Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Iowa. However, Iowa state laws play an important part, especially in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Iowa Credit Counseling
Before you file for Chapter 7 or Chapter 13 bankruptcy in Iowa, you will have to get credit counseling from an agency approved by the United States Trustee’s Office. Here’s a list of Iowa agencies that have been approved to provide this counseling.
Where to File
There are two bankruptcy districts in Iowa. You can find local rules, forms, and information on bankruptcy filings at the district bankruptcy court websites.
- The Northern District (which includes Cedar Rapids and Sioux City)
- The Southern District (which includes Des Moines)
Iowa Property Exemptions
Like every other state, Iowa has a set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Some states let bankruptcy filers choose between the state’s list of exemptions and a list of federal exemptions, but Iowa isn’t among them.
Iowa has an unlimited homestead exemption: Filers may exempt all equity in their home, as long as it doesn’t exceed half an acre of property in a city or town or 40 acres elsewhere. Iowa also allows debtors to exempt up to $7,000 equity in a vehicle, as well as $2,000 worth of jewelry. Here is a detailed list of Iowa property exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Iowa. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median income for a one-person Iowa household is just over $40,500; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
Iowa Debtor Education
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here are the Iowa agencies that are currently approved to provide this counseling.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Iowa bankruptcy lawyer.