Iowa Debt Collection Laws: Time Limits, Garnishment and Your Rights
Iowa debt rules: statute of limitations, wage garnishment limits, protected bank and home exemptions, judgments, collector rules and how to answer a debt lawsuit.
Quick answers for Iowa
- Time limit to sue on a written contract
- 10 years for actions founded on written contracts. Claims for unpaid rent have a separate 5-year limit. Iowa Code § 614.1(5)
- Wage garnishment limit
- The federal limit applies, and Iowa adds yearly caps per creditor based on the worker's expected annual earnings: $250 if under $12,000; $400 for $12,000-$15,999; $800 for $16,000-$23,999; $1,500 for $24,000-$34,999; Iowa Code § 642.21
- Money protected in a bank account
- Up to $1,000 in total in cash, bank deposits, credit union accounts or any other personal property is exempt. Iowa Code § 627.6(14)
- Answering a debt lawsuit
- In a small claims case (up to $6,500), a defendant served in Iowa must appear within 20 days after service, usually by filing the Appearance and Answer form. Otherwise a default judgment may be entered. Iowa Code §§ 631.4(1), 631.5(6); Iowa Judicial Branch, Small Claims
Last verified: 2026-10-26
Time limits
| Time limit to sue on a written contract | 10 years for actions founded on written contracts. Claims for unpaid rent have a separate 5-year limit. Iowa Code 2026 text. Source: Iowa Code § 614.1(5) |
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| Time limit for credit cards and open accounts | 5 years for actions founded on unwritten contracts, which can include open accounts that are not based on a signed written agreement. Source: Iowa Code § 614.1(4) |
| Can a payment restart the clock? | A contract debt is revived by a written admission, signed by the debtor, that the debt is unpaid, or by a similar signed written promise to pay. The statute does not address partial payments. Source: Iowa Code § 614.11 |
| How long a judgment lasts | An action on a judgment of an Iowa court of record must be brought within 20 years. A judgment is a lien on the debtor's real estate for 10 years from the date of judgment; it does not attach to a protected homestead. § 624.23: https://www.legis.iowa.gov/docs/code/624.23.pdf Source: Iowa Code § 614.1(6); § 624.23 |
If you are sued
| Answering a debt lawsuit | In a small claims case (up to $6,500), a defendant served in Iowa must appear within 20 days after service, usually by filing the Appearance and Answer form. Otherwise a default judgment may be entered. |
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Garnishment and what creditors can't take
| Wage garnishment limit | The federal limit applies, and Iowa adds yearly caps per creditor based on the worker's expected annual earnings: $250 if under $12,000; $400 for $12,000-$15,999; $800 for $16,000-$23,999; $1,500 for $24,000-$34,999; $2,000 for $35,000-$49,999; and 10% of expected earnings for $50,000 or more. Support orders are treated differently. Source: Iowa Code § 642.21 |
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| Money protected in a bank account | Up to $1,000 in total in cash, bank deposits, credit union accounts or any other personal property is exempt. Source: Iowa Code § 627.6(14) |
| Homestead exemption | No dollar limit. The homestead is exempt from judicial sale, limited by size: up to one-half acre within a city plat, or up to 40 acres elsewhere. One homestead per household. § 561.2: https://www.legis.iowa.gov/docs/code/561.2.pdf. Some debts (such as purchase-money debts) can reach the homestead under other sections. Source: Iowa Code §§ 561.16, 561.2 |
| Vehicle exemption | The debtor's interest in one motor vehicle, up to $7,000 in value. Source: Iowa Code § 627.6(9) |
| Claiming an exemption | When a bank account or other non-wage property is garnished, the creditor must serve the debtor with a notice of garnishment and levy within 7 business days after the garnishee's answer. The notice explains the right to claim exemptions and to a prompt hearing before a judge. The debtor claims exemptions by filing a motion or other pleading with the court; otherwise the money may be applied to the judgment. Source: Iowa Code § 642.14A |
| Bankruptcy exemptions | Iowa has opted out of the federal exemptions. Iowa debtors must use Iowa exemptions in bankruptcy. Source: Iowa Code § 627.10 |
Debt collectors and interest
| State debt collection law | Yes. The Iowa Debt Collection Practices Act (part of the Iowa Consumer Credit Code) bans illegal threats, coercion, harassment and misleading practices by any 'debt collector', defined to include anyone collecting a debt for themselves, their employer or others. It therefore covers original creditors. § 537.7102: https://www.legis.iowa.gov/docs/code/537.7102.pdf |
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| Debt collector licensing | No license, but debt collectors that collect more than a threshold amount must file a notification with the Consumer Credit Code administrator within 30 days after starting business in Iowa and every January 31 after that. § 537.6201: https://www.legis.iowa.gov/docs/code/537.6201.pdf. The current threshold amount was not confirmed. |
| Interest rate limits | Judgment interest is the one-year Treasury constant maturity rate plus 2%, set as of the judgment date. If the judgment is on a contract that fixes a rate, the contract rate applies, up to Iowa's legal maximum. § 535.3: https://www.legis.iowa.gov/docs/code/535.3.pdf. The state court administrator publishes the rate monthly. |
Where to get help in Iowa
- Iowa Attorney General, Consumer Protection Division (administers the Iowa Consumer Credit Code, including debt collector notification)
- File a complaint or claim
Debt & Collections FAQ
What is the statute of limitations on debt in Iowa?
10 years for actions founded on written contracts. Claims for unpaid rent have a separate 5-year limit.
How long can a creditor sue on a credit card debt in Iowa?
5 years for actions founded on unwritten contracts, which can include open accounts that are not based on a signed written agreement.
Does making a payment restart the statute of limitations in Iowa?
A contract debt is revived by a written admission, signed by the debtor, that the debt is unpaid, or by a similar signed written promise to pay.
How long does a court judgment last in Iowa?
An action on a judgment of an Iowa court of record must be brought within 20 years. A judgment is a lien on the debtor's real estate for 10 years from the date of judgment; it does not attach to a protected homestead.
How much of my wages can be garnished in Iowa?
The federal limit applies, and Iowa adds yearly caps per creditor based on the worker's expected annual earnings: $250 if under $12,000; $400 for $12,000-$15,999; $800 for $16,000-$23,999; $1,500 for $24,000-$34,999; $2,000 for $35,000-$49,999; and 10% of expected earnings for $50,000 or more. Support orders are treated differently.
How much money in a bank account is protected from creditors in Iowa?
Up to $1,000 in total in cash, bank deposits, credit union accounts or any other personal property is exempt.
What is the homestead exemption in Iowa?
No dollar limit. The homestead is exempt from judicial sale, limited by size: up to one-half acre within a city plat, or up to 40 acres elsewhere. One homestead per household.
Can a creditor take my car in Iowa?
The debtor's interest in one motor vehicle, up to $7,000 in value.
What debt collection practices are illegal in Iowa?
Yes. The Iowa Debt Collection Practices Act (part of the Iowa Consumer Credit Code) bans illegal threats, coercion, harassment and misleading practices by any 'debt collector', defined to include anyone collecting a debt for themselves, their employer or others. It therefore covers original creditors.
Do debt collectors need a license in Iowa?
No license, but debt collectors that collect more than a threshold amount must file a notification with the Consumer Credit Code administrator within 30 days after starting business in Iowa and every January 31 after that.
What is the maximum legal interest rate in Iowa?
Judgment interest is the one-year Treasury constant maturity rate plus 2%, set as of the judgment date. If the judgment is on a contract that fixes a rate, the contract rate applies, up to Iowa's legal maximum.
How do I respond to a debt collection lawsuit in Iowa?
In a small claims case (up to $6,500), a defendant served in Iowa must appear within 20 days after service, usually by filing the Appearance and Answer form. Otherwise a default judgment may be entered.
How do I stop a garnishment or claim an exemption in Iowa?
When a bank account or other non-wage property is garnished, the creditor must serve the debtor with a notice of garnishment and levy within 7 business days after the garnishee's answer. The notice explains the right to claim exemptions and to a prompt hearing before a judge. The debtor claims exemptions by filing a motion or other pleading with the court; otherwise the money may be applied to the judgment.
Which bankruptcy exemptions can I use in Iowa?
Iowa has opted out of the federal exemptions. Iowa debtors must use Iowa exemptions in bankruptcy.
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General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.