If you’re planning on filing bankruptcy in Iowa, it is likely that you will be able to keep your home through the process. Iowa is one of a handful of states that allows for unlimited value to be protected in a homestead. However, it is important to note that Iowa bankruptcy laws limit the size of the homestead protected by the exemption. In the city, a home or apartment of unlimited value will be exempt as long as the property does not exceed one half acre in size. In rural areas, homesteads of 40 acres and less are exempt regardless of value.

Assuming the property size requirements are met, Iowa’s unlimited homestead exemption will prevent the forced sale of your home even outside of the bankruptcy context. In most cases, exemption statutes have a dual utility, applying in collection as well as bankruptcy proceedings. You could owe millions of dollars to a host of different creditors and own a home in Des Moines worth 2.5 million dollars, yet it will be safe from collection proceedings. If you elect to file for bankruptcy, the home will be protected as well.

Unlimited homestead exemptions, such as the one enacted in Iowa, are rooted in a belief that it is unfair to allow creditors to take ALL property in satisfaction of debt. As a matter of public policy, debtors are permitted to retain certain types of property regardless of the size of their financial woes. If you have questions about Iowa bankruptcy laws, contact an attorney.

Looking for more information? See Also:

What Is a Homestead Exemption? Can Creditors Take My Home?

Non-exempt Assets and Claims of Creditors

How Can I Prepare For Bankruptcy?

Secured Debt in Bankruptcy: No Free Lunch