The Iowa Homestead Exemption

Most people want to know whether they can keep valuable property before filing for bankruptcy—especially a home. If you qualify to use the Iowa homestead exemption, you can protect some or all of the equity in your house. In this article, we explain:

• how much the Iowa homestead exemption will cover, and
• how to apply it in your bankruptcy case.

For more bankruptcy information, read Filing for Bankruptcy in Iowa. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz.

Homestead Exemptions Available in an Iowa Bankruptcy

In Iowa, you'll use Iowa's state exemptions—the federal bankruptcy exemptions aren't available (some states allow residents to choose between the two sets). However, you can supplement Iowa's state exemptions with the federal nonbankruptcy exemptions.

To help you make an informed choice, we've listed the homestead exemption amount below. We've also included links to the federal and state exemption lists that apply in your case, so you'll have an easier time deciding whether bankruptcy will work for you.

If you're married, remember that spouses can double some exemption amounts, but not all. Find out about other filing considerations for spouses.

Property Protected by the Iowa Homestead Exemption

Under the Iowa exemption system, homeowners can exempt unlimited home equity. The homestead exemption applies to real property, including a home or apartment. You must use the property as your home to protect it under the homestead exemption.

Property cannot exceed one-half acre if located within a city or town or forty acres if located elsewhere. If more than one dwelling house is located on the property, you may only protect one house, but you are permitted to select which house you want to protect. You can protect one or more adjoining lots of land, as long as they are used as part of the same homestead.

Here are some other rules that apply to the Iowa homestead exemption:

Security deposits. The homestead exemption protects security deposits held by your landlord or utility companies (gas, water, electric, telephone), plus any interest accrued if the deposit is required to be held in an interest-bearing account. You can also protect any advance rent you have paid to your landlord under an unexpired lease.

Homes bought with pension money are protected. If you purchased your homestead with money from a pension, it is protected.

Timing Your Iowa Bankruptcy

You can file for bankruptcy in Iowa after living there for more than 180 days. However, you must live in Iowa much longer before using Iowa exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.

But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.

Also, to claim the total value of the Iowa homestead exemption, you must have purchased and owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, your homestead exemption is limited by federal law to $170,350 (this figure will adjust on April 1, 2022).

Learn more about this requirement, the current amount of the federal cap, and other important exceptions to homestead exemptions.

Claiming the Iowa Bankruptcy Homestead Exemption

In Iowa, the homestead exemption is automatic—you don't have to file a homestead declaration with the recorder's office to claim the homestead exemption in bankruptcy. Instead, when filing for bankruptcy, you'll list your homestead exemption on Schedule C: The Property You Claim as Exempt when completing your bankruptcy forms. You can find out about other requirements you'll need to meet in Your Home in Chapter 7 or Your Home in Chapter 13.

Finding the Iowa Bankruptcy Homestead Exemption Statute

You'll find Iowa's homestead exemption in the Iowa Code at §§ 561.2, 561.16, and 499A.18 on the Iowa Legislature website. Still, the best way to protect your assets is by consulting with a local bankruptcy lawyer.

Need More Bankruptcy Help?

Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Updated April 23, 2022