Filing Bankruptcy In Iowa

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Filing bankruptcy in Iowa is much like the process in the other 49 states, with the nuances being somewhat different.  Nevertheless, individual debtors can opt to file Chapter 7 for as second chance, or Chapter 13 for debt restricting.  When filing Chapter 7, debtors can basically walk away from non-secured debts they cannot pay.  However, any applicable assets can be liquidated to pay back the creditors.  So, for people who want to keep the family cars, remain in their homes, or try to save their small business, Chapter 13 is the best option.  Unfortunately, if they still cannot pay according to the restructuring plan, they may still have to revert to Chapter7 bankruptcy.

Personal Bankruptcy in Iowa

According to Code Title 11 of the U.S. Bankruptcy Code, residents of Iowa can file Chapter 7 or Chapter 13 bankruptcy.

  • Chapter 7 Bankruptcy - Chapter 7 bankruptcy is probably the best option for people who have lost their jobs, and have no way to resolve their debts.  Immediately upon filing, all attempts to collect money have to cease.  Assets will be seized by the court, to help pay off the creditors.  However, there are income considerations.  For the single wage earner, the average is $41,381, for a 2-person household, it is $54,628; and the 3-person household is $63,888.
  • Chapter 13 Bankruptcy - For those who want to continue living in their homes and driving the family car, and still have a job with disposable income, after the necessities are met, Chapter 13 should be attempted.  The court can try to restructure payments to an amount that the debtor can pay. Then, as long as they pay the assigned monthly amount to the court, and keep current payments up to date, they have time to work through their debt. However, an individual may not have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

Bankruptcy during Foreclosure

Filing bankruptcy during foreclosure may be too late.  The lien holder can ask the judge to release the property from bankruptcy, so they can sell it and recoup some of their losses.  In most cases, it will only slow down the inevitable.  So, before it gets to that point, take action.  Contact a lawyer, when the payments are getting behind, and the next month cannot solve the financial crunch.  Find out how/if the property can be saved.

Iowa Bankruptcy Exemptions

Every state allows for certain asset exemptions that the court cannot consider for the repayment of debts.  In the state of Iowa, the exemptions include, but are not limited to:

Type of Asset(s)

Details on Applicable Exemption(s)


A home of unlimited value of no more than ½ acre in town or 40 acres located elsewhere-may record declaration


Accident, liability, life, and health insurance to paid to a spouse or dependent of up to $15,000, life insurance of $10,000 paid to spouse or dependent within 2 years of bankruptcy, group insurance proceeds or policy, life insurance proceeds, if specified not to be used to pay off creditors.


Partnership property, alimony, child support, and liquor licenses


Disability payments for firefighters or police officers, Federal Government pension payments, firefighters, police officers, peace officers, public employees, and other pensions needed for support

Personal Property

Appliances and household goods worth no more than $2000, Bible, books, and pictures worth no more than $1000, 1 acre cemetery plot, clothing worth no more than $1000,  guns,  wedding and engagement rings

Public Benefits

Benefits for adopted child, AFDC, public assistance, workmen’s and unemployment compensation

Tools of Trade

Farming equipment-excluding vehicle, livestock, and feed, and non-farming equipment worth no more than $10,000

Iowa Bankruptcy Filing Options

Need Bankruptcy Advice?

  • Use a Bankruptcy Lawyer - Bankruptcy laws are quite complicated.  Without a lawyer, it would be difficult to ensure that all of the proper paperwork has been filed.  During court proceedings, a lawyer can answer any pertinent questions, and make sure that nothing has been forgotten.
  • Use a Filing Service - Although it is not the best course of action, some people hire a filing service to fill out the important paperwork.  However, the service will not be held responsible, if something is forgotten.  Nor will they represent the debtor in court, or answer any legal questions.
  • File “Pro Se” - Some people choose to represent themselves in bankruptcy court.  Therefore, they file pro se.  Unfortunately, the financial risks can ultimately be more than the cost of good legal representation.  With all of the different little laws between states, it is important to get legal advice from someone who practices in Iowa.

Courts and Iowa Bankruptcy Trustee Information

Iowa Northern District Court

4200 C Street SW
Cedar Rapids, IA 52404

Iowa Southern District Court

300 United States Courthouse
123 East Walnut Street
Des Moines, IA 50309-2035