Every day I wake to new, more dire headlines about the state of the economy and the struggles of millions of Americans, including Iowans. Just today I read the following headlines about what people are facing: Record Number of Subprime Borrowers Miss Car Loan Payments in October, Subprime Auto Loan Delinquency Is Only Getting Worse; Late Car Payments Hit Record Among Subprime Borrowers; Why Buyers are Upside Down on Car Loans; New Foreclosures Jump 20% in October, A Sign ofRead more
File Chapter 13 Bankruptcy to Avoid Foreclosure
Along with all other consumer loans and debt, widespread delinquency rates on mortgage loans are increasing rapidly. When homeowners fall behind on mortgage payments, the risk of foreclosure increases significantly. Several factors can contribute to this, including job loss, medical emergencies, rising living costs, or unexpected expenses. When a borrower misses one or more mortgage payments, the loan becomes delinquent, and if the delinquency persists, the lender may begin foreclosure proceedings to recover the property. Economic downturns, high interest rates,Read more
What To Expect At A “341” Trustee Hearing
At a bankruptcy Section 341 meeting of creditors—commonly called the “341 hearing”—a bankruptcy debtor is required to appear and answer questions under oath. Although no judge is present, the bankruptcy trustee assigned to the case conducts the hearing, and creditors are allowed to attend and ask questions, although it’s very rare that creditors participate. The purpose of the meeting/hearing is to confirm the accuracy of the bankruptcy paperwork, ensure the debtor’s honesty, and determine whether there are assets available forRead more
Don’t Use Home Equity to Repay Debts
A Home Equity Line of Credit (HELOC) is a type of loan that allows a homeowner to borrow against the equity they have built up in their home. Equity is the difference between the current value of the home and the amount owed on the first mortgage. With a HELOC, a lender provides a revolving line of credit, much like a credit card, secured by the home itself. In other words, it becomes a second mortgage against the home. HomeownersRead more
File Bankruptcy to Respond to Medicaid Cuts
President Trump and Congressional Republicans have forced drastic cuts to Medicaid and other social programs that helped people pay for needed medical care, food and energy. The cuts to Medicaid will almost certainly increase the number of people who are forced to file for bankruptcy due to the financial strain caused by unaffordable medical expenses. Medicaid is the primary source of health coverage for millions of low-income individuals, children, people with disabilities, and the elderly. When funding is reduced, statesRead more
Supreme Court Decision Helps Chapter 13 Debtors
On June 23, 2025, the U.S. Supreme Court declined to hear an appeal in the case of Bronitsky v. Saldana, effectively upholding a Ninth Circuit Court of Appeals decision that allows Chapter 13 bankruptcy debtors to continue making voluntary retirement contributions during their repayment plans. The Supreme Court’s decision to not take the case is an important victory for consumer debtors. The case focused on whether retirement contributions qualify as “disposable income” under 11 U.S.C. § 541(b)(7), which would requireRead more
Stop Using Retirement Funds to Pay Debt
People facing debt collection are often tempted to dip into retirement funds to pay debts. While this has never been a good idea, using up retirement funds to pay debt is increasingly risky with the recent projection that the Social Security trust fund will be depleted by the year 2034. Beginning in 2034 it’s now expected that Social Security recipients will have their benefits cut by nearly 20%. The outlook for Medicare is equally dismal, with benefits projected to beRead more
Bankruptcy Filings Predicted to Surge in 2025
Bankruptcy inquiries are surging to their highest level since early 2020, signaling a potential wave of filings in 2025. Record consumer debt and new tariffs could push financially strained households past their breaking point. Trump’s tariffs, especially on Chinese goods and other imports (like steel and aluminum), have raised costs for American businesses that rely on those materials and components. Many companies have passed those costs onto consumers in the form of higher prices, contributing to inflation. These tariffs haveRead more
Bankruptcy Can Discharge Social Security Overpayments
In a significant victory for Social Security recipients, the Ninth Circuit Court of Appeals has ruled in Cooper v. Social Security Administration, reinforcing the vital protections that bankruptcy provides for individuals who have been overpaid Social Security benefits. The court held that the Social Security Administration (SSA) cannot bypass bankruptcy discharge protections to recover overpaid benefits from individuals who have not engaged in any wrongdoing. The ruling confirms that the SSA’s practice of withholding 100% of a recipient’s current benefit paymentsRead more
Trump’s Politics Could Lead to More Bankruptcies
One of the many harmful actions the Trump Administration has taken is the shuttering of the Consumer Financial Protection Bureau (CFPB). This shortsighted move could have serious consequences for consumers, potentially leading to more individuals needing to file for bankruptcy. Here’s how: Increased Predatory Lending and Deceptive Practices The CFPB plays a key role in regulating payday lenders, mortgage servicers, credit card companies, and other financial institutions. Without the CFPB’s oversight, predatory lenders could engage in deceptive or abusive practices,Read more
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