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



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