In late January, 2004, the United States District Court for the Northern District of Iowa reversed the bankruptcy court for that district¹ and held that direct payments under the Farm Security and Rural Investment Act of 2002² were exempt from bankruptcy under Iowa law³ and thus were exempt for purposes of bankruptcy. Iowa had opted out of the federal bankruptcy exemptions ⁴ with the only exemptions claimable in bankruptcy in the state being exemptions recognized by Iowa law and in non-bankruptcy federal law.⁵ Unless overturned on appeal, the decision is likely to have a substantial impact on exemption determinations in situations where the governing law resembles the Iowa statute.⁶