U.S. Bankruptcy Court — Southern District of Iowa
Coralville and all of Johnson County are in the Southern District of Iowa, with the courthouse at 110 East Court Avenue, Suite 300, Des Moines, IA 50309. Phone: (515) 284-6230. Bankruptcy is exclusively federal — you cannot file bankruptcy in Johnson County District Court. The 341 "meeting of creditors" is typically held by phone or video for most routine consumer cases.
The chapters — which one fits
| Chapter | For | Duration |
|---|---|---|
| Chapter 7 | Wipe out unsecured debt; income below means test | 4–6 months |
| Chapter 13 | Catch up arrears, keep house/car, regular income | 3–5 years |
| Chapter 11 | Business reorganization; high-debt individuals | Open-ended |
| Chapter 12 | Family farmer or fisherman | 3–5 years |
Chapter 7 — liquidation
Chapter 7 is the classic "fresh start" bankruptcy. A trustee is appointed, takes any non-exempt assets (in most consumer cases, there are none), liquidates them, and pays creditors. Most unsecured debt — credit cards, medical bills, personal loans, old utility bills, deficiency balances — is discharged in about 4–6 months. You walk away owing nothing on those debts.
What survives a Chapter 7: student loans (in nearly all cases), recent tax debt, child support, alimony, criminal fines, debts from fraud or DUI injury, secured debts if you keep the collateral.
Chapter 13 — reorganization
Chapter 13 is for people with regular income who want to keep property they're behind on (house, car) and pay creditors a portion of what they're owed over 3 to 5 years. You propose a plan, the trustee distributes your monthly payment, and at the end the remaining unsecured debt is discharged. You file Chapter 13 when:
- You're behind on mortgage and want to keep the house
- You earn too much to pass the Chapter 7 means test
- You have non-dischargeable debt (recent taxes, support arrears) that you need to spread out
- You have non-exempt assets you'd lose in Chapter 7
Chapter 11 — businesses (and rarely, individuals)
Chapter 11 is the reorganization chapter primarily used by businesses. Individuals occasionally file Chapter 11 when their debts exceed the Chapter 13 limits. Expensive and procedural — small Chapter 11s are rare in this market.
Chapter 12 — family farmers and fishermen
Chapter 12 is a streamlined reorganization for farm and fishing operations — relevant in rural Iowa. Higher debt limits than Chapter 13, more flexible than Chapter 11. If you operate a farm and need to restructure secured debt against crops, equipment, or land, this is your chapter.
The means test — qualifying for Chapter 7
To file Chapter 7, you must pass the means test, which compares your average gross household income for the 6 months before filing against the Iowa median income for your household size.
If you're under the Iowa median
You automatically pass the means test and qualify for Chapter 7 — no further analysis needed.
If you're over the Iowa median, you complete the full means test calculation — deducting allowed living expenses, secured debt payments, and priority debt — to determine "disposable income." If your disposable income is high enough that you could repay a meaningful portion of unsecured debt over 5 years, you're presumed abusive for Chapter 7 and pushed toward Chapter 13.
Iowa bankruptcy exemptions — what you keep
Iowa is one of the states that requires use of Iowa exemptions (not the federal ones) for residents who've lived in the state long enough (730 days+ in most cases). Iowa exemptions are in Iowa Code Chapter 627.
| Asset | Iowa exemption |
|---|---|
| Homestead (primary residence) | Unlimited value, ½ acre urban / 40 acres rural |
| Motor vehicle | $7,000 equity (one vehicle) |
| Household goods, furnishings, appliances | $7,000 aggregate |
| Wedding/engagement rings | Generally exempt |
| Tools of trade | $10,000 |
| Retirement accounts (401k, IRA, pension) | Generally fully protected |
| Wildcard (any property) | $1,000 |
| Cash on hand | $1,000 |
| Life insurance (cash value) | $15,000 (Iowa-specific limits apply) |
Required pre-filing steps
1. Credit counseling (pre-filing)
Within 180 days before filing, you must complete a credit counseling session from a U.S. Trustee–approved credit counseling agency. Typically 60–90 minutes, online or by phone, costs $10–$50 (can be waived if you can't afford it). Get the certificate — you'll need it for the filing.
2. Debtor education (pre-discharge)
After filing, before discharge, you must complete a second course — debtor education / financial management. Same idea: approved provider, about 2 hours, $10–$50. Without the certificate, you don't get your discharge.
The automatic stay — collections stop immediately
The moment your petition is filed, the automatic stay (11 U.S.C. § 362) freezes virtually all collection activity:
- Phone calls and letters from creditors stop
- Wage garnishments stop
- Lawsuits are paused (or dismissed if filed afterward)
- Foreclosure sales are halted
- Repossessions are halted
- Utility shut-offs are halted (with some limits)
Creditors who violate the automatic stay can be sanctioned. The stay isn't unlimited — secured creditors can ask the court to lift it on specific collateral, and some debts (like ongoing support obligations) aren't stayed.
What NOT to do before filing
- Don't transfer property to family ("just to protect it"). The trustee can undo transfers up to 2 years back (federal fraudulent transfer) or 4 years back under Iowa state law. The transferee (your sister, your kid) gets dragged into the case.
- Don't pay back loans from family or friends. Repaying an "insider" within 1 year before filing is a preference — the trustee will sue your mom to claw back the $5,000 you paid her.
- Don't pay one credit card more than the others. Preference rules also apply to regular creditors (90 days).
- Don't run up credit cards. Cash advances over $1,100 within 70 days, or luxury purchases over $800 within 90 days, are presumed non-dischargeable.
- Don't hide assets. Concealment is bankruptcy fraud — a federal crime, and grounds for denying discharge entirely.
- Don't take retirement-account loans or withdrawals to pay dischargeable debt. You're converting exempt assets into discharged debt — the worst possible trade.
- Don't ignore tax filings. Tax returns for the years you'll list must be filed; trustee will demand them.
Credit impact & recovery
A Chapter 7 stays on your credit report for 10 years from the filing date. Chapter 13 stays for 7 years. Practically:
- Your credit score drops sharply at filing, but most filers see meaningful recovery within 12–24 months — because the debt-to-income picture improves overnight
- Secured credit cards, then unsecured, are usually available within 6–12 months
- Auto loans typically available immediately (at higher rates)
- FHA mortgage: 2-year wait after Chapter 7 discharge; 1-year of payments into Chapter 13 plan with trustee permission
- Conventional mortgage: 4-year wait after Chapter 7; 2 years after Chapter 13 discharge
Attorney fees
| Case type | Typical fee |
|---|---|
| Chapter 7 (no-asset consumer) | $1,000–$2,500 |
| Chapter 7 (small business / complex) | $2,500–$5,000+ |
| Chapter 13 (consumer) | $3,000–$5,000 |
| Court filing fee — Chapter 7 | $338 |
| Court filing fee — Chapter 13 | $313 |
| Credit counseling + debtor ed courses | $20–$100 combined |
Chapter 13 attorney fees can often be paid through the plan rather than upfront. Chapter 7 fees are almost always paid in full before filing — because fees themselves can be dischargeable if owed at filing.
When you need a bankruptcy attorney
- You're considering bankruptcy and don't know which chapter fits
- You're being sued, garnished, or foreclosed on
- You have non-exempt assets and aren't sure how to protect them
- You own a business or have business debts
- You're behind on a house or car you want to keep
- You have tax debt or student loans you want to address
- You've been told you can "DIY" with online forms — almost always a mistake outside the simplest no-asset case
FAQ — Iowa bankruptcy
Where do I file bankruptcy if I live in Coralville?
U.S. Bankruptcy Court for the Southern District of Iowa — 110 East Court Avenue, Suite 300, Des Moines, IA 50309, (515) 284-6230. Bankruptcy is exclusively federal. Johnson County District Court has no role.
Will I lose my house if I file Chapter 7 in Iowa?
Iowa's homestead exemption is unlimited in dollar value (subject to acreage limits — ½ acre urban, 40 acres rural). Most Iowa homeowners keep their homes in Chapter 7 as long as the mortgage is current.
Can I discharge student loans?
Almost never. Student loans are non-dischargeable absent "undue hardship," which is an extremely difficult standard to meet. A small number of borrowers succeed under recent DOJ guidance, but the default assumption is that student loans survive.
How long after Chapter 7 can I buy a house?
FHA: 2 years after discharge. Conventional: typically 4 years. Some lenders work with discharged debtors sooner with significant down payments.
Will my employer find out?
Bankruptcy is a public record but isn't actively reported to employers. Most employers never learn unless they run a credit check that hits the filing. Federal law prohibits discrimination against employees for filing bankruptcy.
Do I have to list all my debts?
Yes — all of them, including ones you'd like to keep paying (like your mom). Omitting debts is bankruptcy fraud. You can later choose to reaffirm certain debts (typically a car) or voluntarily pay listed creditors after discharge.