When someone has been paying a bad debt through a collection agency and is not able to do so anymore and needs to file bankruptcy on finances, doe the bad debt get included in bankruptcy? We are in Iowa. Also, does a small claims ruling for debts paid by former wife get included in bankruptcy.

All debts, even small ones that often get forgotten, if you owe it, it gets listed. Depending on type and status, some debts, like taxes may not get discharged, but you are required by law to include any debt you are listed on and owe.