If your income is too high, given the size of your family, to file a Chapter 7, (that is, if you don't pass the "means test") but you still need help paying your creditors and keeping them at bay, a Chapter 13 bankruptcy can allow you to repay your debts over a 36 to 60 month period of time without interest or penalties added on.
Filing a Chapter 13 bankruptcy can stop a foreclosure lawsuit and cancel a Sheriff sale of your foreclosed home. The Chapter 13 plan will then allow you to pay the delinquent mortgage payments over a 60 month repayment plan and would also require the mortgage company to again begin accepting your regular monthly payments as well. According to foreclosure laws in Iowa, we cannot change the loan terms or force a loan modification, however, we can require that your mortgage company accept your regular monthly mortgage payment and accept an additional payment each month (paid through the Chapter 13 Trustee Office) to pay off those payments which are delinquent as of the date of filing over a 60 month payment plan. The filing of the Iowa Chapter 13 bankruptcy will stop any Iowa foreclosure action and allow you to make house payments again.
If older income taxes are dischargeable in a Chapter 7 bankruptcy, and you qualify for same, then filing a Chapter 7 bankruptcy would be your best option. If your income tax obligations cannot be discharged in a Chapter 7, or if you owe nondischargeable sales taxes or withholding taxes, you can file a Chapter 13 bankruptcy to pay that tax debt off over a 60 month repayment plan and not be required to pay any additional interest or penalties. The IRS cannot garnish your wages or bank accounts while you are in a Chapter 13 repayment plan. The filing of an Iowa Chapter 13 bankruptcy will stop all IRS garnishments and levies and allow you to pay the taxes over time.
Filing a Chapter 13 bankruptcy can stop a car repossession and possibly pay over time what the car is worth, rather then the total loan balance. Unlike a home loan, in a Chapter 13 in some cases it is possible to modify a car loan and pay to the lender over time only what the car is worth rather then the total loan amount if that amount is substantially greater then the value of the car. Certain rules apply to accomplish this "cram down" and you should consult an experienced Iowa bankruptcy lawyer to pursue this option. In every case, a Chapter 13 filing will stop repossessions and allow you to pay the car loan, and any delinquent payments due, over a 36 to 60 month repayment plan at a very low interest rate. This may substantially reduce your monthly car payment amount.
Other reasons to file a Chapter 13 bankruptcy include: (these opportunities are available in some cases and require the analysis of an experienced Iowa bankruptcy lawyer to determine if any are available for you).
Strip off underwater second and third mortgages.
Discharge property settlements ordered in a Divorce Decree.
Repay student loans or delinquent child support over time at a rate you can afford.
Protect nonexempt property you would otherwise lose in a Chapter 7.
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