Iowa Debt Collection Laws: What Collectors Can and Can't Do

A debt collector just called you three times before breakfast. They told your neighbor you owe money. They threatened to garnish your wages tomorrow if you don't pay today.

None of this is legal in Iowa.

Both federal and state law give you concrete rights when dealing with debt collectors. These aren't vague protections. They're specific rules with real penalties when collectors violate them. If you know the rules, you can stop the harassment and fight back.

Two Laws Protect Iowa Consumers From Debt Collectors

You're covered by two separate laws: the federal Fair Debt Collection Practices Act (FDCPA) and Iowa's Consumer Credit Code section 537.7103. Both laws apply to third-party debt collectors—agencies hired to collect debt for someone else. Original creditors (like your credit card company) have more leeway under federal law, but Iowa state law often restricts them too.

The FDCPA has been federal law since 1977. Iowa's version mirrors it but adds extra protections specific to the state.

Who These Laws Cover

The rules apply to debt collectors, not the original creditor in most cases. That means if Chase Bank is calling about your Chase credit card, the FDCPA doesn't apply. But if Chase hires a collection agency to chase you down, that agency must follow both laws.

Iowa's law sometimes goes further and covers original creditors too. If a creditor uses threats or harassment, you can argue they violated Iowa's consumer protection statutes even if they technically dodge the FDCPA.

What Debt Collectors Cannot Do in Iowa

Federal and Iowa law ban specific tactics. Collectors cannot:

• Call you before 8 a.m. Or after 9 p.m. in your time zone. If you work night shifts and sleep during the day, tell them your inconvenient hours in writing. They must stop calling during those times.
• Contact you at work once you tell them your employer prohibits personal calls. Send this in writing to create a paper trail.
• Discuss your debt with third parties. Calling your neighbor, boss, or cousin to shame you into paying is illegal. Collectors can contact others only to locate you, and they can't reveal you owe money.
• Use obscene, profane, or abusive language. This includes repeated calls designed to harass you.
• Threaten violence or criminal prosecution. Not paying a debt is not a crime in Iowa. Debt collectors have no power to arrest you.
• Make false statements. They can't claim to be attorneys if they aren't. They can't say you'll be arrested. They can't inflate the amount you owe by adding fake fees.
• Threaten to garnish wages or seize property unless they actually intend to sue you and have legal grounds to do so. Empty threats violate both the FDCPA and Iowa law.

The Validation Notice Requirement

Within five days of first contacting you, collectors must send a written validation notice. This notice must include:

• The amount you allegedly owe
• The name of the original creditor
• Instructions on how to dispute the debt in writing

If they don't send this notice, they've violated federal law. If you dispute the debt in writing within 30 days, they must stop collection efforts until they mail you verification,like a copy of the original contract or account statements.

Iowa's 5-Year Statute of Limitations on Debt

Iowa has one of the shortest statutes of limitations in the country: five years for written contracts, which includes most credit card debt, personal loans, and medical bills.

The clock starts on the date of your last payment or last account activity. Once five years pass, the debt becomes time-barred. Collectors can still ask you to pay, but they cannot sue you and win.

What Happens If They Sue Anyway

Collectors sometimes file lawsuits on time-barred debt hoping you won't respond. If you ignore the lawsuit, the court issues a default judgment and the collector wins. That judgment revives the debt for another 20 years under Iowa law.

You must respond to the lawsuit and raise the statute of limitations as an affirmative defense. The judge will dismiss the case if the debt is too old. Never assume the court will notice the debt is time-barred. You have to tell them.

Worried about a debt lawsuit? Our bankruptcy screener can help you figure out whether bankruptcy or another option makes more sense for your situation.

How to Stop Debt Collector Contact

You can make collectors stop calling you. Send a letter (certified mail, return receipt requested) that says "Stop contacting me." Under the FDCPA, they must stop all communication except to notify you of specific actions like filing a lawsuit.

Stopping contact doesn't erase the debt. It just stops the noise. Collectors can still sue you. But if the calls are overwhelming and you need space to figure out your next move, this buys you time.

Sample Cease Contact Letter

Keep it simple:

[Your Name]
[Your Address]
[Date]

[Collector Name]
[Collector Address]

Re: Account Number [XXX]

This is my formal request that you stop all communication with me regarding the above account, as is my right under 15 U.S.C. § 1692c(c) of the Fair Debt Collection Practices Act.

Sincerely,
[Your Signature]

Mail it. Keep a copy. If they contact you after that, you have proof they violated federal law.

What to Do If a Collector Violates the Law

Document everything. Save voicemails. Screenshot caller IDs showing calls before 8 a.m. Or after 9 p.m. Write down the names of anyone they contacted about your debt. Keep copies of all letters.

File a Complaint

You have three options:

• File a complaint with the Consumer Financial Protection Bureau (CFPB). Go to consumerfinance.gov/complaint. The CFPB tracks patterns of abuse and can force agencies to change their practices.
• File a complaint with the Iowa Attorney General's Consumer Protection Division. Call 515-281-5926 or visit iowaattorneygeneral.gov.
• Sue the collector yourself. The FDCPA allows you to recover up to $1,000 in statutory damages per violation, plus actual damages (like emotional distress), plus attorney fees. Many consumer rights attorneys take these cases on contingency, meaning you don't pay unless you win.

Iowa law also allows you to recover damages for violations of state debt collection rules. You can pursue both federal and state claims in the same lawsuit.

If You're Already Being Sued for Debt in Iowa

Getting sued is different from getting collection calls. Once a lawsuit is filed, ignoring it guarantees you lose. Iowa courts give collectors default judgments in roughly 70% of debt cases because defendants don't respond.

You typically have 20 days from the date you're served to file an Answer with the court. Your Answer should include any defenses you have: the statute of limitations expired, you already paid the debt, the amount is wrong, you never opened the account.

Common Defenses in Iowa Debt Lawsuits

• Statute of limitations. If the last payment was more than five years ago, the debt is time-barred.
• Lack of standing. The collector must prove they own the debt and have the legal right to sue you. Many debt buyers can't produce the original contract.
• Incorrect amount. Collectors often tack on interest and fees that aren't allowed under Iowa law or your original agreement.
• Identity theft or mistaken identity. If the debt isn't yours, say so in your Answer and demand proof.

If the debt is legitimate and you can't afford to pay it, bankruptcy might be the better option. Chapter 7 bankruptcy wipes out most unsecured debt in 4-6 months. If you're being sued, filing bankruptcy triggers an automatic stay that stops the lawsuit immediately.

When Bankruptcy Makes More Sense Than Fighting Collectors

Fighting one debt collector is manageable. Fighting five while juggling three lawsuits and a potential wage garnishment is not. If your total debt exceeds what you can realistically pay in the next two years, bankruptcy might be the fastest way out.

Chapter 7 bankruptcy in Iowa eliminates credit card debt, medical bills, personal loans, and old utility bills. It stops wage garnishment and lawsuits. The entire process takes about four months if you qualify.

Iowa's bankruptcy exemptions let you protect:

• Unlimited home equity if you've owned the home for at least 40 months
• $7,000 in personal property (or $15,000 if you don't claim a homestead exemption)
• Your car up to $7,000 in value
• Retirement accounts

Most people in Iowa who file Chapter 7 keep everything they own.

Get Help Before Making a Decision

You don't have to figure this out alone. If you're being harassed by collectors, sued for old debt, or considering bankruptcy, start with accurate information about your options.

We can help you explore what makes sense for your situation. Our bankruptcy screener walks you through your debts, assets, and income to show whether bankruptcy,or another solution,fits your life.

Check your bankruptcy options in Iowa in about five minutes. No sales pitch. No obligation. Just clear answers about what you can do next.