Iowa Bankruptcy Guide

Iowa Bankruptcy Overview

Iowa offers strong protections for bankruptcy filers through its generous exemption laws, most notably an unlimited homestead exemption on property of reasonable size. Understanding Iowa's specific exemptions and requirements is crucial for protecting your assets during bankruptcy proceedings.

Iowa law requires that you use Iowa state exemptions rather than federal exemptions if you've lived in Iowa for at least 730 days (two years) before filing. This guide covers everything you need to know about filing Chapter 7 or Chapter 13 bankruptcy in Iowa, including median income thresholds, exemption limits, and court locations.

2026 Iowa Median Income for Chapter 7 Bankruptcy

To qualify for Chapter 7 bankruptcy in Iowa, your household income must generally be at or below the state median income for your household size. If your income exceeds these thresholds, you may still qualify through the means test or may need to file Chapter 13 instead.

Iowa Bankruptcy Exemptions

Exemptions determine what property you can keep when filing bankruptcy. Iowa has its own set of exemptions, and you must use Iowa state exemptions if you've lived in Iowa for at least two years before filing. Iowa cannot choose the federal exemptions. Below are the most important exemptions for Iowa filers.

Iowa Homestead Exemption

Unlimited value on up to 1/2 acre in a city or town, or up to 40 acres elsewhere.

Iowa's homestead exemption is one of the most generous in the United States, offering unlimited dollar value protection for your primary residence as long as it meets the acreage requirements. This means whether your home is worth $50,000 or $500,000, the equity in your homestead is fully protected in bankruptcy if it's on the allowed acreage.

The key limitation is on the size of the property, not the value:

• Urban/City Property: Up to 1/2 acre (approximately 21,780 square feet) if located within a city or town
• Rural Property: Up to 40 acres if located outside city or town limits

Iowa Vehicle Exemption

Up to $7,000 in value.

Iowa allows you to protect up to $7,000 of equity in one motor vehicle. This is equity—meaning the vehicle's fair market value minus what you owe on any car loans. For example, if your car is worth $15,000 and you owe $9,000, your equity is $6,000, which is fully protected under Iowa's exemption.

If your vehicle has more than $7,000 in equity, you may need to use additional exemptions or risk losing the vehicle in a Chapter 7 bankruptcy, though you can keep it by continuing to make payments in Chapter 13.

Iowa Personal Property Exemptions

Iowa provides specific exemptions for various types of personal property:

• Household Goods and Furnishings: Up to $7,000 total for clothing, appliances, books, household furnishings, and other household goods
• Wedding and Engagement Rings: Up to $7,000 total for wedding and engagement rings
• Other Jewelry: Up to $2,000 for jewelry other than wedding/engagement rings
• Firearms: Up to $1,500 for shotguns, rifles, and muskets
• Musical Instruments: Up to $1,000 for musical instruments owned by debtor or dependent
• Tax-Exempt Retirement Accounts: Unlimited protection for 401(k)s, IRAs (subject to federal limits), pensions, and other qualified retirement plans
• Health Savings Accounts: Unlimited protection
• Life Insurance: Unlimited cash value for life insurance proceeds and policies if beneficiary is spouse, child, or dependent
• Tools of Trade: Up to $10,000 for equipment, tools, and books used in your profession or trade
• Wildcard Exemption: Up to $1,500 that can be applied to any property (includes an additional $15,000 if you don't claim the homestead exemption)

Iowa Wage and Income Exemptions

• Wages: Unlimited protection for wages, salary, and other compensation earned but not yet paid (exemption protects wages during bankruptcy process)
• Social Security Benefits: Unlimited protection
• Veterans Benefits: Unlimited protection
• Unemployment Benefits: Unlimited protection
• Workers' Compensation: Unlimited protection
• Disability Benefits: Unlimited protection

Iowa State Exemptions vs. Federal Exemptions

Unlike some states that allow bankruptcy filers to choose between state and federal exemptions, Iowa requires that you use Iowa state exemptions if you meet the residency requirements (730 days living in Iowa before filing).

The federal exemption system is not available to Iowa residents. This is actually beneficial for many Iowa filers because Iowa's unlimited homestead exemption offers significantly better protection than the federal homestead exemption (currently $27,900, or $55,800 for married couples filing jointly).

Iowa Bankruptcy Courts and Locations

Iowa is divided into two federal bankruptcy court districts: the Northern District and the Southern District. Where you file depends on where you live or where your business is primarily located.

Northern District of Iowa

The Northern District covers the northern half of Iowa and has four courthouse locations:

• Cedar Rapids: 111 Seventh Avenue SE, Cedar Rapids, IA 52401
• Sioux City: 320 Sixth Street, Sioux City, IA 51101
• Waterloo: 111 East Fourth Street, Waterloo, IA 50703
• Fort Dodge: 122 North Fifth Street, Fort Dodge, IA 50501

Southern District of Iowa

The Southern District covers the southern half of Iowa and has three courthouse locations:

• Des Moines: 110 East Court Avenue, Des Moines, IA 50309 (Main Courthouse)
• Council Bluffs: 8 South Sixth Street, Council Bluffs, IA 51501
• Davenport: 131 East Fourth Street, Davenport, IA 52801

Cost of Filing Bankruptcy in Iowa

The total cost of filing bankruptcy in Iowa includes both court filing fees and attorney fees. Here's what to expect:

Court Filing Fees (2026)

• Chapter 7: $338
• Chapter 13: $313

These fees are set by federal law and are the same nationwide. In Chapter 7, you may be able to request a fee waiver if your income is below 150% of the federal poverty line, or you may request to pay the filing fee in installments over 120 days.

Attorney Fees in Iowa

Attorney fees for bankruptcy in Iowa vary by location, case complexity, and the attorney's experience. Here are typical ranges by city:

• Des Moines: $1,200 - $2,000 for Chapter 7; $3,000 - $4,500 for Chapter 13
• Cedar Rapids: $1,100 - $1,800 for Chapter 7; $2,800 - $4,200 for Chapter 13
• Davenport: $1,100 - $1,700 for Chapter 7; $2,800 - $4,000 for Chapter 13
• Sioux City: $1,000 - $1,600 for Chapter 7; $2,500 - $3,800 for Chapter 13
• Iowa City: $1,100 - $1,800 for Chapter 7; $2,800 - $4,200 for Chapter 13
• Waterloo: $900 - $1,500 for Chapter 7; $2,500 - $3,800 for Chapter 13

Chapter 13 attorney fees are typically paid through your repayment plan over 3-5 years, making bankruptcy more accessible even if you cannot afford the full fee upfront. Many Chapter 7 attorneys also offer payment plans for their fees.

Iowa-Specific Bankruptcy Considerations

Agricultural Property and Farming Operations

Iowa has specific provisions for agricultural operations and farming families. The unlimited homestead exemption on up to 40 acres is particularly beneficial for farmers, as it can protect the family farmhouse and surrounding land regardless of value. However, if your farming operation exceeds 40 acres, additional acreage is not protected under the homestead exemption.

Farmers should also consider Chapter 12 bankruptcy, which is specifically designed for family farmers and fishermen. Chapter 12 offers more flexibility than Chapter 13 for those with seasonal income and larger debts related to farming operations.

Iowa Property Tax Credit and Bankruptcy

Iowa offers a homestead property tax credit to qualifying homeowners. This credit is not affected by bankruptcy—you can continue to receive your homestead tax credit even while your bankruptcy case is pending or after it's completed. The credit is applied directly to your property tax bill by the county assessor.

Mobile Homes and Manufactured Housing

In Iowa, mobile homes and manufactured housing can qualify for the homestead exemption if they are your primary residence and meet the acreage requirements. This is true whether the mobile home is on land you own or in a mobile home park, though the unlimited value protection only extends to the mobile home itself—not to rented land.

Iowa Retirement and Pension Protections

Iowa provides excellent protection for retirement savings. State and federal retirement accounts, including 401(k)s, 403(b)s, IRAs, SEP-IRAs, SIMPLE IRAs, and defined-benefit pensions are all protected in bankruptcy. Iowa also protects benefits from the Iowa Public Employees' Retirement System (IPERS) and other government pension plans.

Iowa Bankruptcy FAQs

How long does Chapter 7 bankruptcy take in Iowa?

A typical Chapter 7 bankruptcy case in Iowa takes about 4-6 months from filing to discharge. The 341 Meeting of Creditors usually occurs 30-45 days after filing, and the discharge is typically granted 60-90 days after the meeting, assuming no complications or objections arise.

Can I keep my home in Iowa bankruptcy with an unlimited homestead exemption?

Yes, in most cases. Iowa's unlimited homestead exemption means you can keep your home regardless of its value, as long as it's on 1/2 acre or less in a city/town, or 40 acres or less in a rural area. You must continue making mortgage payments if you have a home loan, and you must use the property as your primary residence. If you're behind on mortgage payments, Chapter 13 may be a better option to catch up while keeping your home.

What happens if my home is on more than 40 acres in rural Iowa?

If your rural property exceeds 40 acres, only the first 40 acres (including your residence) are protected by the homestead exemption. The equity in any acreage beyond 40 acres is not protected and could potentially be liquidated by the bankruptcy trustee in Chapter 7. If you have significant acreage, consult with an Iowa bankruptcy attorney about the best approach, which might include Chapter 13 or even Chapter 12 if you're engaged in farming.

Do I have to use Iowa exemptions or can I use federal exemptions?

If you've lived in Iowa for at least 730 days (two years) before filing bankruptcy, you must use Iowa state exemptions. Iowa does not allow filers to choose federal exemptions. If you've lived in Iowa for less than two years, you'll generally use the exemptions from the state where you lived before Iowa, which can create complex situations requiring legal guidance.

What is the wildcard exemption in Iowa and when should I use it?

Iowa offers a $1,500 wildcard exemption that can be applied to any property. Additionally, if you don't claim the homestead exemption (because you don't own a home or choose not to claim it), you can use an additional $15,000 wildcard exemption, for a total of $16,500. This is particularly valuable for renters or those with significant equity in vehicles, bank accounts, or other non-exempt property.

Can I file bankruptcy on my own in Iowa without an attorney?

While it's legally possible to file bankruptcy without an attorney (called filing "pro se"), it's generally not recommended. Bankruptcy law is complex, and mistakes in your filing can result in losing property you could have protected, having your case dismissed, or being denied a discharge. Most Iowa attorneys offer free or low-cost initial consultations, and Chapter 13 attorney fees can be paid through your repayment plan. Given Iowa's unique unlimited homestead exemption and other specific state provisions, professional guidance is valuable.

How does bankruptcy affect my credit score in Iowa?

Bankruptcy will negatively impact your credit score initially, typically dropping it by 130-200 points for those with previously good credit. However, this effect is the same nationwide—Iowa bankruptcy doesn't affect your credit differently than bankruptcy in other states. A Chapter 7 bankruptcy remains on your credit report for 10 years, while Chapter 13 remains for 7 years. Many Iowa filers find they can qualify for new credit within 2-3 years after discharge, especially if they practice good credit habits post-bankruptcy.

Will I lose my tax refund if I file bankruptcy in Iowa?

Tax refunds can be protected in Iowa bankruptcy, but it depends on timing and available exemptions. Iowa's wildcard exemption ($1,500, or up to $16,500 if you don't claim homestead) can be used to protect expected tax refunds. The bankruptcy trustee may claim a portion of large refunds that exceed your available exemptions. Many Iowa attorneys recommend filing bankruptcy at a strategic time relative to when you'll receive your refund to maximize protection.

How much does it cost to file bankruptcy in Iowa?

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees in Iowa typically range from $900-$2,000 for Chapter 7 and $2,500-$4,500 for Chapter 13, depending on your location and case complexity. Many attorneys offer payment plans, and Chapter 13 attorney fees are usually paid through your repayment plan over time.

Can married couples file bankruptcy together in Iowa?

Yes, married couples can file a joint bankruptcy petition in Iowa, which often costs only slightly more than a single filing but discharges debts for both spouses. When filing jointly, you can double some exemptions but not the homestead exemption (which is unlimited for either individual or joint filers on qualifying property). Whether to file jointly or separately depends on your specific debt situation, and an Iowa bankruptcy attorney can advise on the best approach.

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