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Iowa Bankruptcy Laws
Though some property may be liquidated under Chapter 7 bankruptcy, both federal and state laws allow debtors to protect essential property by claiming specific exemptions. Iowa requires debtors to use the state exemptions, which include:
Homestead |
Unlimited |
Personal Property |
Motor vehicles up to $7,000; household furnishings, clothing, and other personal property up to $7,000; health aids; wrongful death proceeds needed for support; up to $1,000 of other personal property |
Wages |
Salary or wages of a prisoner; income as per earnings tables |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; peace officers; public employees; disabled firefighters and police for benefits received; police and firefighters |
Public Benefits |
Aid to dependent children; unemployment, veterans’ benefits; Social Security; public assistance; worker’s comp; adopted child assistance |
Tools of the Trade |
Up to $10,000 of non-farming equipment; up to $10,000 of farming equipment, livestock, and feed |
Insurance |
Some forms of life insurance proceeds; disability, health, illness, or life insurance proceeds; illness or disability benefits |
Before a debtor and their lawyer can file their bankruptcy petition, the debtor must complete a credit counseling course. At that time, a bankruptcy trustee takes charge of the proceedings, examines the debtor and their claims, and presents the case to the creditors at a required 341 meeting. If there are no irregularities, the case proceeds to court and is generally approved, allowing the debtor to experience the debt-relief bankruptcy provides. |
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