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Debt Collection Laws in Iowa

Patrick Austin, J.D. | November 28, 2023

Patrick Austin
Attorney from George Mason
Patrick Austin, JD

Patrick Austin is a licensed attorney with a background in data privacy and information security law. Patrick received his law degree at George Mason University's Antonin Scalia Law School, where he served as the Editor-in-Chief for the National Security Law Journal.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: The Iowa Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act (FDCPA) protect Iowans from absuive debt collectors. If you've been sued for debt in Iowa, know that the statute of limitations on debt is just five years there, and SoloSuit can help you respond to the lawsuit and increase your chances of winning.

Debt collection laws in the Hawkeye State are intended to help protect consumers from inappropriate and harassing debt collection efforts.

There are a number of state and federal laws that address how debt collectors can interact with consumers, namely The Iowa Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act (FDCPA).

Let’s take a closer look at these Iowa debt collection laws and how they can protect you from unscrupulous debt collectors.

Sued for debt in Iowa? Respond to prevent a default judgment.

The Federal Fair Debt Collection Practices Act protects you in Iowa

The Fair Debt Collection Practices Act (FDCPA) is a landmark federal law passed by Congress in 1977. The FDCPA establishes rules and regulations regarding the collection of both secured and unsecured debt, including consumers with credit card debt, student loan debt, auto loan debt, and so forth.

The FDCPA acknowledges the fact that debt collection agents and agencies are authorized to contact consumers through letters, emails, phone calls, and text messages. Nevertheless, the FDCPA sets forth rules of the proverbial road and legal limits on how those communications are conveyed and when they can be conveyed.

For example, the FDCPA requires debt collectors to provide a consumer a “validation notice” and this notice must be provided to a consumer within five days of initial contact. This validation notice needs to contain specific elements and pieces of information, including:

  • The specific amount you allegedly owe;
  • The name of the creditor to whom the debt is allegedly owed; and
  • What steps you can take if you have reason to believe it is not your debt.

The FDCPA prohibits inappropriate debt collection practices

The federal FDCPA prohibits debt collectors from engaging in excessive or unfair collection practices, such as the following:

  • Using profane, harassing, or obscene language
  • Contacting third parties, such as neighbors, employers, or relatives, in order to collect a debt
  • Imposing fees or charging interest on the debt
  • Threatening violence, garnishing wages, or seizing property
  • Contacting consumers before 8 a.m. or after 9 p.m.
  • Failing to provide a written notice of the debt
  • Refusing to confirm the debt upon request

In addition, it is illegal in Iowa for debt collectors to threaten legal action if they do not intended to actually file a lawsuit.

Make Iowa debt collectors validate your debt.

Iowa’s FDCPA also protects you

Iowa’s iteration of the Fair Debt Collection Practices Act (IA-FDCPA), as outlined under Iowa Consumer Credit Code §537.7103, provides a similar set of statutory protections to Hawkeye consumers.

Here’s a summary of Iowa debt collection laws under IA-FDCPA:

  • No Illegal Threats or Force: Debt collectors can't use violence, make false criminal accusations, or threaten illegal actions to collect debts.
  • No Harassment or Abuse: They must not use offensive language, call without identifying themselves, make the debtor pay unnecessary communication costs, or repeatedly call at inconvenient times.
  • Privacy in Debt Information: Debt collectors can't share debt information with others without the debtor's permission, except in certain legal situations like reporting to credit agencies.
  • No Deceptive Practices: They shouldn't use false business names, fail to state they're collecting a debt, make false claims about debt information or legal actions, or pretend to be affiliated with the government.
  • Fair Communication and Charges: Debt collectors can't falsely claim a debt is secured by property, charge illegal fees, or add unauthorized interest. They should not contact debtors who have attorneys, unless necessary.
  • Adherence to Postal Laws: Debt collectors must follow U.S. postal laws in their written communications.
  • No Unfair Health Service Charges: They can't collect health service charges if there's an ongoing workers' compensation case.

These rules aim to ensure debt collectors act fairly, avoid deceptive practices, and respect the rights and privacy of debtors in Iowa.

You can be sued by a debt collector in Iowa

Depending on your unique circumstances, it is possible to be sued by a debt collector regarding an unpaid debt in Iowa. However, the debt collector is obligated to take specific steps when filing a lawsuit concerning an unpaid debt. For example, a debt collector must properly serve you with a Summons and Complaint.

Once you receive these court filings, you will be afforded the opportunity to respond via an Answer. If you respond to the debt collector’s lawsuit, then the case will be set for trial and pre-trial matters will commence, including discovery, settlement conferences, motions for summary judgment, and so forth.

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The statute of limitations on debt collection prevents unfair lawsuits in Iowa

Under Iowa law, the statute of limitations is five years for written and oral agreements, as outline by Iowa Code § 614.1(5)(a). This means that the debt collector is required to file a legal action to try and collect on a debt within five years of either the date of the last payment or the date of the last written agreement.

The table below further outlines the statute of limitations on different types of debt in Iowa:

Statute of Limitations on Debt in Iowa
Debt Type Deadline
Credit Card 5 years
Medical 5 years
Auto Loan 5 years
Student Loan 5 years
Mortgage 5 years
Personal Loan 5 years
Judgment 20 years
Source: Iowa Code § 614.1(5)(a) and § 614.1(6)

For example, if you signed a contract in 2017 and the debt collector files a legal action in 2022, that action would be considered a violation of the Iowa Code.

The law also states that the statute of limitations begins on the date of the last payment. For example, if the last payment was made in 2015 and the debt collector files a legal action in 2020, the action would also be considered a violation of the Iowa Code.

If the debt collector files a legal action to collect on a debt after the statute of limitations has expired, you have grounds to file a motion to dismiss the lawsuit on the basis of the statute of limitations.

Please bear in mind that the responsibility is with you to complete the necessary legal filings to raise the statute of limitations as an affirmative defense. This is important because some debt collectors will try to move forward with a lawsuit, even after the statute of limitations expired hoping you, or the court, will not identify the issue.

Respond to a debt lawsuit in Iowa.

Watch the following video to learn how to use the statute of limtiations as a defense in your case.

Protect yourself from unfair debt collectors in Iowa

If you find yourself being subjected to inappropriate debt collection practices, here are some steps you can take to protect yourself:

  1. Develop a base level of knowledge concerning the relevant laws and regulations related to debt collection in Iowa. By familiarizing yourself with the debt collection laws in the state, you can better protect yourself from being taken advantage of by a debt collector.
  2. Track the date, time and content of your communications with debt collectors.
  3. Consider filing a complaint with the Iowa Attorney General’s Office.
  4. The statute of limitations on most debt is five years in Iowa.
  5. Consider filing a civil lawsuit if you have evidence indicating the debt collector violated any provisions outlined in the FDCPA and/or IA-FDCPA.

Keep in mind that consumers can be eligible for up to $1,000 in remedies for violations of the FDCPA. You don’t have to sit back and take bad treatment from debt collectors. Knowing your rights makes it easier to defend yourself.

Key Takeaways

  • Iowa residents being hounded by debt collectors have legal rights and protections under both state and federal law, notably the FDCPA (both the landmark federal law and Iowa’s iteration of the law).
  • When you are contacted by a debt collector, ask for a debt validation letter to ensure the debt collector is actually pursuing the proper individual for the delinquency.
  • If you have evidence of a debt collector violating the FDCPA, you may have grounds to file a legal action seeking both monetary damages and injunctive relief that will cease any further inappropriate communications by the debt collector.

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