Imagine you file for bankruptcy but keep your house because Iowa law lets you protect your home from creditors. Sounds simple, right? A recent case, In re Jencks, decided by the Eighth Circuit Bankruptcy Appellate Panel (BAP) in August 2025, shows it’s not always so simple.
The Story
Scott and Linda Jencks owned property in Waucoma, Iowa, where they lived. When they filed for bankruptcy in July 2021, they claimed this property as their “homestead,” a legal term for the home a family is allowed to protect from most creditors. Included in the Waucoma property was a vacant lot. Iowa law generally shields a homestead from being seized to pay debts.
Here’s the twist: just twelve days before filing for bankruptcy, the Jenckses had also signed paperwork to buy a different property in New Hampton, Iowa. They never listed this second property on their bankruptcy paperwork.
One of their creditors, AgVantage, argued that once the Jenckses bought the New Hampton property, they had essentially moved on, meaning the Waucoma property was no longer protected. AgVantage sought to take the vacant lot to pay off the debt they were owed. The bankruptcy court agreed with AgVantage, ruling the Jenckses had abandoned their homestead protection.
What the Appeals Panel Decided
The BAP disagreed and reversed the bankruptcy court’s ruling. Its reasoning centered on one key idea: timing matters. Under Iowa law, whether a homestead is protected depends on the facts as they existed on the day someone files for bankruptcy, not what happens afterward.
The panel also stressed that homestead claims start out presumed valid. If a creditor wants to challenge that, the creditor carries the burden of proving the homestead claim was improper, not the other way around. AgVantage’s only real evidence was the New Hampton deed. But nobody showed the Jenckses actually lived there, or intended to, on the day they filed for bankruptcy. Simply owning a second property, without proof of moving in, isn’t enough to strip away homestead protection.
Why It Matters
This case is a reminder that Iowa’s homestead exemption exists to protect the roof over a family’s head, and that protection isn’t easily lost. Courts must look closely at the facts on the filing date, and creditors challenging a homestead claim have real work to do to prove th
