How Do Iowa's Laws Protect You From Harassment When You're In Debt

Iowa debt collection laws protect consumers from unfair, fraudulent, deceptive, and harassing debt collection practices. While several laws may benefit debtors, the Iowa Fair Debt Collection Practices Act and the Fair Debt Collection Practices Act (FDCPA) are typically the two laws that consumers turn to when debt collectors or collection agencies contact them.

How Debt Collection Laws Work In Iowa

The Iowa Fair Debt Collection Practices Act (FDCPA) was passed to protect Iowa consumers from creditor harassment and abusive and deceptive debt collection practices. The Iowa FDCPA, unlike the federal FDCPA, applies to debt collectors who collect their debts. The Iowa Act is also more inclusive than the FDCPA because it applies to all debt collectors, including people trying to collect their debts. Unfortunately, many collectors and collection agencies disregard the law and regularly harass and violate your rights if you let them.

The federal FDCPA requires collection agencies to follow these regulations:

  • The collection agency must stop contacting you if you request or dispute the debt in writing.
  • The collection agency must send you a written notice identifying the debt and giving you the right to dispute the debt or request the name and address of the original creditor in its initial communication or within five days of that communication. If you file a dispute, the collector must halt collection efforts on the disputed portion of the debt until the collector responds. 
  • A collector's lawsuit must usually be filed in the same county or judicial district where you live or signed the contract.

In Iowa, debt collectors are prohibited from doing the following in their debt collection efforts:

  1. Call repeatedly or incessantly to the point of harassment or call at unusual hours
  2. Contact you directly if you have appointed a lawyer.
  3. Pretend they are a lawyer if they are not.
  4. Contact your employer more than once a month to confirm your employment.
  5. Make a threat or use violence.
  6. Accuse you falsely of fraud or any other crime.
  7. Contact an acquaintance for any reason other than to locate you.
  8. Falsely threaten that nonpayment will result in arrest, wage garnishment, or seizure of your property.
  9. Contact a debtor's parents, a trustee, a conservator, or a guardian more than once every three months.
  10. Take or threaten to take illegal action.
  11. Send you documents that appear to be legal when they are not.
  12. Falsify the amount of money owed.
  13. Use vulgar or obscene language.

How You Should Respond To Collection Calls And Letters In Iowa

If a creditor sends you a collection letter, the worst thing you can do is ignore it.

Check that the collector is real and that the amount being asked for is correct before you agree to pay. Ask for the name and address of the original creditor and the debt collector to confirm your debt. Also, ask how much is owed, whether interest or fees have been added, and when the account became overdue.

If someone says you owe them money and don't think it's yours or a scam, you can dispute it. When a debt collector contacts you, send a letter to the debt collection agency fighting the debt. You should do this within 30 days. In your letter, you should ask for total confirmation of how much you owe in total. Sending the letter by certified mail with a request for a return receipt is a good idea. It's possible that your request. If you don't owe the money and debt collectors keep calling you about it, send them a letter telling them to stop.

If you own the debt and are legally required to pay it, the collection agency may be able to work something out with you. Some will agree to less than what you owe, while others will try to work out terms you can pay.

How long does a debt collection agency have to sue you in Iowa?

In Iowa, the amount of time you have to pay back a debt depends on the kind of account and the debt. Under Iowa law, debt collectors can go after money for 10 years for some obligations caused by written contracts, like mortgages. Most debts in Iowa that were made through oral contracts where the terms were not written down and signed have a five-year statute of limitations. Auto loans, however, only have a one-year statute of limitations. At the same time, creditors have up to five years to go after credit card debt and medical bills.

Type of Debt

Iowa Statute of Limitations

Mortgage Debt

10 Years

Medical Debt

5 Years

Credit Card

5 Years

State Tax Debt

10 Years

Auto Loan Debt

1 Years

Wage Garnishment in Iowa

Wage garnishment is the most common method used by judgment creditors to enforce judgments. A judgment creditor would contact the debtor's employer and request that the employer deduct a particular portion of the debtor's wages each pay period and send the money to the creditor.

Most states allow creditors to garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security or pension benefits for consumer debt is not permitted under federal or Iowa law, but it may be allowed for child support.

If the collector knows where the debtor works, they may seek wage garnishment. The garnishment is limited to 25% of the debtor's net take-home pay under federal law. Garnishment is only permitted after the person being garnished has been given a 10-day notice.

The Iowa Consumer Code allows a consumer to request that the garnishment amount be reduced if the money is needed to support the consumer or the consumer's family. If you require a garnishment reduction consult with a lawyer to discuss your options.

In addition, Iowa law limits the total amount that a judgment creditor can garnish in a single calendar year. If your annual income is:

  • If you earn less than $12,000 per year, a garnishment of up to $250 is permitted.
  • If your annual income is between $12,000 and $15,999, a garnishment of up to $400 is possible.
  • If you annually earn between $16,000 and $23,999, a garnishment of up to $800 is possible.
  • If it is between $24,000 and $34,999, a garnishment of up to $1,500 is permitted.
  • If you earn $35,000 to $49,999, a garnishment of up to $2,000 may be imposed, or
  • If you earn $50,000 or more yearly, no more than 10% of your wages may be garnished.

Finding Debt Relief In Iowa

Are your credit card bills, student loan payments, or other debts weighing you down? You can get a handle on your financial obligations if you look for debt relief. There are different ways to get out of debt, and one may work better than the rest. With the help of a lawyer, you can consolidate your debts or come to a settlement

When you're in debt, you might want to do whatever it takes to pay back what you owe, but not all options are good. A payday loan might seem like a quick and easy way to solve your problem, but it's more likely to keep you in debt for longer. 

The Bottom Line

If you live in Iowa and have debt, whether it's from unpaid student loans, high credit card balances, or medical bills you didn't expect, you are not alone. The Iowa law and the federal FDCPA can protect you from debt collectors who may harass you, and Iowa state law may give consumers a broader range of protections. 

You should talk to a lawyer about whether you should file your claim under state or federal law if you ever find a collector has violated the FDCPA. If you have a lot of debt, you can choose from several ways to pay it back, depending on your debt and how much you owe.

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