Iowa Bankruptcy Exemptions
The term "Iowa bankruptcy exemptions" refers to assets that you get to keep when you file bankruptcy. As a practical matter, most people keep all their assets when they file bankruptcy given a reasonable amount of legal bankruptcy planning.
- Homestead - As long as you live in it, you can keep your home and just make the payments, no problem
- Up to $7,000 in equity in each of one car per filing debtor (2 cars for married couples filing together), although you do need to be on the title to exempt your vehicle. If you owe as much or more than the car is worth, you don't even need the exemptions since there is no equity. But say you are filing jointly and have two cars worth $7,000 each with no loans. If the wife is not on either title, that would be an issue since you have to be on the title to use your exemption. You can also normally keep older vehicles with little value. We use www.kbb.com trade-in value on vehicles
- Wedding & Engagement Rings
- Musical Instruments
- Shotgun and Rifle or Musket
- Household Goods/Appliances/Furnishings
- Whole Life Insurance cash value where the beneficiary is the spouse or child of the insured
- Health Equipment
- Employer Sponsored Retirement Accounts (401k, IPERS etc., includes IRA rollovers from employer sponsored retirement.)
- For people filing from about August 1st until tax refunds are received and spent, the first $1,000 of tax refunds per working (with taxes withheld) person (up to $2,000 for married joint cases) plus your Earned Income Credit (check page two of your Fed 1040) and some additional amount of your wild card exemption(s) depending on what else you need the wild card exemption(s) for. Those filing bankruptcy out of tax season normally do not lose any of their tax refunds.
- Business equipment up to $10,000 (in equity)
- $1,000 wild card per person although we need to use part of this for your accrued wages
- Rental deposits
Note: Some of these items have limited exemptions amounts, but they are rarely reached, so most clients keep all of this property. If you have particularly valuable property, it should be discussed with your attorney before filing bankruptcy.
Common Non-Exempt Assets
Note: As with any other asset, if you have little or no equity in an item below due to a loan on the item, you can normally keep it anyway, since the trustee would have to pay off the loan if he wanted to take it from you. If you own any of these items you should discuss it with your attorney prior to filing bankruptcy to find out what options you have.
- Motorcycles, Campers, Boats, Motors, Trailers
- Expensive Collections. Caution: Most clients vastly over-value collections. Be sure to make a sober evaluation of how much cash you could get for collections. It is often much less than you would think.
- Health Savings Accounts
- Very large tax refunds
- Whole Life Insurance where the beneficiary is not spouse/child of insured
- Pending lawsuits against others (except workers compensation which is normally exempt) although personal injury proceeds necessary for your support may be exempt.
- Rental Properties with significant equity
Note: If you owe as much as the asset is worth, you may be able to keep it if you like since there is little or no equity.
You also do have the $1,000/$2,000 joint married wild card exemption you can use for these items.