Iowa Bankruptcy Exemptions
Unlimited homestead allowance no longer available under Iowa bankruptcy exemption law
The official State of Iowa bankruptcy exemptions are created by statute, and subject to further distinction through judicial opinions. Courts tend to narrowly define the scope of coverage for included property that may be claimed as exempt., with one obvious and large exception. The Iowa homestead exemption is limited to one-half acre of urban property, and 40 acres of rural land, without limit upon value according to the state statute. The unlimited value allowance drew dark criticism for many years, and recently, to the extent applicable in Iowa bankruptcy courts, is no longer available.
The Iowa homestead exemption debacle
As the cornerstone of recent reform, the unlimited homestead exemption value allowance was eliminated. Previously, only six states permitted designation of land as a homestead without value limitations. After the effective date of new reform laws, all states are now subject to pervasive federal caps upon the maximum value that may be retained in any federal proceeding under the Code.