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.
Find out more about filing for bankruptcy by reading Which Type of Bankruptcy is Right for Me?
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?
Here are a few things to keep in mind when reviewing Iowa exemptions:
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.)
A filer can exempt up to $7,000 in equity in a motor vehicle in Iowa. (627.6.)
A bankruptcy debtor can choose to protect any personal property, including cash, up to $1,000 in value. (627.6 (14).)
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.
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.
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.
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.
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.
123.38 - Liquor licenses.
Add any applicable Federal Nonbankruptcy 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.