Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Since it's a product of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Iowa will be the same as anywhere else in the country. Distinct courts in Manchester, Iowa will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Manchester, Iowa
In Manchester, Iowa, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Manchester, Iowa is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Manchester, Iowa
Chapter 13 bankruptcy in Manchester, Iowa is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 Bankruptcy involves a court setting up a modified payment plan, which allows the debtor to pay off most or all of his debts over an extended period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Manchester, Iowa
This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, it would be a good idea to consult a local bankruptcy attorney in Manchester, Iowa. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).