work for less pay in exchange for more free time. Whenever you hear someone say that America has become “more competitive”, what they often mean is that wages and benefits have been lowered and hours increased. In most of the developed “first” world, such as Europe, workers are required to take four to six weeks of vacation each year. Other than school teachers, how many people in this country do you know who actually get to take six weeks of vacation a year?

Thus, many Americans are working much harder simply to service their interest debt and to pay people in a daycare to raise their children while they work. But who among us will sit around in old age and look back on our life and regret that we didn't spend more time at work and less with our family?

Nationwide, many people are simply overloaded with consumer debts. In the 1940's and 1950's the only type of debt nearly anyone had, or could even get, was a home loan or a car loan. The only credit card in existence was a Diner's Club card. Today, people are wallowing in debt, cash advances, credit and interest. And, these interest rates remain at a staggering 15% to 20% and more a year despite the fact that the rate of inflation hovers at around 2% to 4% - with average wage increases failing to keep up with even this modest rate of inflation.

Traditionally, workers salaries “grew” them out of debt: as inflation went up by 8% a year or so their debt became a smaller portion of their disposable income as that income increased. The Federal Reserve has managed to control inflation, keeping it low for many years (at 2% to 4% or so). We all know this. But interest rates on typical credit cards (after teaser rate periods) remain in the double digits. (A relatively new kind of loan mass marketed loan – short term payday loans – have interest rates that can calculate out on an annual basis to triple digits!)

It is this disparity between high interest charges and a low rate of inflation that causes the credit card industry to record profits year after year. We are talking about profits of half a TRILLION dollars or more. These companies have multi-million dollar advertising budgets to persuade you to use their high interest rate credit. Thus, for many of our clients, by the time they seek a fresh start through the bankruptcy process they have long since paid the principal off on their credit cards two or three times over, as a result of unending interest charges and interest payments. So, guess where that half-trillion dollars or so of profit came from?

The chief executive of one of the biggest and most aggressive credit card lenders, MBNA, a few years ago paid over a half billion dollars for the new Cleveland Browns football franchise. In 2005, the reported income for the CEO of Capital One Holdings, a huge issuer of credit cards, was over $200 million dollars! That's $200,000,000.00+! Believe me, these companies have money to spare. The real question is: do you?

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But I am embarrassed. How do I deal with that fact?

“Thanks again for helping us out. You all treated us as people not criminals.” - G.G. & B.G.

Part of growing up and being an adult is making hard decisions when they are in the best interest of ourselves and our families. What most people don't realize is that in most cases very few people, other than your creditors, will ever know that you filed for bankruptcy unless you choose to tell them!

What we also find is that our clients discover that their lives are so much better, so much less stressful, so much more liberating, that we get many, many referrals from former clients who send us their close family, friends and trusted co-workers (many of whom are often in the very same financial situation that they once were).

From our experience, the main thing that prevents many people from filing a getting bankruptcy relief is "false pride."

We see a lot of folks who take pride in the fact that they are "toughing it out" when, in fact, their vanity and pride are negatively affecting the present and future quality of their life in any number of ways. They may be destroying any ability to save for their retirement years, dooming themselves to a life-long cycle of near poverty. They may be abandoning the ability to live in the present without the stress and depression of money woes. They may consistently be foregoing the simple pleasures in life from which fond memories are made, such as taking a child to a movie now and then, spending money for camera film, going out to eat with friends and family once in a while, or actually taking a real vacation once a year. Their trade offs may be even more tragic and long-lasting, such as not bringing a desired child into the world in favor of making endless interest payments to multi-billion dollar corporations charging sky-high interest rates.

We speak with many hundreds of people each year who have fought a losing battle with debt, bringing upon themselves and their families unrelenting stress and tension. We have had clients who have worked so hard at overtime and even two or three jobs that they have had heart attacks or come down with stress-induced diabetes or simply have no time to spend with their own children.

All too often these problems stem from false pride; an unwillingness to deal with their debts head-on and take care of the financial mess once and for all, simply because they are afraid of what someone other than their own spouse or child might possibly think or say out of spite, vindictiveness, or pettiness. It is you alone who have to face your stack of bills each month, the burden of educating your children, of trying to buy a home, and of somehow saving for retirement.

The simple fact is that bankruptcy represents the single best, most realistic, simplest, cheapest option for thousands of people here in Iowa to eliminate unwanted stress and worry, once they stop the denial process.

Income alone is not sufficient to avoid bankruptcy, for we have represented individuals earning high five and sometimes six-figure incomes who needed to seek bankruptcy relief. Legal sophistication alone is not sufficient to avoid bankruptcy, for we have represented attorneys who have sought bankruptcy protection (I myself took bankruptcy relief in 1990. That’s how I came to focus on this area of the law. My experience then taught me that I would have been better served with better results to have had an attorney who practiced primarily in that area. ) Nor is morality the issue, for we have represented members of the clergy who have needed to file for the protection of bankruptcy. The need to file for bankruptcy relief and get a fresh start crosses all economic, social, and age classes. Life is what happens to you while you're busy making other plans. Today will never come again. So, if you keep doing things the way you have been, you really can't expect things to change for the better. And tomorrow will end up being just like today.

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What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy is often referred to as straight bankruptcy or liquidation bankruptcy. It is known as a liquidation bankruptcy because the trustee in bankruptcy can liquidate any non-exempt or unprotected assets to satisfy the demands of your creditors. In a Chapter 7 bankruptcy, most debts are wiped out, and the debtor generally loses only non-exempt property. Despite the term liquidation bankruptcy, property is rarely liquidated, because most property is protected by exemption under state law. When an asset is exempt from legal process, a bankruptcy trustee cannot take the property. The purpose for filing a Chapter 7 bankruptcy is to discharge a debt or to cancel some debtor obligations. A Chapter 7 filer does not have to make payments out of his or her future income to have debts discharged. A Chapter 7 asks the court to erase your debts forever. In exchange you might have to give up some of your property, such as non-exempt assets. It is also important to understand that some debts cannot be discharged in a Chapter 7 bankruptcy.

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What happens if I file a Chapter 7 bankruptcy?

A Chapter 7 bankruptcy proceeding is begun by filing a petition with the bankruptcy court. The person filing a Chapter 7 is referred to as the debtor. The debtor is required to disclose to the court all of his or her property and debts and turn over all nonexempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts.

Who can file a Chapter 7 bankruptcy petition?

Almost any individual, partnership, or corporation may file a Chapter 7 bankruptcy petition if he or she resides, has a domicile, a place of business, or property in the United States. If you filed a bankruptcy petition before and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition.

If you were granted or denied a Chapter 7 discharge in a prior case within the last 8 years or completed a Chapter 13 plan in a prior case, you might not be entitled to receive a discharge in bankruptcy and probably are not a candidate for a Chapter 7 bankruptcy proceeding. This rule does have some exceptions.

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What kinds of debts will go away in a Chapter 7?

“We don’t like him, but he’s the best.” - Local Banker (name withheld)

Just about every debt against you will forever cease to exist. But, generally it must be listed in your bankruptcy paperwork that goes to the court with your creditor's correct name and address in order to go away. Dollar amounts only need to be approximate, but addresses need to be exact. Also, we should list the name and address of any collection agency or attorneys, since we need to list the name and address of the company that currently owns the debt and there is no way to know whether the original creditor still owns the debt or whether it was sold to a collection agency.

All sorts of debts will go away in a Chapter 7: doctor bills, hospital bills, most credit cards, overdraft loans, personal loans, most potential lawsuits, most court judgments -- (call us to discuss court judgments) -- DOT liens against your driver's license stemming from a car accident, and nearly any other kind of debt, including secured loans, as long as you return the secured property. NOTE: A very, very few student loans and a very, very few personal income taxes at least three years old can be discharged in a Chapter 7. This is very complex and we would need to discuss your situation in detail. For instance, if the IRS has placed a tax lien on your real or personal property we cannot get that tax lien off of your property. Although, depending on certain factors, bankruptcy may be able to limit the consequences of a tax lien.

Immediately upon filing a bankruptcy all creditors are put into something called an “automatic stay”. The automatic stay prevents most creditors from making any collection attempts towards a debt. This stops further collection letters, repossessions, bank account seizures, most garnishments, or the commencement or continuation of any civil lawsuits or lien enforcement. This should also end harassing collection letters and stop embarrassing phone calls at home and work. Note, however, that criminal actions or attempts to collect child support are not stopped by a bankruptcy filing.

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What kinds of debts will NOT go away in a Chapter 7?

“ I thought your service was excellent - I felt so badly about having to take bankruptcy and so nervous, but your staff helped me feel at ease and were so understanding and helpful. Thank you.” - P.B.

Examples of debts that will absolutely NOT go away in a Chapter 7 include:

1.All alimony and property settlements owed.
2.All child support (your 1/2 of a child's medical bill is the same as child support).
3.Debts from a prior bankruptcy that were dismissed for fraud.
4.Any obligation of any sort arising from drunk driving or drug use.
5.Criminal fines, restitution or civil money penalties (even traffic tickets).
6.Other debts that probably will not go away for you in a bankruptcy include:
Most taxes, penalties and interest.
Most student loans or school debt of any kind.

If a number of other conditions apply, some personal tax debts at least three years old and some (though very few) student loans may go away or be reduced. You are responsible for determining whether or not your tax debts meet the necessary time deadlines. If you are in doubt, you may want to file a Freedom of Information Act request for documents. We can advise you on how to do this. This area of the law is very complex, so you will need to call us to discuss this in more detail. (If you have old taxes or old student loan debts, you may choose to pay an additional fee to file an action to try to have the court rule that these debts are dischargeable.)

There is now a relatively new wrinkle in bankruptcy law. If your ex-spouse chooses to challenge your bankruptcy they may be able to prevent you from discharging any debts that they were also obligated on prior to the divorce. Please call us immediately to discuss this complex area of bankruptcy law if you have been divorced within the last ten years, and any of the debts that you want to discharge were once also debts of your ex-spouse. Also, call us if you are separated, getting divorced, or think you are going to get divorced. There are no simple answers or risk free strategies if you are dealing with divorce issues.

In unusual circumstances, some other types of debts may not go away in a Chapter 7. For instance, debt incurred to improve your home (examples: remodeling debts, home cleaning or repairs, new furnaces, carpeting or water heaters, plumbing repairs, carpenters bills, lawn care) might not go away. If you have home improvement-type debts, call us to discuss this issue.

Debts involving fraud or fraud-like activity will also NOT go away in a bankruptcy, but generally only if your creditor is alert enough to challenge the debt within a certain time period. If one of your creditors successfully challenges the discharge of their debt for fraudulent activity your debt to that creditor may not go away. For instance, if you have fraudulently written a lot of bad checks and your creditor challenges the debt from going away then that particular debt may not be discharged. Unless you have an extraordinary amount of bad checks this challenge is not usually worth a creditor's time.

Significant debts (approximately $500 for luxury goods or services or more at this printing) borrowed within 90 days of filing a bankruptcy may not go away until at least 90 plus 1 days have passed (during which time you should try to make minimum monthly payments.) Cash advances or convenience checks taken from one lender closer than 70 days before filing, and totaling more than $750, may not be dischargeable. In addition, if you have racked up an extraordinary amount of charges on a credit card or line of credit recently or at a time when you could not have repaid the debt (if for example you were disabled or out of work), or if you have made little or no effort to repay the debt (for instance, made fewer than three routine monthly payments) then you can expect that your creditor may challenge the discharge of their particular debt. This is a problem that a fair number of people run into. The most aggressive credit cards seem to be currently Capital One, MBNA, and Citibank. Let us know if you have any problems such as this, so that we can discuss how best to position yourself to either get rid of the debt or negotiate the debt down as low as possible. If such a challenge is made against you and the challenge has any merit, then the wisest move is generally to have us negotiate a compromise settlement. If you want to have a full-blown trial in front of a judge, this is beyond the scope of our standard representation, and we would have to discuss any fees that we may require as the situation arises. As we say, if the claim against you has merit then you would likely want to compromise and settle the claim against you rather than go to trial.

As with all other debts, we will need to review our completed paperwork to get a handle on these particular debts. In most cases all or nearly all debts go away, but there is no way to guarantee to you ahead of time exactly what will happen in your bankruptcy, since this ultimately depends to some extent on what, if anything, your creditors may choose to challenge.

The best policy is to simply tell us about anything that you have done or that you are worried about so that we can analyze where you stand and try to arrange things to your best advantage before you file. Do not try to change things around or pay anything off without first checking with us. You can do yourself more harm than good, and waste a lot of money and time without first checking with us.

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Can I get rid of Student Loans?

“Your office was very professional, and made our life changing decision more comfortable, in a very uncomfortable situation. Thank you.” - M. & R. O.

Federal law makes it very difficult to get rid of student loans through bankruptcy. The bankruptcy code provides that student loans will not go away unless you can prove that there would be “undue hardship” in trying to pay them, or the loan was for a fraudulent school. But, what exactly undue hardship means has not been exactly defined, and a federal judge would decide on a case by case basis.

Contrary to what you may reasonably think, filing bankruptcy is not enough by itself to prove undue hardship. To prove undue hardship is a special proceeding that can take place in your bankruptcy case. If you have student loans, you will want to talk with us to find out more about what the process means and how it works.

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My wages are being garnished. Will that go away?

“This was a very hard decision for us, your office made it go smoothly & easy. Thank you.” - G. & A. B.

Yes, unless the garnishment is for a debt that will not go away (such as child support, taxes less than three years old, or fines for drunk driving).

The number one thing that costs our clients the most money is DELAY. As an initial matter, delaying getting us your paperwork means that you will continue to strain to pay bills that you could be getting discharged. Every day that you continue to stretch to pay bills that could already be fading into the past as a distant memory is another day when, in a sense, you are losing money. We also see a lot of people who make the huge mistake of taking out a second mortgage or home equity loan, which converts unsecured credit card debt into secured debt and wipes out all their exempt home equity that has taken years to build up as savings for the future.

More importantly, however, delaying dealing with your financial problems allows creditors to take default judgments against you in just twenty to thirty days. In just a few days after that, they may be able to start start garnishing up to 50% of each paycheck (up to 100% if for taxes!). Your creditors may also be able to raid every bank account in your name and take every single penny out of your accounts.

The garnishment itself will often delay filing a bankruptcy. If you think money is tight right now, imagine how tight money will be when your entire checking account is seized by the sheriff and up to half or maybe even 100% of every week’s take-home wages are being delivered directly to the sheriff every payday by your employer. As indicated elsewhere in this packet, all fees must be paid before we file your paperwork. Trying to come up with the filing fee and our fee becomes very difficult when you are being garnished.

In short, starting your fresh start process before anyone files a lawsuit against you can save you a whole lot of heartache, embarrassment (particularly if you are served by the sheriff at work), aggravation, stress, and maybe most importantly, money! Please do not let things get to the point where you are being garnished, or just days away from being garnished, before you get your paperwork back in to us.

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I have heard of something called a "Chapter 13". What is it?

“Personnel was very courteous, helpful, cordial & looking out for my best interests. I would highly recommend Gandy Law Offices to anyone.” - V.R.

How does it compare to Chapter 7? What other forms of personal bankruptcy are there?

Chapter 7: A Chapter 7 bankruptcy typically enables you to immediately free yourself from your debts as if you had never owed them. Congress describes this process as giving Americans a “fresh start” by wiping the slate clean. Congress designed Chapter 7 for debtors in financial difficulty who do not have the ability to pay their existing debts. You may claim much, if not all, of your property as exempt under current Iowa law. The purpose of filing a Chapter 7 is to obtain a discharge of your existing debts.

Chapter 11: A Chapter 11 “reorganization” is designed primarily for the reorganization of a business but may also be available to consumer debtors. Its provisions are quite complicated and it is an extremely expensive and lengthy process. These bankruptcies are rarely done for a basic standard fee fee and a minimum retainer of $5,000 to $25,000 is typical just to get started.

Chapter 12: A Chapter 12 is designed to permit family farmers and family fishermen to repay their debts over a period of three to five years from future earnings and is in many ways similar to a Chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm. All payments are routed through a Chapter 12 trustee who will also monitor the debtor's farming operations during the repayment plan.

Chapter 13: Second to the Chapter 7 bankruptcy, a Chapter 13 is the most common bankruptcy that we file. It takes a lot longer and costs more than a Chapter 7.

A Chapter 13 involves paying into the court all your disposable income from every paycheck for at typically a minimum of three years and up to a maximum of five years! In a Chapter 13 a person must have enough money coming in to meet current living expenses (so that they do not go further into debt) and have money left over to pay down their existing debts. Under a Chapter 13 plan, unlike a Chapter 7, a person can sometimes keep “non-exempt” property (motor boats, RV's, second homes, hundreds of acres of land), as long as they continue to make certain minimum payments under the installment plan. Chapter 13 may allow a person to pay a relatively small fraction on the dollar of what is owed to unsecured creditors. Secured debts must generally be paid in full.

To qualify for a Chapter 13, your debts may not exceed roughly $1,081,400 in secured debt and $360,475 in unsecured debt, as of April 1st 2010. These numbers are indexed to inflation in the bankruptcy code and are updated periodically. After completion of payments under a Chapter 13 plan all debts are usually discharged except: (1) alimony and child support; (2) most taxes and student loans; and (3) secured obligations (like mortgages, home improvement or home equity loans).

It has been our experience that people who choose a Chapter 13 usually do so because either (a) they have filed a previous Chapter 7 within the past 8 years (and therefore cannot file another Chapter 7 yet; (b) they have extraordinary assets (a lot of land, lots of equipment, a vacation home, or a business) that would be lost in a Chapter 7 bankruptcy (since no exemption would apply to them); (c) they do not understand the advantages of a Chapter 7; (d) they simply do not qualify for a Chapter 7 bankruptcy; or (e) their pride keeps them from making the usually better choice of Chapter 7

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Who can file a Chapter 13 bankruptcy petition?

Individuals may file Chapter 13 bankruptcy petitions if they:

  • Reside, have a domicile, a place of business, or property in the United States
  • Have a source of regular income
  • On the date the petition is filed owe less than $360,475 in non-contingent, liquidated, unsecured debts and less than $1,081,400 in non-contingent, liquidated, secured debts, as of April 1st 2010. These numbers are indexed to inflation in the bankruptcy code and are updated periodically.

Corporations and partnerships may not file a Chapter 13 bankruptcy petition.

If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition.

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Will the bankruptcy stop creditors from calling?

Yes. The automatic stay law prevents creditors from taking any action to collect debts. When a person gets behind on paying his or her bills, creditors often take various actions to collect. Creditors may call home or work, family, friends, fellow employees or even your employer. Co-signers and guarantors may be called upon to make payments. Mortgage holders and other creditors may initiate foreclosure or repossession of cars, furniture, and appliances or other items. Lawsuits and collection procedures may be started. Garnishment of wages or seizure of property or bank accounts may begin. The filing of a bankruptcy or reorganization automatically stops collection efforts against you and your property. Once you file for bankruptcy creditors must stop all collection efforts, including phone calls, collection notices, and garnishments. Foreclosures must stop and repossession action must cease. If you file to reorganize your debts, instead of a complete bankruptcy, collection action can also be stopped against co-signers and guarantors on consumer type debts. Only a few actions are not halted by a bankruptcy. Criminal proceedings cannot be stopped. An action to collect child support, or alimony cannot be halted. However, a reorganization plan may provide a viable means of catching up on past due child support or alimony.

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How long after filing will the creditors stop calling?

If you choose to retain GANDY LAW OFFICES, P.C. for the service, you can have all creditor calls directed to our office. This way, creditors will no longer be able to call you at home or at work as soon as you meet the retainer fee. Otherwise, once a creditor becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. In urgent cases, we will contact the creditor immediately upon filing the bankruptcy petition, especially if a lawsuit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy it may be liable for court sanctions and attorney fees for this conduct.

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Who deals with my creditors during the bankruptcy?

If you choose to retain GANDY LAW OFFICES, P.C. for this service, we will deal with your creditors once we undertake your representation, which starts once the retainer fee is paid, and we accept you as a client.

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What should I be telling my creditors when they call me?

“I was pleased and relieved to have a honest and outstanding firm as yours - have had a couple of bad experiences in the past. Thank you very much.” - R.H.

Okay, I think I'm going to file a Chapter 7 bankruptcy and get rid of my debts. What should I be telling my creditors when they call me?

After you retain our law firm you have the option to route all creditors to our office. This a part of what we offer for our standard fee. (For more complicated cases we may charge a small additional fee.) We find that many clients enjoy being able to hear the phone ring and not have to worry about it being a creditor, and if it is, they can tell them to call somewhere else.

When you retain our office to handle creditor calls, all you say is, “I’ve hired a law firm to handle my financial affairs. Here’s their name and number...” And it’s as easy as that! You don’t even have to tell them that you’re filing bankruptcy. (See our handout “What to Do About Creditor Calls” for more details.)

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Will my employer or landlord find out about my bankruptcy?

Bankruptcy petitions are public records. However, under normal circumstances, unless your employer or landlord is a creditor, he or she will not know you filed a bankruptcy petition. If your employer or landlord is a creditor he or she must be listed as a creditor on the schedules and will receive notice of the bankruptcy proceeding.

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Can my employer fire me for filing bankruptcy?

No. The law prohibits government units and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.

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Can I go to jail if I file bankruptcy or don't pay my debts?

No. There are no debtor's prisons in the United States.

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Does the spouse of a married person also have to file bankruptcy?

No. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable, it might be advisable to have only one spouse file.

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What assets and property will I get to keep in a bankruptcy?

“Freedom is amazing, we can answer our phone again and actually have money in the bank!” - K.

A good deal of personal property remains safe from creditors under Iowa law when filing bankruptcy. Having an experienced bankruptcy lawyer that knows the law, and knows precisely what motions to file in order to keep all of your belongings exempt from your creditors is crucial to a successful fresh start bankruptcy. You must list all of your assets of any kind in a bankruptcy. Failure to list all your assets will expose you to a possible FBI investigation, review of all financial transactions tied to your social security number, followed by a possible criminal prosecution, loss of bankruptcy relief, prison and large criminal fines.

How do you avoid any of these problems? Simple. Just be honest and answer all our questions truthfully. Tell us about all your property, all your lawsuits, any transfers of money or assets, and any closed financial accounts. Gandy Law Offices has filed a couple of thousand bankruptcies over the years, since the early 90's, and our clients do not have these kinds of problems because we insist that they tell us everything! It's just that simple. It's just that easy. You have absolutely nothing to worry about if you are honest with us.

“Exemptions” are the key to keeping your property and assets in a bankruptcy. Iowa has its own very technical rules dealing with what property may be kept “exempt” from creditors in a bankruptcy. Some of these exemptions are among the most generous of their type allowed by any of the 50 states. For instance, in Iowa a person's home -- no matter what its value -- is usually exempt from creditors, to the extent the home is not “collateral” for a debt. In a bankruptcy, most of our clients end up losing none of the property they own free and clear, if the proper motions are filed at the proper time and their paperwork is properly prepared. Make sure you are aware of the current laws affecting your particular situation before proceeding with filing.

Most exemption categories may be “doubled up” or “stacked” if you and your spouse both file for bankruptcy jointly. For example, a married couple can often “double up” and keep two unsecured cars each with up to $7,000 in equity or they can “stack” their exemptions and keep one unsecured car with up to $14,000 in equity. Again, let me emphasize that most of our clients lose none of their property in a bankruptcy.

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What is an "Exemption"?

Certain property is protected from creditors in bankruptcy. This property is known as exempt property.

Will I lose my Property?

Under Iowa law, certain assets are exempt from legal process. This means that they are protected, and cannot be taken from you if you own them, or to the extent that you have equity in them. For example, each person who files can protect one motor vehicle up to a fair market value of $7000. If you owe $2000 to a creditor for the vehicle and it is worth $7000, you can protect the $5000 of equity with your exemption. Generally speaking, most people can protect most, if not all of their household goods and furnishings, their clothing, the cash value of their life insurance, retirement and pension plans, and the tools of their trade up to a maximum value of $10,000. To obtain further information on the complete list of exempt property and whether you could lose any property if you filed a bankruptcy, it is recommended that you contact an experienced bankruptcy attorney. If property is not exempt, then it is not protected, and a Chapter 7 bankruptcy trustee could sell this property and pay creditors with the proceeds. If a person owns a significant amount of non-exempt assets, they may be able to retain them by the filing of a Chapter 13 bankruptcy, and paying their unsecured creditors at least the value of these assets.

What happens to my personal property, real property and other assets?

All of the property you own at the time of filing bankruptcy, and your right to receive property in the future, becomes the property of the bankruptcy estate. This means that the bankruptcy trustee may take control of this property and liquidate it to satisfy your creditors.

Certain property is exempt and you will be able to keep that property. Iowa has a schedule of exemptions which allows the debtor to keep most if not all personal property through the bankruptcy. More times than not, all of your assets can be protected.

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Can I keep my home and automobile?

In many cases you can retain your home and automobile in a Chapter 7 bankruptcy proceeding. You will keep your home or automobile in a Chapter 7 if (1) you are current in making payments on a loan secured by the home or automobile; and (2) the home or automobile does not have equity (a liquidation value in excess of the amount owed to creditors with liens against the property) in excess of what you are allowed to exempt. Iowa has a separate exemption which allows each debtor to claim $7,000 in equity on one vehicle. So in the case of a joint filing, the husband and wife each have a $7,000 exemption in which to protect a car through bankruptcy. In the event you want to keep your home or automobile, you must continue to make payments after your petition is filed. If you are in arrears on your home home or automobile, you can consider filing a Chapter 13 petition, which allows you to develop a plan for repaying your creditors without necessarily liquidating assets.

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I have a bank loan on my car and house. Can I keep my car and house?

“Praise God, you all helped me thru this.” - J.W.

Yes. Through Chapter 7 fresh start bankruptcy you can essentially “pick and choose” which creditors you want to keep paying off, and which ones you want to get rid of.

There are several different options that you have when it comes to deciding what you want to do with the collateral - in other words - something that a creditor can take away from you if you do not pay for it.

One of the options is surrendering the property to the creditor. It is important for you to understand the difference between surrendering the property THROUGH the bankruptcy process and surrendering the property OUTSIDE of the bankruptcy process. When you surrender the property to the creditor through bankruptcy, you’re eliminating your personal financial responsibility on the debt. When you surrender the property outside of bankruptcy, your personal financial responsibility for the amount owed to the creditor may remain. This means that the creditor could sell the property for less than you owe, and you could still be responsible for the remaining amount due.

Another option is something called "'redeeming". To "redeem" the property is to pay the entire amount owed to the creditor in one lump sum, pay a reduced amount to the creditor in one lump sum, or to negotiate a new agreement with the creditor in which the payments are lowered. Redeeming the property isn’t always available with creditors. The creditor needs to be contacted to find out if it is willing to redeem the property. Call us if you have any questions about redeeming your property.

The next option is something called "retaining and keeping current". When you "retain and keep current" you are simply agreeing to pay the amount owed to the creditor without signing a new agreement. This means that the original contract that you signed is still in effect except that your personal financial liability on the debt is removed

Another option is something called "reaffirming" the debt. "Reaffirming" the debt means you basically re-sign the original contract with the creditor. This means that you are just as obligated to pay on the debt after your bankruptcy as you were before the bankruptcy.

The difference between retaining and reaffirming is the obligation that you have to pay on the debt. Through retaining, you are agreeing to pay on the debt as originally stated. If for some reason you are unable to pay on the debt in the future and the creditor repossesses the property (a vehicle, mobile home, or piece of real estate for example) you are not personally obligated to pay on the amount owed after the creditor sells the property. Your personal financial responsibility is eliminated because you did not re-sign or “reaffirm” the debt.

On the other hand, when you reaffirm the debt with the creditor and for some reason you don’t pay on it in the future, the creditor can still collect from you the amount owed after they repossess and sell the property. Your personal financial responsibility is reinstated through reaffirmation. Should you retain Gandy Law Offices as your bankruptcy lawyers, we will go over with you the differences, and advise you as to what choice you should make.

One of the biggest myths in bankruptcy is the idea that you can keep your property without paying for it when there is a lien on it. Having a lien on your property means that it is the collateral for a debt -- it can be repossessed if you don’t pay your bill. If you want to keep property with a lien on it, you must pay for it. The only way around this through a specific process called voiding a lien. Some liens, though not many, can be removed in this way if the circumstances allow it. One of the most common examples is when you put up a piece of your own property, that you already own, as collateral. For example: You apply for a loan at Citifinancial for $1500. You put up your TV, VCR, and entertainment center as collateral for the $1500. This means that if you do not pay on the loan, or if you fail to meet the requirements of the agreement with Citifinancial, they can take the TV, DVD Player, and entertainment center from you. The lien on your property may be removed through the process of voiding a lien. The result is you keep the property and you do not have to pay Citifinancial. Check with us if you have questions about voiding a lien.

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Are pension plans and 401(k) plans exempt?

The United States Supreme Court has held that pension plans, 401(k) plans, and other "ERISA-qualified plans" are generally "excluded" from the bankruptcy estate.

Are IRA accounts exempt?

Unlike 401(k) plans, IRA accounts are not ERISA-qualified plans and are only exempt in certain circumstances and to a limited extent. You will want to speak with an experienced bankruptcy attorney if you need to find out more, since the law in this area in Iowa has changed.

Which debts are Non-dischargeable debts?

Not all debts can be discharged by bankruptcy. Examples of non-dischargeable debts include recent taxes, government fines, and debts to spouses, former spouses, or children for support, maintenance, or alimony. In addition, debts to creditors that are not informed of the bankruptcy proceedings are also likely non-dischargeable. For example, if you forget to list a creditor, that creditor may not be discharged. As a general rule, student loans are non-dischargeable unless the debtor meets specific guidelines. If you have a student loan it is a good idea to talk to an attorney to see if your particular case meets these guidelines. Certain debts incurred through intentionally deceptive or malicious behavior of the debtor are not dischargable. Also, debts that arise from damages, or injuries to another involving drunk driving are non-dischargeable. Generally, under Chapter 7, these debts cannot be discharged, however, Chapter 13 allows one to repay these debts over an extended period of time. There are also some limited exceptions where these types of debts can be discharged in Chapter 7.

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Can I keep any credit cards?

Under some circumstances you may be able to keep some credit cards if the creditor agrees. There are many factors which must be considered, including the credit card balance at the time of the bankruptcy, what terms the credit card company is willing to accept, and your ability to pay the present and future credit card debt.

How will my credit be affected?

Many people believe that filing a Chapter 7 or Chapter 13 bankruptcy will ruin their credit for seven or ten years or longer. Most credit reporting agencies will keep a Chapter 13 bankruptcy on your credit report for seven years. A Chapter 7 bankruptcy will usually stay on a credit report for ten years. One of two circumstances usually applies when a person considers filing a bankruptcy. Either they are in financial difficulty, or anticipate it, and are looking for a way to avoid it. In either of these two cases, a bankruptcy may not hurt one's credit, but may in fact be the first step towards repairing a bad credit situation. Probably the most important situation for which you might need credit is buying a house. Federal regulation may allow you to get a mortgage two years after bankruptcy if you are otherwise eligible. Many people buy a house less than two years after bankruptcy by assuming a mortgage, or buying a house on contract. Nearly anyone can obtain a bank credit card even if they have just filed bankruptcy, by depositing money in one of the banks that offers secured credit cards. You use the card just like any other credit card, but the bank uses the money you deposited to assure that you make the payments. People forget that someone lending money is primarily interested in knowing whether you can, and will, pay them back. If you get yourself out of debt by filing a bankruptcy, you are better able to pay back any new money you may borrow. Many creditors noting a bankruptcy or Chapter 7 or Chapter 13 reorganization on a credit report, are more interested in knowing what you've done since completing the bankruptcy to make yourself a good credit risk.

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Will I be able to get credit after filing a bankruptcy?

“Everything was explained so that I understood, which made me feel at ease with the staff. Thank you so much for the fresh start.” - A.S.

Probably. In particular, used car loans are usually pretty easy to get after you get your final discharge, which is generally about three months after filing your bankruptcy. There are a lot of car dealers who specialize in financing cars for people who have recently been in bankruptcy. You can usually see advertisements for these types of dealerships on T.V. or in your local newspaper.

Many clients ask what their credit report or credit score will look like after filing a bankruptcy. Our response is: Well, what does your credit report look like now? From a credit rating, credit report, or credit score standpoint our clients are often in no worse a position after filing a bankruptcy than before, since their finances were such that it was highly unlikely that any significant credit (like a home loan) would have been given to them. In many cases filing a bankruptcy actually improves a person's credit rating because it eliminates bad debts that have been festering on a credit record for some time. Many people are surprised to learn that bankers consider one of the riskiest categories for home loans to be educated, working married couples with young children since they are often the most debt burdened (student loans, car loans, doctor bills, credit cards). Wiping out this “mid-life” debt can actually make a married couple more credit worthy for a home loan in the eyes of bankers. Instead of your credit report indicating that you have numerous collection agencies hounding you for money, or that you’re past due on several different accounts, it will simply state: (1) that you filed a bankruptcy and each particular debt is discharged in bankruptcy and (2) that you now have NO debts. Another factor on your side is the fact that creditors know that you can’t file another Chapter 7 bankruptcy for 8 years. Many will be more willing to give you credit based on this fact.

There are also many different ways to start rebuilding your credit so you can make an investment for the future. Choices such as secured credit cards or keeping a car or house payment through bankruptcy start the credit rebuilding process immediately (for which you will likely get promotional material soon after or even during your fresh start process). And, of course, you'll want to make sure that you pay whatever bills you keep, such as utility bills, rents, etc., on time and in full. But remember, even though, credit may come more easily than you thought after your fresh start, be careful as best you can to avoid sliding down that slippery slope to too much debt again.

Many of our clients have a far from perfect credit report to begin with. Even if their credit report was perfect, the actual finances and economic and psychological health of their families are far more important than a slip of paper glanced at perhaps once a year by a creditor. This creditor may be someone or some company who doesn't care about you or your family, but is only interested in charging you an interest rate at ten times the rate of inflation. Years ago a bankruptcy would stay on your credit report all of your life. Now, the federal law states that the fact that you filed a Chapter 7 bankruptcy must be purged and removed from any credit report after 10 years.

Given the large number of bankruptcies, its occurrence is only one factor that lenders look to these days, since the pool of business represented by the millions of people who have gone through this process is too large to ignore. Many creditors will view a person who has recently taken bankruptcy as a worthy credit risk for two primary reasons. First, after filing bankruptcy a person generally has very few debts that need to be serviced, which means any new loans are fairly easily paid off. Second, an individual may not file another Chapter 7 bankruptcy for at least 8 more years, so most creditors will be paid off before another bankruptcy could possibly be filed. Experience indicates that most creditors will loan an individual money following bankruptcy based upon (1) their employment circumstances and (2) their current ability to pay back the loan. We have found that the general rule of thumb applied by most lenders is that if a person has shown responsible money management for a period of time following the fresh start process, they are viewed as a worthy credit risk.

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Can home foreclosure be prevented?

When you get behind on your house payments, the creditor may elect to call the loan in default, accelerate the debt, and begin foreclosure proceedings. When a debt is accelerated, the full balance of the note, not just the monthly payments, is due in full immediately. This is usually preceded by the creditors refusal to accept monthly payments. In the event a creditor begins foreclosure, you will receive notice of the commencement of the foreclosure proceeding. Unless the creditor is willing to accept payments to reinstate the loan, you will either have to pay the full balance remaining on the loan, or file for protection in bankruptcy to stop the foreclosure sale. The commencement of the bankruptcy case prior to the foreclosure sale date will stop the foreclosure sale from taking place, unless or until the creditor receives permission from the bankruptcy court to proceed with the sale. Under a Chapter 13 plan, you make regular monthly payments and are given a reasonable period of time to bring your loan payments current in order to save your property. It is strongly recommended you review your bankruptcy options as soon as you realize that you are behind on your mortgage payments.

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Will I have to fill out forms?

Filing bankruptcy means filling out forms. Our staff will help you through the worksheets and answer any questions that you may have. We have created the forms to make it as painless of a process as possible. We will ask you to fill out forms to provide us with the information needed to prepare the bankruptcy petition. We will use the information you provide to complete the official forms, using a specialized computer program that complies with all the Court's requirements.

Will I have to go to court?

About 30 to 40 days after filing the bankruptcy petition, you will have to attend a 5 to 10 minute hearing presided over by a bankruptcy trustee. This hearing is called the First Meeting of Creditors. The trustee is not a judge, but an individual appointed by the United States Trustee to oversee bankruptcy cases. At the First Meeting of Creditors the trustee will ask you questions under oath regarding the content of your bankruptcy papers, your assets, debts and other matters. Myself or one of my associate lawyers will be there right by your side to answer any questions and to help the process go as smoothly as possible. Creditors will also be permitted to ask you questions, although in the majority of cases creditors do not ask questions at the First Meeting of Creditors. After the initial meeting you normally do not need to return to court.

Are there alternatives to bankruptcy?

Yes. Sometimes payment plans can be negotiated with creditors. Obtaining loan extensions, compromises and workout agreements require negotiation skills and experience. These alternatives may alert your creditors to the existence of nonexempt property that the creditor could reach and can involve considerable expense. You also have the option of doing nothing. In any event you should seek professional advice in dealing with most of these alternatives.

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What should I do to prepare for filing bankruptcy?

First, you should consult with an attorney. An attorney can help you plan for the bankruptcy, decide when to file a bankruptcy petition, or even avoid filing for bankruptcy. A few specific items are worth mentioning.

If you intend to file bankruptcy you should stop using your credit cards. If you borrow money with the specific intent of discharging the debt in bankruptcy instead of paying it back, the debt is not dischargeable. In addition, (a) certain luxury purchases over $500 within 91 days of the bankruptcy filing are presumed non-dischargeable; (b) cash advances aggregating $750 taken within 71 days of the bankruptcy filing are presumed non-dischargeable; and, (c) debts involving materially false financial statements are non-dischargeable under certain circumstances.

Don't transfer your assets to friends, family and business associates to protect the assets from your creditors. The transfer may be considered a fraudulent conveyance. If it is, you may lose both the property and your right to a bankruptcy discharge.

Don't destroy any business or financial records. You can lose your right to a bankruptcy discharge as a result.

Carefully choose the creditors you pay. Some creditors, such as landlords, secured creditors, and some utilities should be paid under most circumstances. If you pay a credit card debt that eventually will be discharged, you may be throwing money away. We can advise you on what debts should and should not be paid while you prepare to file a bankruptcy petition.

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Can I file a bankruptcy for my debts, but not include my assets?

No. By Federal law you are required to include all debts and assets.

Can I file bankruptcy to delay a creditor?

The Rules of Bankruptcy Procedure require you or your attorney to certify that your petition is not filed for any improper purpose, such as to harass or to cause unnecessary delay. Bankruptcy is intended as a tool for dealing with debts that can not otherwise be paid. You should not file a bankruptcy petition for the sole reason of delaying a creditor's actions.

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Do I have to disclose all of my assets?

Yes. If you knowingly and fraudulently conceal an asset from the court you have committed a felony and can be fined up to $5,000, imprisoned for up to five years, or both. In addition, the court can deny you your discharge, or dismiss or convert your bankruptcy proceeding. If you have any questions please do not hesitate to ask.

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Do I have to list all my debts in the bankruptcy?

“You really go to bat for your client.” - M.H.

Yes! Yes! Yes! By federal law you must list everything, then you may be able to pick and choose which debts to keep paying off.

So, be sure to list any debt. Even if it is a really old debt. Even if it may be long forgotten. Even if you intend to pay it off. Even if it is your minor children's debt. Even if you doubt you will ever be sued. Even if you think insurance will pay it off. Even if it was "charged off' or "written off." Even if it is to a friend or family member. Even if you think the debt "might" have been paid by someone else. Even if the debt is merely a "potential" debt or lawsuit. For instance, if you were in a car accident and haven't been sued yet -- even if you had insurance -- you still need to list the names of the other drivers, all car owners, all passengers in all cars including yours and any insurance companies or attorneys involved. List everyone in sight so that all personal liability to you has the best shot of going away (unless you were drunk or on drugs, accident debts generally go away in a bankruptcy.)

You also need to list debts that were assigned to your ex-spouse from a previous marriage, since the original creditor can still come after you even though the debt was given to your ex. And, if any of the debts that you are discharging were once also your ex-spouse's debt or could in any way go back on your ex then we need to list your ex-spouse as a co-debtor.

It is an expensive and time-consuming process to add a debt after filing. So, list everything. If you fail to list a debt (such as to a friend or a family member) then that debt may not go away in the bankruptcy. Most people do not bother to list routine monthly utility bills if they are able to stay up to date with them. However, if you owe for previous months, it is a good idea to list them.

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I’ve lost track of who I owe. Any suggestions?

“Thanks very much for everything. you made this easier to get through with your kindness & understanding.” - K. & J. B.

In the way we do things at Gandy Law Offices we will want to obtain a copy of your individual credit reports early on. Although, it is not necessary to have this information for an initial consultation, it will be very helpful to have this information before we file. With your approval we will obtain a copy of your credit report for our files and make sure you are provided copies. We get the very best and most complete credit reports we can find, usually with information from all three of major credit reporting companies, currently Experian, Equifax, and Transunion, to increase your chances that no creditor will be left behind.

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What if I do not list a creditor on the bankruptcy papers?

You are required to list all creditors. If you intentionally omit a creditor from your schedules, it is perjury and you may lose your bankruptcy discharge. However, if a creditor is not known to exist at the time the schedules are filed, you may amend your schedules at any time the case is open to add an additional creditor.

How much does it cost for a Chapter 7 bankruptcy?

“Your service was great. An enormous weight has been lifted." -- R.F.

What we charge as a fee depends on how much and what kind of legal work that we need to provide for you in the process. We believe you will find our fees reasonable, and we give you time to pay them installments. You may find others who represent you for less money we suppose, but we truly believe that you will not find any firm that offers you a more professional, competent,and caring service got a fair price. After all, investing a modest amount to forever get rid of many thousands of dollars in debt is, we believe, worth getting done right. Our fee includes everything that needs to be done in an average straightforward bankruptcy, including the credit counseling and debtor education costs, filing fee and credit report costs. As part of that fee at Gandy Law Offices we only require a modest down payment or "retainer" fee which includes some perks you might not find at some other law offices. By paying the retainer fee, which is deducted from your total fee, you may no longer have to deal with those annoying creditor calls. After you take care of the retainer, you may choose to have our office handle some or all of them! (In more difficult or complicated cases, there may be an additional charge for handling the calls.) Imagine being able to hear your telephone ring and feel good that it probably isn’t a creditor demanding money, and if it is, you can tell them to call somewhere else. And,if they go too far, we may can sue them on your behalf. This is the peace of mind that Gandy Law Offices strives to give you.

For most folks the cost of getting a fresh start is two to three months worth of bill payments. The cost, both in money and stress, if you do nothing, at least for most folks who call us, will likely be much, much higher than any fee paid for your bankruptcy.

(Please note that some cases are not simple and involve much more time than the average uncontested bankruptcy. In that event we will discuss the situation with you and explain the necessary work involved, and the additional fees that may be necessary.)

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I'm broke and I don't have the entire fee. Can I pay in installments?

"I just want to thank you for all your kindness and help in this matter! You and your staff were so kind, considerate and helpful... You really made me feel at ease about the whole process." -- S.N.

Sure. In fact, most of our clients pay in installments. Very few folks who are in financial difficulty have a lot of cash just sitting around. That’s one reason that they are seeking bankruptcy relief. Fewer than a third of our clients pay their entire fee in one single payment. Most need to pay in a number of installments over a period of time. From the time that you pay the retainer fee, we give you three months to pay off the remainder of your balance. To keep your case moving, we do ask that your next installment payment be made within three weeks from when we start representing you.

The only way that we can afford to charge a standard fee is to make sure that we get paid with a minimum of our attention devoted to the fee collection process, thus all fees need to be paid before we actually file your paperwork. Most people stop paying their routine unsecured bills for a week or two to quickly accumulate the money necessary to pay for their fresh start bankruptcy, others are gifted the money from friends and family or they go out and get a temporary evening or weekend job. Many others simply pay us in installments each paycheck until the entire fee is paid and then we file. Whatever method works for you is fine. Keep in mind, however, that the quicker you pay off the fees, the quicker we can file the necessary paperwork and get you on your way to a fresh financial start.

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Is there anything else that I should know?

“No improvements were necessary in the handling of my case. Professional, yet caring.” - B.H.

Yes. If you’ve made the decision to seek bankruptcy relief and get a fresh start, then you may want to stop using, cut up, and throw away all your credit cards. Have a bonfire in the back yard, if you are into symbolism. Or, drop off or send us the pieces. We have a “Credit Card Graveyard” where we will toss them.

You should stop writing checks on your checking account for at least 10 days before the bankruptcy papers are filed because the bankruptcy trustee may demand that you pay over any money above a few hundred dollars that you had on deposit on the day we file your paperwork (even if you had checks written against the account that later cleared). Money orders and cashier’s checks are a perfect alternative to checks for the short period of time you need to do this.

You should plan to stop banking at any bank where you are filing on any debt to that bank (for instance, personal loans, overdraft protection, car or home loans, Visa or Mastercards originally obtained through that bank).

If you have complex or unusual finances, such as assets that may involve the “nonrecognition of capital gains” on real property (for instance the surrender of property with significant negative equity, such as a house) or other complex tax issues, you need to consult a tax professional about whether filing a bankruptcy will create a taxable capital gain or other taxable income event for you. The vast majority of our clients have no such unusual issues, but be sure to call us if you are giving back a house, land or other major asset.

You should not withhold any information from Gandy Law Offices. Lay it all out for us and let us devise a legal, ethical strategy to best deal with your situation. When in doubt, simply tell us the truth. We’re on your side.

You should not sell, transfer, buy or give away anything or repay any old debts or debts to friends or relatives without first checking with us. If anything changes about your finances before we file for you or shortly after, tell us immediately.

If you have any questions you should pick up the phone and call our office.

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Why choose the GANDY LAW OFFICES, P.C. team to represent me?

You may be deciding whether to have the GANDY LAW OFFICES, P.C. team represent you in getting a fresh start for you and your family by using the bankruptcy process. Please know that the GANDY LAW OFFICES team will work very hard to do an excellent job for you. Attorney Gandy and his staff strive to be both competent and caring. They are never judgmental of clients and truly understand the problems they are facing. They want to be of help. They have walked a mile in your shoes.

To give you some idea of why you would want to chose their team to work for you, you'll want to know that Attorney Gandy is profiled in Who's Who in American Law and admitted to practice before the Iowa Supreme Court and the United States Supreme Court. He has been licensed to practice in Iowa since 1987, and since 1991 his practice has been dedicated to representing consumers in straight bankruptcy under Chapter 7 and bill consolidation cases under Chapter 13 of the bankruptcy code. Attorney Gandy holds degrees from Harvard University and the University of Texas School of Law. He practices primarily in Debt and Bankruptcy Law from his central office in Fairfield, Iowa. To further demonstrate his commitment to this field and develop his competency in it, Attorney Gandy has become the first practicing attorney in Iowa to be Board Certified in Consumer Bankruptcy Law by the American Board of Certification. GANDY LAW OFFICES conducts its consumer bankruptcy law practice anywhere throughout Iowa by telephone, mail and in-office client contact.

GANDY LAW OFFICES knows you have a choice in deciding in who and how you will be represented in getting a fresh start, and we appreciate the trust and confidence you show by considering us. Ask yourself, "Is the firm you may be choosing lead by a Board Certified Bankruptcy Lawyer?"

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MORE THAN 20 YEARS EXPERIENCE


CLIENT TESTIMONIALS



"You guys rock" -- L.K.

"I'd stand on my head for you guys, but I'd look silly doing it." -- P.G.

"Now, I can sleep tonight" -- R.C.

"If you need the help, Gandy's the one to go to." -- P.G.

"Thanks again for helping us out. You all treated us like people, not criminals." -- G.G. & B.G

"You really go to bat for your clients." -- M.H.

"The knot in my stomach is gone." -- K.G.

"Freedom is amazing, we can answer the phone again and actually have money in the bank." -- K.

"I thought your service was excellent. I felt so badly about having to take bankruptcy and so nervous, but your staff helped me feel at ease and were so understanding and helpful. Thank you." -- P.B.

"You are wonderful people, very helpful & friendly! We have a new lease on life!!" -- S. & J. R.

"Excellent service, never felt uncomfortable with subject." -- R.R.

"This was a very hard decision for us, your office made it go smoothly & easy. Thank you." -- G.B.

"Everything was explained so that I understood which made me feel at ease with the staff. Thank you so much for the fresh start." -- A.S.

"Personnel was very courteous, helpful, cordial & looking out for my best interests. I would highly recommend GANDY LAW OFFICES to anyone" -- V.F.

"I was very pleased and relieved to have an honest and outstanding firm as yours. I have had a couple of bad experiences in the past - Thank you very much" -- R.H.

"I think you folks were great. I could hardly believe how easy and smooth it all went. Keep up the good work." -- D.S.

"Professional, yet caring." -- B.H.

"I wish everyone who was suffering financially like I was would find out how easy it is to get out of the mess they're in." -- Anonymous

"Thank you for your guidance and legal assistance. You did a very good job of keeping me informed." -- M.S.

"I was very pleased with Mr. Gandy and staff, and would recommend your law firm." -- C.S.

"Your service was great. An enormous weight has been lifted." -- R.F.

"... thanks for getting me through a very difficult time. I went to court much better prepared than others represented by other firms." -- S.J.

"Deciding to file bankruptcy was hard & I was embarrassed about it. But coming to your office and being treated with respect... it made the whole experience a lot easier, and more pleasant then I imagined it would be." -- Anonymous

"... You took our stress and made life better for us with a new beginning." -- P.H.

"I am glad I chose your firm." -- D.L.

"When I first came into your office, I was so down on myself and truly felt like a failure, but now I am really at peace with myself, and I have started a new life. I owe it all to you, Mr. Gandy, and your wonderful, caring staff." -- G.S.

"The service was wonderful." -- B.H.

"I just want to thank you for all your kindness and help in this matter! You and your staff were so kind, considerate and helpful... You really made me feel at ease about the whole process." -- S.N.

"You all rock!" -- K.

"I was VERY satisfied with your personnel and the way you guys handled everything for me." -- R.O.

"Keep up the good work and thank you very much." -- M.A.

"[You] made us feel like family... We weren't made to feel embarrassed about our decision." -- T.T.

And a very special story was shared to us by one of our valued clients:
"My true feelings about the Gandy Law firm:
I prayed for guidance how to get those bills paid. I was looking in the stand for something and the telephone directory fell out and opened to the yellow pages with the Gandy ad showing. After reading the ad I sat there wondering 'could they be the one's to help me?' My inner thoughts told me 'sure, give them a call and see what happens.'
Well, the rest is history... I'm so grateful to all of you. You people seemed concerned about my health, about me climbing those steps [to the office]. I want you to know since the burden has been lifted from me, my health has gotten better." -- H.B.




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Iowa Bankruptcy Attorney Gandy and his staff strive to be both competent and caring.
We are never judgmental of clients and truly understand the problems they are facing. We want to be of help. We have walked a mile in your shoes.

Iowa Bankruptcy Lawyer : Paul Gandy  Iowa Bankruptcy Attorney, Gandy Law Offices : Iowa Bankruptcy, Fairfield Iowa Bankruptcy Lawyer, Bankruptcy Attorneys
Attorney Gandy has been Board Certified in Consumer Bankruptcy Law since 1998
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You may be considering having GANDY LAW OFFICES, P.C. represent you in getting a fresh start for you and your family by using the bankruptcy process.
Please know that the GANDY LAW OFFICES team will work very hard to do an excellent job for you.

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GANDY LAW OFFICES, P.C. is a qualified law firm proudly designated as a federal debt relief agency by an Act of Congress and the President of the United States. Since 1991, we have been assisting families, individuals, and small businesses in obtaining financial relief, eliminating burdensome debt, and getting a fresh start under the US Bankruptcy Code. 11 USC § 528 (a) (4).|
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