Debt Collection Laws in Iowa

If you're dealing with debt collection in Iowa, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.

How much of my paycheck can be garnished in Iowa?

Iowa doesn't cap wage garnishment as a percentage of your paycheck — it caps it as a flat dollar amount per year, per creditor, on a sliding scale tied to how much you earn: as little as $250 a year if you make under $12,000, rising in steps to 10% of expected earnings if you make $50,000 or more.

Iowa Code § 642.21 sets six income brackets. Earning under $12,000 a year caps a single judgment creditor's garnishment at $250 for the entire calendar year; $12,000–$15,999 caps it at $400; $16,000–$23,999 at $800; $24,000–$34,999 at $1,500; $35,000–$49,999 at $2,000; and $50,000 or more caps it at 10% of expected annual earnings. These are annual aggregate dollar ceilings, not per-paycheck percentages, and they apply separately to each judgment creditor — so someone with two separate judgments against them can have each creditor garnish up to that year's cap.

The statute also borrows the federal Consumer Credit Protection Act's disposable-earnings floor, and whichever rule leaves the debtor with more money controls for any given paycheck. Separate, higher limits apply outside ordinary consumer debt — child support and some other statutory categories (chapter 252D and Iowa Code §§ 598.22, 598.23, 627.12) aren't governed by this cap. Employers who withhold more than the law allows, mishandle garnished wages, or fire someone over a garnishment face liability under subsection 2 of the same section.

• Iowa Code § 642.21

Can a creditor take money from my bank account in Iowa?

Iowa protects up to $1,000 of cash, bank deposits, or other personal property sitting in your account — a modest, catch-all wildcard cushion rather than a dedicated bank-account exemption.

Iowa Code § 627.6(14) exempts the debtor's interest, not exceeding $1,000 in the aggregate, in 'any cash on hand, bank deposits, credit union share drafts, or other deposits, wherever situated, or in any other personal property whether otherwise exempt or not' under the general exemptions chapter. In practice that means the $1,000 figure is a single pool that covers whatever combination of cash and ordinary bank balance the debtor wants to shield — it isn't stacked on top of the specific-item exemptions (vehicle, tools of the trade, household goods, etc.) listed elsewhere in § 627.6, though it can be used to top up value in a category that's already maxed out.

Wages already deposited lose their separate wage-garnishment protection under § 642.21 once they land in the account — the $1,000 general exemption is what's left to protect ordinary checking or savings balances beyond that.

• Iowa Code § 627.6

Is my home protected from creditors in Iowa?

Iowa's homestead exemption is unlimited in dollar value — a debtor's home equity is fully protected from judicial sale no matter how large — but the protected footprint is capped by acreage: half an acre inside a city plat, or up to 40 acres outside one.

Iowa Code § 561.2 sets the size limits: a homestead within a city plat can't exceed one-half acre, and elsewhere it can't exceed 40 acres in the aggregate (with a narrow historical carve-out letting a homestead worth under $500 be enlarged to reach that value, a figure that's effectively obsolete at current property values). Iowa Code § 561.16 is the operative exemption: it shields the homestead from judicial sale with no dollar ceiling, but limits each household to one homestead exemption — a group of people who habitually reside together as a single household unit, related or not, can only claim one homestead between them.

The unlimited-value protection is one of the most debtor-friendly in the country, but it isn't absolute: it doesn't defeat a mortgage, mechanic's lien, or other consensual or statutory lien on the property, and it can be waived or subordinated by the owner's own agreement.

• Iowa Code § 561.2
• Iowa Code § 561.16

How long can a debt collector sue me in Iowa?

Iowa gives a creditor 10 years to sue on a written contract but only 5 years on an unwritten one, like most open-account credit card debt — both longer than the national norm, with the open-account gap being the one most people don't expect.

Iowa Code § 614.1(5)(a) sets a 10-year period for actions founded on written contracts. Subsection 4 sets a 5-year period for actions 'founded on unwritten contracts' and other claims not otherwise addressed — most revolving credit card debt is litigated as an open account or unwritten obligation, which puts it in the 5-year bucket even though many people assume all credit-card debt gets the longer written-contract clock. Subsection 6 gives a judgment itself a 20-year shelf life once a creditor has already won in court.

Whether a specific credit card or line-of-credit balance counts as 'written' depends on whether there's a signed writing establishing the specific obligation sued on, not just a cardholder agreement mailed at account opening — this is fact-specific and frequently disputed in Iowa collection litigation.

• Iowa Code § 614.1

Does Iowa have its own debt collection law beyond the federal FDCPA?

Iowa's debt-collection law is broader than the federal FDCPA in one important way: it doesn't just cover third-party collection agencies — it applies to original creditors collecting their own debts, too.

Iowa Code § 537.7102 defines 'debt collector' as any person engaging, directly or indirectly, in debt collection, 'whether for the person, the person's employer, or others' — a deliberately broad definition that sweeps in original creditors collecting their own accounts, not just hired collection agencies and debt buyers the way the federal FDCPA's narrower definition does. Iowa Code § 537.7103 then lays out the prohibited conduct: illegal threats or coercion (including false threats of arrest or property seizure), oppression and harassment (obscene language, repeated calls at inconvenient hours, undisclosed-caller tactics), improper disclosure of the debt to third parties, fraudulent or deceptive representations (misrepresenting the amount or status of a debt, impersonating a court document, failing to identify as a debt collector), collecting unauthorized fees or interest, and contacting a debtor known to be represented by an attorney.

Remedies run through Iowa Code § 537.5201: a consumer can recover actual damages plus a statutory penalty set by the court between $100 and $1,000 per violation (outside a class action) for a § 537.7103 violation, with a filing deadline — generally one year after the last scheduled payment due date for most consumer credit transactions, or two years for open-end credit violations. Iowa also runs a separate debt collector notification/registration program through the Attorney General's office, which is a licensing requirement layered on top of the substantive conduct rules in § 537.7103.

• Iowa Code § 537.7102 (definitions)
• Iowa Code § 537.7103 (prohibited practices)
• Iowa Code § 537.5201 (remedies)

Where can I find free or low-cost legal help in Iowa?

If you're dealing with a debt lawsuit, garnishment, or collector dispute in Iowa, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.

• Iowa State Bar Association — Find-A-Lawyer Program
• Iowa Legal Aid — Illegal Debt Collection Conduct