Kaeding Law Office, PLC Kaeding Law Office, PLC 2026-04-02T21:47:12Z https://www.kaedinglawoffice.com/feed/atom/ WordPress /wp-content/uploads/sites/1103980/2020/12/cropped-Fav-icon-32x32.png On Behalf of Kaeding Law Office, PLC <![CDATA[What happens if your spouse files for bankruptcy during a divorce proceeding in Iowa?]]> https://www.kaedinglawoffice.com/?p=47295 2026-04-02T21:47:12Z 2026-04-02T21:47:12Z A divorce proceeding is considered one of life’s most stressful events. Yet, things can become even more stressful if your spouse files for bankruptcy while the divorce is ongoing. In Iowa, bankruptcy can change how debts and property are handled, but it does not stop the divorce itself. Knowing how these processes interact can help you plan your next steps and protect your financial interests.

How does a federal bankruptcy filing affect a divorce proceeding in state court?

A bankruptcy filing is governed by federal law while a divorce action is governed under state law.  When a spouse files for bankruptcy, a federal court order called an “Automatic Stay” temporarily pauses certain financial actions. This stay can delay dividing property or assigning responsibility for shared debts. Even so, the divorce can still move forward on other issues.  Decisions about child custody and support continue, and obligations like child support or spousal support remain enforceable. Because bankruptcy changes the timing and handling of some financial matters, consulting a lawyer can help you understand which parts of your divorce may move forward and which may be held up until the bankruptcy court weighs in. This guidance can reduce confusion and help you plan strategically.

Sorting debts and property

Seeing how debts and property affect your situation can make a big difference in your divorce outcomes. Several factors are worth considering:
  • Bankruptcy does not cancel your spouse’s responsibility to pay child support or alimony.
  • Creditors can still hold you responsible for joint debts even if your spouse’s personal liability is removed.
  • The bankruptcy estate can include marital property, which affects how the court divides assets.
  • Creditors can sell or use non-exempt assets to recover repayment.
  • The bankruptcy proceeding may delay enforcing a stipulation or agreement between the parties about a  property settlement in the divorce action until a final order is filed in the bankruptcy court.
Being aware of these issues helps you to understand which parts of your financial life may change and which remain under your control. Legal assistance may provide guidance on filing claims or requesting relief in bankruptcy court to protect your share of marital property.

Planning for what comes next

Even amid bankruptcy and divorce, the financial landscape is not entirely unpredictable. Tracking how debts, property and support interact can reveal opportunities to protect your share and make informed choices. Facing these challenges with a clear picture of your options can turn uncertainty into a roadmap for stability.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[How Are Credit Union Loans Impacted By Filing for Bankruptcy?]]> https://www.kaedinglawoffice.com/?p=47287 2026-01-10T07:40:51Z 2026-01-12T07:22:32Z Bankruptcy is a major step that someone can take if they’re facing more debts than they can handle. This decision can impact just about every aspect of a person’s life, including loans they have through their credit union. For individuals who are considering bankruptcy, understanding how credit unions handle debts and the way they differ from traditional loans may help to reduce surprises during the process. One of the primary differences is that credit unions use lending practices that can affect more than one account at once, which makes how they’re treated in bankruptcy unique. 

What is cross-collateralization?

Unlike other lenders, credit unions typically require a membership and may link several of their financial products together. This means that auto loans, personal loans and savings accounts may all be linked, which means that bankruptcy can affect all of those.  When a credit union uses one single asset, such as a vehicle, to secure more than one loan within the person’s financial profile, it is known as cross-collateralization. This isn’t always clear. It’s possible that the credit union agreement may tie together seemingly unrelated accounts without any warning to the individual.  Cross-collateralization can limit flexibility in bankruptcy. Even if one loan balance is paid or is eligible for discharge, the credit union may still have a lien on the collateral until all debts related to that collateral are resolved. This point alone can make it harder to retain property without taking care of the full balance.  There is also a chance that the credit union may exercise setoff rights. This means that it can apply funds that are in checking or savings accounts to pay for outstanding loan balances. The ability to do this is based on account agreements and the timing of the bankruptcy filing.  Determining how to handle these bankruptcy filings may benefit from the assistance of a bankruptcy lawyer. This individual can help you learn about your rights, responsibilities and how the filing may affect your credit union loan accounts.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[What Should You Do If a Creditor Sues You?]]> https://www.kaedinglawoffice.com/?p=47288 2026-01-10T07:04:54Z 2026-01-10T07:04:54Z Having outstanding debts can lead to financial stress, especially when there simply isn’t enough money to make the payments. While many creditors are patient and allow things like payment plans, others are in a rush to get their money. Ultimately, some creditors may opt to file a lawsuit against you in an attempt to get the money they’re owed.  Being sued by a creditor can be an alarming realization, especially if you aren’t familiar with what will happen. In Iowa, a creditor lawsuit usually begins with formal court papers stating the amount allegedly owed and the reason for the claim. This document contains a host of information that’s important, including deadlines that can impact your options. 

What happens with the lawsuit process?

Most creditor lawsuits follow the same pattern, which starts when the creditor files the lawsuit with the court. Once that occurs, you will be served with the Petition and given a limited time to file an Answer. It is imperative that you timely respond otherwise the court may issue a default judgment. This then enables the creditor to pursue collection remedies.  Once an Answer is filed, the case enters the discovery phase prior to the trial date. In some cases, you and the creditor may be able to reach an agreement before reaching trial. If that doesn’t happen, the court will decide the outcome. The court will issue a judgment, which can result in wage garnishment, bank account levies or liens against property.  Not all creditor lawsuits end in a judgment being issued, so it’s critical that you learn your options for addressing the lawsuit. In some cases, filing bankruptcy may be beneficial, and you should seek the assistance of a bankruptcy lawyer. A bankruptcy filing will result in the issuance of an Automatic Stay, which can help to provide protection from creditors, particularly if the creditor is harassing you.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[Bankruptcy options every small business owner should know]]> https://www.kaedinglawoffice.com/?p=47281 2025-09-26T18:52:53Z 2025-10-02T17:20:01Z Learn why bankruptcy may be necessary If your Iowa business owes more than it can pay, bankruptcy may be necessary. It can stop collections, reduce pressure from creditors and give you a clear plan to manage or lower your debt. Addressing financial problems early preserves more options for recovery and can provide peace of mind.

Discover the key differences between Chapter 7 and Chapter 11

Chapter 7 bankruptcy lets you sell business assets to pay creditors. This works best if you cannot continue operations. Chapter 11 provides a way to reorganize finances while keeping the business running. You create a plan to repay creditors over time. Understanding these differences helps you select the bankruptcy option that best aligns with your goals.

See how Chapter 13 can apply to small business owners

While Chapter 13 is designed for individuals, sole proprietors can use it to manage business debts. It allows you to restructure personal and business debts into a manageable repayment plan. You can keep essential assets while paying creditors over a set period. Sole proprietors with both personal and business debt may find Chapter 13 the best solution.

Evaluate key factors before choosing a bankruptcy option

Before selecting a bankruptcy option, it is important to carefully consider several factors that can affect your business and personal finances. Take time to review these factors before deciding which bankruptcy path fits your situation:
  • Business operations: Can you continue running your business during bankruptcy?
  • Total debt owed: What is the full amount of personal and business debt?
  • Impact on credit: How will each option affect your credit score?
  • Long-term goals: Which choice aligns with your plans for the future?
  • Legal and financial consequences: What are the implications of each bankruptcy type?
Reviewing these factors helps you choose the option that best fits your financial situation.

Protect your business future with the right bankruptcy option

Choosing the right bankruptcy path gives you a clear way to manage debt and protect your long-term goals. Knowing how Chapter 7, Chapter 11 and Chapter 13 work in Iowa helps you take control and reduce uncertainty. Each business has unique circumstances. It is important to work with an attorney who can guide you through the bankruptcy process and help you make informed decisions, no matter which court handles your case. Acting now lets you move forward with confidence and focus on recovery.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[What bankruptcy options are available for sole proprietorships?]]> https://www.kaedinglawoffice.com/?p=47270 2025-03-25T00:52:28Z 2025-03-25T00:52:28Z Can sole proprietors seek financial relief through bankruptcy? Sole proprietors have several bankruptcy options, each tailored to different financial situations. The two main options include:
  1. Chapter 7 (Liquidation Bankruptcy): This is the most straightforward bankruptcy option, allowing for the discharge of many types of debts. It involves liquidating certain assets to repay creditors.
  2. Chapter 13 (Reorganization Bankruptcy): This option enables the debtor to keep their assets while reorganizing debts into a manageable repayment plan, typically spanning three to five years and potentially keeping the business operational.
The right option depends on various factors, including the sole proprietor’s financial goals, the nature of their debts, and their ability to repay creditors over time. Understanding the key features of each option can guide this decision. Before deciding on a bankruptcy filing, sole proprietors should also consider the long-term effects on their credit and personal assets. They must also evaluate their ability to meet the requirements of the chosen bankruptcy chapter, such as passing the means test for a Chapter 7 bankruptcy and the repayment commitments under Chapter 13. For sole proprietors struggling with debt, bankruptcy can provide a structured path to regain financial stability. Whether through liquidation or reorganization, the available options accommodate the unique aspects of personal and business financial integration. With careful planning, bankruptcy can offer a fresh start and enable sole proprietors to rebuild and move forward with their financial future.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[Am I going to lose everything if I file for bankruptcy in Iowa?]]> https://www.kaedinglawoffice.com/?p=47252 2025-01-27T20:50:08Z 2025-02-02T07:06:00Z bankruptcy. Examples of these include:
  • HOMESTEAD: The equity in your house is exempt (to a certain extent). For instance, if you own a home that is worth $300,000 and you have a mortgage against your house for $200,000, then you have $100,000 in equity in your home. Depending on how long you have resided there and when the majority of your unsecured debt was incurred determines the extent of your exemption. That is why it is imperative to retain a qualified attorney to provide you with the legal advice that you need to save your home in a bankruptcy proceeding.
  • AUTOMOBILE: The equity in your car (which is the difference between the amount that you owe on it and its fair market value) is exempt. For instance, if your car is worth $7,000 or less (or if you have $7,000 or less of equity in a financed car), then your vehicle is exempt.
There are many more exemptions in Iowa, including personal property, retirement accounts, wild card, etc. In order to determine whether or not your assets fall into an exemption, it is necessary to obtain legal advice from a qualified bankruptcy attorney. Sometimes a person who qualifies for a Chapter 7 bankruptcy may choose to file a Chapter 13 bankruptcy in order to retain certain assets that they would otherwise be at risk of losing in a Chapter 7. In reality, most people that file for bankruptcy have very few, if any, non-exempt assets. Those that do have assets that they want to protect can do so in a Chapter 13 bankruptcy. You will not know until you sit down with a bankruptcy attorney who can explain this to you in detail and assess your personal circumstances. Do not rely on a Google or AI search – I have seen too many pro se debtors lose assets that they otherwise wouldn’t have if they had listed their personal property properly and claimed the correct exemption that they were entitled to under law.  ]]> On Behalf of Kaeding Law Office, PLC <![CDATA[If I am married, does my spouse have to file bankruptcy too?]]> https://www.kaedinglawoffice.com/?p=47254 2025-01-27T20:04:33Z 2025-01-27T17:05:57Z bankruptcy or not, including:
  1. Are there debts that are in both spouse’s names? If so, if one person files and the other doesn’t, then the non-filing spouse will be ultimately responsible for paying the debt.  If all the debts are just in one spouse’s name, then there will be little consequence to the non-filing spouse.
  2. If one spouse has a vehicle only in his/her name and there is a lot of equity in the vehicle (more than $7,000), then it may be wise for only the other spouse to file. The non-filing spouse who owns the vehicle with the equity will not be at risk of losing their vehicle (or having to “buy back” their interest in the vehicle from the Trustee).
  3. If both spouses have significant debts that they hold jointly, then it may be wise for them to file jointly so that they both get a fresh start. The cost for filing a joint petition is the same as for a single filer with my office (there may be other attorneys or law firms that charge extra for a joint filing). A couple filing jointly will only have to pay for one filing fee (to date, the filing fee for a Chapter 7 is $338).
Either way, both spouse’s income comes into play even if only one spouse files bankruptcy. If the married couple resides in the same household, then the non-filing spouse’s income and expenses come into play. In other words, if the spouse who files for bankruptcy would qualify for a Chapter 7 based only on his or her income, he or she may be ineligible to file a Chapter 7 if the non-filing spouse’s income pushes them above the income limit. However, there is no way to make this determination without computing a full 6-month analysis of both spouse’s previous income (including the amounts deducted for taxes and other qualified deductions).  There have been many, many times over the years that I have had other attorneys send me clients for a Chapter 13 bankruptcy because they believe that their clients qualify for a Chapter 7 bankruptcy based on the income limits. They may be “above-median debtors” on paper (this means that they earn more income than the median family income for their household), but I am able to get them back in a Chapter 7 after computing the means test analysis.]]> On Behalf of Kaeding Law Office, PLC <![CDATA[How does the Iowa ‘means test’ work in Chapter 7 bankruptcy?]]> https://www.kaedinglawoffice.com/?p=47250 2024-12-03T18:40:22Z 2024-12-03T18:40:22Z Eligibility rules for Chapter 7 Before filing for Chapter 7 – also called liquidation bankruptcy -  you must meet several requirements, including:
  • Credit counseling: Complete a credit counseling course from an approved agency within 180 days before filing.
  • Income limits: Your monthly income over the past six months must be below your state's median for a similar-sized household, or you must pass the means test.
  • No recent bankruptcies: You are not eligible if you’ve filed for Chapter 7 in the last eight years or Chapter 13 in the past six years.
  • No fraud: A bankruptcy judge can dismiss your case if they believe you're attempting to defraud creditors.
Meeting these criteria is essential for your Chapter 7 filing to proceed. If you don't qualify, Chapter 13 might be an alternative.

Debts that can be dismissed

In a Chapter 7 bankruptcy, not all debts can be discharged, but many unsecured debts can be. Those typically included are:
  • Credit card debt
  • Unsecured personal loans
  • Medical bills
  • Payday loans
However, some debts generally cannot be discharged, including:
  • Child support and alimony
  • Certain tax debts
  • Student loans (with rare exceptions)
  • Court fees and fines
  • Debts from personal injury caused by intoxicated driving
Understanding which debts can and cannot be discharged is crucial in deciding whether Chapter 7 bankruptcy is right for you.

Property exempt from Chapter 7

The means test applies to individuals with primarily consumer debts. Its purpose is to assess whether you have enough disposable income to repay a portion of your debts. If not, you might qualify for Chapter 7. Under the process, certain Items may be exempt from liquidation, including:
  • Personal property: Up to $7,000 in clothing, furniture and household goods
  • Jewelry: Up to $2,000, excluding wedding and engagement rings
  • Motor vehicle: Up to $7,000 in equity or $14,000 for a married couple filing jointly
  • Tools of the trade: Up to $10,000 for farming equipment and tools
  • Retirement accounts: Tax-exempt accounts like 401(k)s
  • Public assistance: Social Security and other benefits
The bankruptcy process can be complex. Consulting a skilled bankruptcy attorney can provide valuable guidance, help you understand your exemptions and ensure your path to financial independence.  ]]> On Behalf of Kaeding Law Office, PLC <![CDATA[Why Filing For Bankruptcy May Be The Best New Year’s Resolution That You Can Make]]> https://www.kaedinglawoffice.com/?p=46738 2024-09-30T20:33:40Z 2022-01-05T16:30:41Z your sense of peace and serenity restored and to enjoy your life again.]]> by Kristina Kaeding <![CDATA[Will I lose my house if I file for bankruptcy?]]> https://www.kaedinglawoffice.com/?p=46633 2021-12-17T13:13:25Z 2021-03-30T15:28:05Z