Iowa Bankruptcy Exemptions

If you file for bankruptcy in Iowa, you can protect property using Iowa's bankruptcy exemptions.

Updated January 23, 2019

You don’t have to worry about losing everything when filing for bankruptcy in Iowa. Iowa’s bankruptcy exemptions allow a debtor to protect necessary property, such as a home, car, and retirement account.

Many people can keep all of their assets, but that isn’t always true. If you own things that you can’t protect with Iowa’s bankruptcy exemptions, the chapter you file will determine the fate of the nonexempt property.

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

Find out more about filing for bankruptcy by reading Which Type of Bankruptcy is Right for Me?

Iowa Exemptions v. Federal Bankruptcy Exemptions

Iowa, like every state, has a set of bankruptcy exemptions. Federal bankruptcy exemptions exist too. Some states allow residents to choose between the state and federal exemption schemes, but Iowa isn’t one of them. You can supplement Iowa’s exemptions with the federal nonbankruptcy exemptions, however.

To learn more about how bankruptcy exemptions work, which state exemption system you should use, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

Common Iowa Bankruptcy Exemptions

Here are a few things to keep in mind when reviewing Iowa exemptions:

  • Joint filing. Unless otherwise noted, when spouses file together in Iowa, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure you’re protecting your assets.
  • Legal citations. Legal references are to the Iowa Code or federal law.

Iowa Homestead Exemption

In Iowa, you can protect real property or an apartment of unlimited in value, as long as the property isn’t larger than one half of an acre in a city or town or 40 acres elsewhere. Spouses can’t double the property size. (499A.18 & 561.2 & 561.16.)

Iowa Motor Vehicle Exemption

A filer can exempt up to $7,000 in equity in a motor vehicle in Iowa. (627.6.)

Iowa Wildcard Exemption

A bankruptcy debtor can choose to protect any personal property, including cash, up to $1,000 in value. (627.6 (14).)

Other Iowa Exemptions

Personal Property

627.6 - Musical instruments, appliances, household furnishing, clothing and its storage containers as well as other personal property up to $7,000; books, pictures, paintings, portraits, and Bibles up to $1,000 total; burial plot up to 1 acre; jewelry up to $2,000; health aids; wedding and engagement rings, if purchased after marriage or within the last 2 years there is a limit of $7,000 (minus any amounts used under the general jewelry exemption); rifle or musket; shotgun; residential utility or security deposits up to $500 or advance of rent; wrongful death proceeds need for support.

Wages

627.6 (10) – Accrued wages and tax refunds up to $1,000.

642.21 - The greater of 75% of disposable earnings or 40 times the federal minimum wage. Iowa has an alternate wage determination formula, as well--consult with a local attorney.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing, and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,283,025.

97A.12 - Peace officers.

97B.39 - Public employees.

410.11 - Disabled firefighters and police officers, but only for benefits being received.

411.13 - Police officers and firefighters.

627.6 - Other pensions, annuities, and contracts are fully exempt; however, contributions that were made within the year before filing for bankruptcy are not exempt; retirement plans, Roth IRAs, IRAs, ERISA-qualified benefits, and Keoghs.

627.8 - Federal government pension.

Public Benefits

239B.6 - Aid to dependent children.

627.6 - Unemployment compensation, Veterans' benefits, Social Security, and any public assistance benefit, including earned income tax credit and child tax credit (In re Hatch, 13-03342-als7 (Bankr.N.D.Iowa 2014); In re Longstreet, 246 B.R. 611 (Bankr. S.D. Iowa 2000).

627.13 - Workers' compensation.

627.19 - Adopted child assistance.

Tools of Trade

627.6 - Nonfarming equipment up to $10,000; farming equipment, including livestock and feed, up to $10,000; National Guard articles of equipment.

Alimony and Child Support

627.6 - Alimony and child support needed for support.

Insurance

508.32 - Life insurance proceeds if policy prohibits use to pay creditors.

509.12 - Employee group insurance policy or proceeds.

512B.18 - Fraternal benefit society benefit.

627.6 - Life insurance proceeds (limited to $10,000 if acquired within 2 years prior to filing for bankruptcy) paid to spouse, child or other dependent; accident, disability, health, illness, or life proceeds; illness or disability benefits; upon death of insured, up to $15,000 of all matured accident, health, disability and life insurance policies that were exempt from beneficiary's debts contracted before the insured's death.

Other

123.38 - Liquor licenses.

Add any applicable Federal Nonbankruptcy Exemptions.

Confirming Exemptions

This list includes the majority of bankruptcy exemptions available in Iowa. However, it may not include all exemptions, and states often create exceptions to specific exemptions. Also, Iowa might have changed the amounts since this list was last updated.

Talk to a Lawyer

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
NEED PROFESSIONAL HELP ?

Talk to an attorney.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you