Iowa Bankruptcy Guide

Chapter III - The Iowa Bankruptcy Petition

In a typical (non-bankruptcy) legal case, the plaintiff files a petition, the defendant files an answer and it’s off to the races. There is discovery, perhaps some pre-trial motions, and in some cases a trial. Many more pleadings are often filed by each party and a Judge will often decide how the case will turn out.

Bankruptcy is unique. There is no answer and normally the Judge knows nothing about your case individually other than perhaps that you are reaffirming (keeping) your home or car, since the Judge approves reaffirmations. In a bankruptcy case, unless a creditor, the United States Trustee or someone else files an objection to discharge or the Court dismisses your case based on failure to cooperate; your case will normally flow through to discharge.

So the petition is by far the most important document in your bankruptcy case. Debtors most often get themselves in trouble in bankruptcy by making mistakes on their petition such as:

Common Petition Mistakes:

*Failing to list (schedule) all assets

In some instances the debtor (that’s you) thinks the asset will be lost if they file bankruptcy, so they don’t even tell their attorney about it. However, if they had simply told their attorney about it, in many cases it would have been exempt anyway. But you cannot keep property that you did not both schedule and exempt, so some debtors create problems where they should not otherwise be. Not to mention that there are criminal penalties including jail time available for bankruptcy fraud.

*Failing to schedule all debt

Creditors have a right to be notified of the bankruptcy, so debt that is not scheduled may not be discharged.

*Failing to properly exempt all property (can result in loss of property)

*Clerical errors like incorrect name spelling or social security # or old address

*Failing to schedule all claims against others including work injury, accident claims etc.

Most workers compensation claims are not affected by bankruptcy, but if the debtor does not list the claim then it cannot be exempted.

*Failing to schedule small business assets, debts or accounts receivable.

Under the new bankruptcy law you must also file more detailed information on your income and expenses including a means test calculation if your income exceeds the state median income for your household size. See www.desmoinesbankruptcy.com for current information on new bankruptcy law requirements.