In Linn County, Iowa, bankruptcy is a court procedure in which a person or business has some or all of their debts excused (or "discharged"), theoretically allowing them to start with a clean slate, and move on with their lives no longer drowning in debt (and hopefully having learned to better manage their use of credit in the process). Bankruptcy should be treated as an option of last resort, and should not be viewed as a convenient way to get out of debt that you just don't feel like paying. Bankruptcy can have severe consequences, including but not limited to damage to your credit rating. A bad credit score can impact your ability to get loans in the future, to rent an apartment, and possibly even your ability to get hired at some jobs (as some employers now run credit checks on prospective employees).

Therefore, it is a good idea to talk with an experienced bankruptcy lawyer in Linn County, Iowa. They will be able to advise you on the likely legal and financial consequences of filing for bankruptcy, and help you determine if it's the right option for your. Because this determination depends heavily on the facts of each individual case, the counsel of a Linn County bankruptcy attorney cannot be replaced.

Types of Bankruptcy in Linn County, Iowa

There are 3 bankruptcy schemes that are largely used in Linn County: Chapter 7, Chapter 13, and Chapter 11 bankruptcy. Bankruptcy is governed by federal law, so the procedures in Linn County, Iowa are very similar to what they will be anywhere else in the United States. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her assets in order to pay off as much debt as possible. Once the sale of the assets is verified, and the proceeds handed over to the creditors, the debt is perceived as discharged. Liquidation is basically selling assets to the highest bidder. Not all of the debtor's assets will need to be sold, and many types of property are totally or partially exempt, including homes, cars, retirement accounts, and insurance policies. This means that the debtor can keep them. It should be noted that some types of debts are not dischargeable in Chapter 7 bankruptcy, including student loans, criminal fines, taxes, and child support payments. Even when the bankruptcy process is complete, these debts will have to be paid in full.

The other largely used bankruptcy system in Linn County is Chapter 13 bankruptcy. This allows a debtor to repay most or all of their debts in a structured manner. It reorganizes the debt into lower periodic payments that, with a bit of frugality, the debtor should find manageable. This allows the debtor to continue to earn a living, and allows the creditors to eventually collect what they are owed. Once a repayment plan is authorized by the bankruptcy court, creditors are legally barred from seeking repayment under the terms of the agreements that gave rise to the debt in the first place, and will instead have to accept payment under the new plan. Chapter 13 bankruptcy is usually a better option for people who have a steady income. Though Chapter 11 bankruptcy can be used by individuals, it is almost always used by businesses. Similar to Chapter 13, Chapter 11 involves restructuring of debts, rather than complete discharge. The debtor is required to come up with a restructuring plan that lays out how it plans to cut costs, streamline operations, and pay its debts. The plan must then be authorized by a vote of participating creditors.

During the Chapter 11 process, a business can usually continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.

How Can a Linn County Bankruptcy Lawyer Help?

The need to weigh all the options and consider the costs and benefits of applying for bankruptcy in Linn County cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Linn County bankruptcy attorney beforehand.