Iowa Bankruptcy Exemptions

Iowa's bankruptcy exemptions allow you to protect certain property in Chapter 7 bankruptcy.

March 31, 2017

If you file for Chapter 7 bankruptcy in Iowa, you can protect some or all of your property with Iowa’s bankruptcy exemptions. The bankruptcy exemptions in Iowa also play a role in determining the monthly amount of a Chapter 13 repayment plan. Read on to learn about what property is covered by Iowa’s bankruptcy exemptions.

For a general overview, see Bankruptcy Exemptions.

Iowa Debtors Must Use State Exemptions

Like many states, Iowa has enacted legislation “opting out” of the federal bankruptcy exemptions. As a result, bankruptcy filers in Iowa are only permitted to exempt property using the state laws.

Common Iowa Exemptions

The amounts listed are for an individual bankruptcy filer. A married couple filing jointly can double the amounts. Here are some of the most common exemptions available under Iowa law:

Alimony, Support and Separate Maintenance

Alimony, support and maintenance are exempt to the extent they are necessary for support. Iowa Code § 627.6(8)(d).

Cemeteries and Burial Property

Burial lots and cemeteries are exempt up to one acre. Iowa Code § 627.6.

Franchise, Permit and License Interests

Liquor licenses are 100% exempt. Iowa Code Ann. 123.38.

Fraternal Benefit Society Benefits

Fraternal benefit society benefits are 100% exempt. Iowa Code §§ 512B.18, 633.333.

Homestead or Residential Property

Homeowners may exempt an unlimited amount of value in one home or a one-unit apartment covered by the homestead exemption. Property cannot exceed one-half acre if located within a city or town, or forty acres if located elsewhere. Iowa Code §§ 561.2, 561.16, 499A.18

For more details about how the homestead exemption works in Iowa, see The Iowa Homestead Exemption.

Insurance Benefits

Public employee’s group insurance benefits are 100% exempt. A debtor’s interest in a life insurance policy is exempt when the debtor’s spouse, child, or dependent is the beneficiary. Life insurance proceeds are exempt to an extent (conditions apply). Group insurance benefits are exemept. Iowa Code §§ 509.12, 509A.9, 511.37 and 627.6.

Motor Vehicles

A debtor may exempt up to $7,000 in any motor vehicle. Iowa Code § 627.6.

To learn more, see The Iowa Motor Vehicle Exemption in Bankruptcy.

Pension and Retirement Benefits

Benefits from employee pension systems are 100% exempt. Social security and other pensions are exempt to the extent necessary for support. Iowa Code §§ 97A.12, 97B.39, 294.10B, 410.11, 411.13, 627.6, 627.8.

Personal Property

A debtor may exempt the following personal property:

  • up to $7,000 in household goods, clothing, musical instruments
  • professionally prescribed health aids
  • up to $2,.000 in jewelry
  • an engagement or wedding ring; if the rings were purchased after marriage and within the last two years, then the exemption is capped at $7,000, minus any amounts already used under the general jewelry exemption
  • up to $1,000 in private libraries, bibles, and paintings
  • one shotgun and either a musket or rifle, and
  • up to $1,000 in accrued wages and tax refunds.

Iowa Code § 627.6.

Public Assistance

Public assistance is 100% exempt (this includes earned income and child tax credits). Iowa Code §§ 239B.6, 627.6, and 627.19.

Trade Implements

A debtor may exempt up to $10,000 of trade implements. Iowa Code § 627.6.

Unemployment Compensation

Unemployment compensation is 100% exempt. Iowa Code §§ 96.15 and 627.6.

Veterans’ Benefits

Veterans’ benefits are 100% exempt. Iowa Code § 627.6.

Workers’ Compensation Benefits

Workers’ compensation is 100% exempt. Iowa Code § 627.13.

Wages

The greater of 75% of disposable earnings or 40 times the federal minimum wage. Iowa Code §§ 642.21, 537.5105. Additionally, Iowa has a complicated alternative method of computing wages--consult with an attorney.

Wages are not exempt from child spousal or child support. Iowa Code §§ 627.6, 627.11, 627.12, and 642.21.

Wildcard

Up to $1,000 of any personal property, including cash. Iowa Code § 627.6(14). (Learn more in The Iowa Wildcard Exemption in Bankruptcy.)

Confirm Iowa Bankruptcy Exemptions Before Filing

Iowa’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the Iowa Legislature website.

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