In Re Francis P. Takes Mary L. Takes, Debtors. Lasalle Bank, N.A. Valley Bank v. Francis P. Takes Mary L. Takes

LOKEN, Chief Judge.

In this Chapter 7 bankruptcy proceeding, debtors Frank and Mary Lu Takes claimed a homestead exemption in Unit No. 4 of the Garnett Place Town-homes in Cedar Rapids, Iowa, where they have lived since 1994 and which they purchased in 2004. Creditors LaSalle Bank and Valley Bank objected to the exemption, arguing that under Iowa law — which governs this issue by reason of 11 U.S.C. § 522(b) and Iowa Code § 627. 10 — debtors’ homestead may be sold to satisfy debts to the banks that were “contracted prior to [the homestead’s] acquisition” in 2004. Iowa Code § 561.21(1). The…