Iowa Bankruptcy Exemptions

The Iowa bankruptcy exemptions chart, see below, details the property you can exempt or protect from creditors when you file bankruptcy in Iowa. You may exempt any property that falls into one of the exemptions categories below, up to the dollar amount listed. You will be able to kept this exempted property after you file bankruptcy. Please note that there are certain debts which you will not be able to erase in bankruptcy. (see Non-dischargeable Debts)

An exemption limit applies to any equity you have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $5000 with a loan of $4500 has an equity value of only $500.

If the property is secured by a loan, such as a car or home, and you are current on the payments and the equity is covered by your exemptions, you may elect to keep making payments on the loan and keep this property through the bankruptcy. If all the equity is not covered by your exemptions the trustee may elect to liquidate this asset and distribute the proceeds. Generally, in this case, you would be entitled to the value of your exemption in the asset as a cash payment.

Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.

To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.

When you file bankruptcy in Iowa you may also use certain federal exemptions in addition to your Iowa exemptions.

 

ASSET

EXEMPTION DESCRIPTION

LAW SECTION

HOMESTEAD

Real property or an apartment to an unlimited value; property cannot exceed acre in town or city, 40 acres elsewhere

499A.18, 561.2, 561.16

 

May record homestead declaration

561.4

INSURANCE

Accident, disability, health, illness or life proceeds or avails to $15,000, paid to surviving spouse, child or other dependent

627.6(6)

 

Employee group insurance policy or proceeds

50-.12

 

Life insurance proceeds to $10,000, acquired within 2 years of filing for bankruptcy, paid to spouse, child or other dependent

627.6(6)

 

Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors

508-32

MISC.

Alimony, child support needed for support

627-6(8)(d)

 

Liquor licenses

123.38

 

Property of business partnership

544.25

PENSIONS

also see wages

Disabled firefighters, police officers (only payments being received)

410.11

 

Federal government pension (only payments being received)

627.8

 

Firefighters

411.13

 

Peace officers

97A.12

 

Police officers

411.13

 

Public employees

97B.39

 

Other pensions needed for support (only payments being received)

627.6(8)(e)

PERSONAL PROPERTY

Appliances, furnishings and household goods to $2,000 total

627.6(5)

 

Bibles, books, portraits, pictures and paintings to $1,000 total

627.6(3)

 

Burial plot to 1 acre

627.6(4)

 

Clothing to $1,000 plus receptacles to hold clothing

627.6(1)

 

Health aids

627.6(7)

 

Motor vehicle, musical instruments and tax refund to $5,000 total, no more than $1,000 from tax refund

627.6(9)

 

Rifle, musket; shotgun

627.6(2)

 

Wedding or engagement rings

627.6(1)

PUBLIC BENEFITS

Adopted child assistance

627.19

 

AFDC

627.6(8)(a)

 

Local public assistance

627.6(8)(a)

 

Social security

627.6(8)(a)

 

Unemployment compensation

627.6(8)(a)

 

Veterans' benefits

627.6(8)(b)

 

Workers' compensation

627.13

TOOLS OF TRADE

Farming equipment; includes livestock, feed to $10,000 (can't include car, In re Van Pelt, 83 B.R. 617 (S.D.IOWA 1987) )

627.6(11)

 

Non-farming equipment to $10,000 (can't include car, In re Van Pelt, 83 B.R. 617 (S.D. Iowa 1987) )

627.6(10)

WAGES

Minimum 75% of earned but unpaid wages, pension payments; bankruptcy judge may authorize more for low-income debtors

642.21

WILD CARD

$100 of any personal property, including cash

627.6(13)

For more information on filing bankruptcy in Iowa explore Iowa Bankruptcy Law.