Use this debt collection guide to build a clear demand letter for Des Moines.
Des Moines Debt Collection: Your Complete Guide to Recovering Money Owed to You
When someone owes you money and won't pay, it can feel frustrating and unfair. Whether you're owed for a personal loan to a friend, payment for services you provided, rent from a former tenant, or a business invoice that's gone unpaid, understanding the legal process for collecting debts in Iowa is essential to recovering what's rightfully yours.
Iowa law provides creditors with clear procedures for collecting debts, from informal demand letters through court judgments and enforcement mechanisms. Des Moines residents who are owed money can leverage these legal tools to pursue payment effectively while staying within the bounds of the law. Understanding these procedures helps you determine the most efficient path to recovery.
This comprehensive guide is specifically designed for Des Moines area residents and businesses seeking to collect debts owed to them. We will explain Iowa's debt collection laws, walk you through the process of documenting your claim and demanding payment, describe your options for pursuing claims in Polk County courts, and provide specific information about judgment enforcement mechanisms available in Iowa.
Debt collection is fundamentally about converting an obligation into actual payment. The legal system provides structured mechanisms for doing this, from simple demand letters that often produce voluntary payment to court judgments that can be enforced through wage garnishment, bank levies, and property liens. Understanding these tools and using them strategically often produces results without the need for extensive litigation.
Iowa Debt Collection Laws: Understanding Your Rights as a Creditor
Iowa's legal framework provides creditors with multiple tools for collecting debts while also protecting debtors from abusive practices. Understanding these laws helps Des Moines creditors pursue collection effectively.
Contract Enforcement:
Most debts arise from contracts, whether written or oral. Iowa contract law provides for enforcement of valid agreements. Under the Statute of Frauds (Iowa Code Chapter 622), certain contracts must be in writing to be enforceable, but many debts arise from written or enforceable oral agreements.
Statute of Limitations:
The time limit for filing a lawsuit depends on the type of debt. Under Iowa Code Section 614.1(5), written contracts have a ten-year statute of limitations. Under Section 614.1(4), oral contracts have a five-year limitation. Open accounts (like credit cards) typically fall under the five-year period. Once the statute of limitations expires, you generally cannot sue to collect the debt.
Pre-Judgment Remedies:
Before obtaining a court judgment, Iowa law provides limited remedies. Under Iowa Code Chapter 639, prejudgment attachment may be available in certain circumstances, such as when the debtor is about to remove property from the state. However, these remedies require court approval and are only available in specific situations.
Judgments:
Once you obtain a court judgment, you have a legal determination that the debtor owes you money. Iowa judgments are valid for 20 years and can be renewed. Judgments accrue interest at the statutory rate, currently 5.0% per annum under Iowa Code Section 535.3.
Post-Judgment Collection:
Iowa provides several mechanisms for collecting on judgments. Wage garnishment under Iowa Code Chapter 642 allows you to intercept a portion of the debtor's wages. Bank account levy allows you to seize funds in the debtor's bank accounts. Property execution allows you to seize and sell the debtor's non-exempt property. Judgment liens attach to real property owned by the debtor.
Exemptions:
Iowa law protects certain property from collection. Under Iowa Code Chapter 627, exempt property includes a homestead exemption for residential property, personal property exemptions for clothing, household goods, and certain other items, pension and retirement accounts, and a portion of wages. Understanding these exemptions helps you target collectible assets.
Debt Collection Practices:
If you use a collection agency or are regularly engaged in debt collection, you must comply with federal and state fair debt collection practices laws. The federal Fair Debt Collection Practices Act (FDCPA) prohibits harassment, false statements, and unfair practices. Iowa Code Chapter 537 contains additional consumer protection provisions.
Small Claims Court:
Iowa Small Claims Court handles claims up to $6,500. This court provides a simplified process that doesn't require an attorney, making it accessible for smaller debt collection matters. Cases are typically heard quickly and judgments can be obtained efficiently.
Interest on Debts:
In Iowa, you can recover interest on debts if interest was part of your agreement or under statutory provisions. The default statutory interest rate is 5.0% per annum. If your contract specifies a different rate, that agreed rate generally applies.
Step-by-Step Guide to Collecting Debts in Des Moines
Collecting a debt requires systematic action that documents your claim and progressively increases pressure on the debtor. Follow these steps to maximize your chances of recovery.
Before taking any action, ensure you have complete documentation of the debt. Gather the original contract, promissory note, or written agreement; records of goods delivered or services performed; invoices sent; any communications acknowledging the debt; and records of payments made and amounts still owed. Calculate the total amount due including any agreed-upon interest or late fees.
Confirm that the statute of limitations hasn't expired. For written contracts in Iowa, you have ten years; for oral contracts, five years. Verify the debtor's identity and current contact information. Check whether the debtor has filed bankruptcy, which would stay collection efforts.
Before formal action, send a polite but firm payment request. Many debts are paid simply because the creditor asked. Send an email or letter stating the amount owed, the basis for the debt, a request for payment within a specified timeframe, and your contact information for questions or to arrange payment.
If informal requests don't produce payment, send a formal demand letter. The letter should identify the creditor and debtor, state the exact amount owed and how it was calculated, describe the basis for the debt (contract, services rendered, etc.), set a payment deadline (typically 10-14 days), warn of consequences if not paid (legal action, credit reporting, etc.), and be sent via certified mail for proof of delivery.
If the debtor acknowledges the debt but can't pay in full immediately, consider whether a payment plan is acceptable. Document any payment arrangement in writing, signed by the debtor. A partial payment plan may be preferable to protracted collection efforts, especially if the debtor's ability to pay is limited.
If demand letters don't produce results, file a lawsuit. For debts up to $6,500, use Iowa Small Claims Court in Polk County. Larger claims require District Court filing. Prepare your complaint stating the facts of the debt, attach documentation, and request the amount owed plus court costs and any applicable interest. File with the Polk County Clerk of Court and pay the filing fee.
After filing, the debtor must be properly served with the lawsuit. In Iowa, service can be made by the sheriff, a process server, or in some cases by certified mail. Proper service is essential - improper service can result in dismissal or a judgment that can be challenged.
For small claims cases, you'll have a hearing before a magistrate. Present your evidence clearly: the contract or agreement, proof of performance on your part, records of non-payment, and your demand letters. If the debtor doesn't appear, you'll likely receive a default judgment.
If successful, you'll receive a court judgment ordering the debtor to pay. The judgment specifies the principal amount, any awarded interest, and court costs. This judgment is now a legal determination that can be enforced through various mechanisms.
If the debtor doesn't pay voluntarily, use post-judgment collection remedies. File for wage garnishment to intercept the debtor's wages. Issue a bank levy to seize funds in the debtor's accounts. File judgment liens against real property. Work with the Polk County Sheriff's office to execute on non-exempt personal property. Be persistent - collection often takes time and multiple attempts.
Building Your Case: Essential Evidence for Debt Collection in Des Moines
The strength of your debt collection case depends on documentation. Comprehensive evidence proves the debt exists, establishes the amount owed, and demonstrates your attempts to collect.
Original Agreement Documentation:
The foundation of any debt claim is proof of the underlying agreement. Gather signed contracts or promissory notes, written loan agreements, invoices or statements of services, purchase orders or delivery receipts, email or text exchanges confirming the arrangement, and any amendments or modifications to the original terms.
Proof of Performance:
Demonstrate that you fulfilled your obligations. For loans, show proof the money was transferred - bank records, cancelled checks, wire transfer receipts. For goods, show delivery receipts, signed acknowledgments, or tracking confirmation. For services, document work performed through invoices, time records, or completion certificates.
Payment History:
Document the payment history including all payments received and dates, any bounced checks or failed payment attempts, communications about payment difficulties, and calculations showing the current balance due. A clear payment ledger helps establish exactly what's owed.
Communication Records:
Preserve all communications with the debtor. Emails, text messages, and letters acknowledging the debt are powerful evidence. Even communications disputing the amount can establish that a debt relationship exists. Document dates and content of phone conversations in written notes.
Demand Letters and Responses:
Keep copies of all demand letters sent, certified mail receipts and return receipts, any responses from the debtor, and documentation of when deadlines passed without payment.
Debtor Information:
Gather information that will help with collection. Current address, employer information, known bank accounts, and property ownership all help with enforcing any judgment obtained.
Calculation of Amounts:
Prepare a clear calculation showing original debt amount, any agreed interest, late fees if permitted by agreement, payments received and applied, and total current balance. Courts want to see exactly how you calculated your claim.
Witness Information:
If others witnessed the agreement or the debtor's acknowledgment of the debt, note their contact information. Witnesses can corroborate your testimony about the debt's existence and terms.
Bankruptcy Verification:
Before pursuing collection, check whether the debtor has filed bankruptcy. The federal PACER system allows bankruptcy filing searches. Collection against someone in bankruptcy violates the automatic stay and can result in sanctions.
Critical Deadlines for Debt Collection in Des Moines
Understanding deadlines is crucial for debt collection. Missing key dates can eliminate your ability to collect or require additional legal steps.
Statute of Limitations:
The most important deadline is the statute of limitations for filing suit. Under Iowa Code Section 614.1(5), written contract claims have a ten-year limitation. Under Section 614.1(4), oral contracts have five years. Open accounts typically have a five-year period. Once expired, you generally cannot sue to collect.
When the Clock Starts:
The limitation period typically begins when the debt becomes due - when payment was required but not made. For installment debts, each missed payment may start a separate limitation period. Partial payments or written acknowledgment of the debt may restart the clock.
Judgment Duration:
Iowa judgments are valid for 20 years from the date of entry. However, you must periodically renew execution efforts. Judgments can be renewed before expiration to extend their enforceability.
Judgment Interest:
Interest accrues on Iowa judgments from the date of entry at the statutory rate of 5.0% per annum, unless the underlying contract specified a different rate.
Garnishment Timeline:
Wage garnishments under Iowa Code Chapter 642 are ongoing until the judgment is satisfied. However, you must monitor for changes in the debtor's employment and file new garnishment orders if they change jobs.
Lien Duration:
Judgment liens in Iowa are effective for 10 years and can be renewed. File liens promptly to protect your priority against other creditors.
Bankruptcy Deadlines:
If the debtor files bankruptcy, automatic stay immediately halts collection. You may need to file a proof of claim in the bankruptcy case within deadlines set by the bankruptcy court (typically 90 days after the first meeting of creditors).
Key Dates to Track:
Date debt became due, statute of limitations expiration, demand letter dates and deadlines, court filing date, judgment date, garnishment and levy filing dates, and lien filing and renewal dates.
Common Mistakes to Avoid in Des Moines Debt Collection
Creditors pursuing debt collection often make mistakes that can undermine their efforts or create legal liability. Awareness of these pitfalls helps you collect more effectively.
Not Having Documentation:
The most common mistake is insufficient documentation. Without written proof of the debt, amount owed, and your attempts to collect, proving your case becomes difficult. Even informal loans between friends should be documented. Keep records from the beginning of any credit arrangement.
Waiting Too Long to Pursue Collection:
As time passes, debtors become harder to locate, evidence is lost, and the statute of limitations approaches. Begin collection efforts promptly when payments are missed. Don't let personal relationships or hope that payment will come delay necessary action.
Harassing or Threatening Debtors:
While firm collection efforts are appropriate, harassment, threats of violence, or false statements violate the Fair Debt Collection Practices Act and can expose you to liability. Keep communications professional. Never threaten actions you can't legally take.
Ignoring Bankruptcy Filings:
Continuing to collect from someone in bankruptcy violates the automatic stay and can result in sanctions. Always verify bankruptcy status before aggressive collection efforts. If a debtor files bankruptcy during your collection efforts, stop immediately and consult an attorney.
Suing in the Wrong Court:
Filing in the wrong court wastes time and money. For Iowa debts up to $6,500, use Small Claims Court. Larger debts require District Court. Verify jurisdiction rules before filing.
Failing to Serve Properly:
Improper service can result in dismissal or judgments that can be challenged. Use approved service methods and document service carefully. The Polk County Sheriff or licensed process servers are reliable options.
Not Following Up on Judgments:
Obtaining a judgment is only the first step. Many creditors get judgments but never collect because they don't pursue post-judgment remedies. File for garnishments, levies, and liens promptly after obtaining judgment.
Targeting Exempt Assets:
Iowa law protects certain assets from collection. Pursuing exempt property wastes resources and may result in sanctions. Understand exemptions before attempting to seize assets.
Not Renewing Judgments:
Iowa judgments last 20 years but collection mechanisms may need periodic renewal. Keep track of deadlines for renewing execution orders and liens.
Not Considering Cost-Benefit:
Some debts cost more to collect than they're worth. Consider whether the debt amount justifies the collection costs (filing fees, process server fees, attorney fees if any). For very small debts, the economics may not support formal legal action.
Frequently Asked Questions About Debt Collection in Des Moines
Under Iowa Code Section 614.1(5), you have ten years to sue on a written contract. Under Section 614.1(4), oral contracts have a five-year limitation. The clock typically starts when the debt becomes due - when payment was required but not made. Once the statute of limitations expires, you generally cannot sue to collect, though the debtor still morally owes the money.
Iowa Small Claims Court handles cases up to $6,500. If your debt exceeds this amount, you have two options: reduce your claim to $6,500 to use the simpler small claims process (foregoing the excess), or file in Iowa District Court for the full amount. District Court has more formal procedures and may benefit from attorney representation.
Yes, if interest was part of your agreement, you can charge the agreed rate. If no interest rate was specified but you have a written agreement, Iowa statutory interest of 5.0% per annum applies. Court judgments also accrue interest at the statutory rate from the date of judgment.
Iowa provides several post-judgment collection mechanisms. Wage garnishment intercepts a portion of the debtor's wages through their employer. Bank levies seize funds in the debtor's bank accounts. Judgment liens attach to real property. Personal property execution allows seizure of non-exempt assets. Work with the Polk County Sheriff and Clerk of Court to execute these remedies.
If the debtor is judgment-proof (has no collectible assets), collection may be difficult or impossible in the short term. However, Iowa judgments last 20 years and accrue interest. The debtor's situation may change - they may get a job, inherit property, or acquire assets. Monitor the debtor's situation and pursue collection when circumstances permit.
Yes, Iowa permits wage garnishment under Iowa Code Chapter 642. Once you have a judgment, you can file garnishment paperwork with the debtor's employer. Iowa limits garnishment to 25% of disposable earnings or the amount by which weekly earnings exceed 40 times the federal minimum wage, whichever is less. Certain income sources may be exempt.
For small claims (up to $6,500), you don't need a lawyer and can represent yourself. The small claims process is designed for non-attorneys. For larger claims in District Court, attorney representation is not required but may be beneficial given the more complex procedures. Consider whether the debt amount justifies legal fees.
If the debtor disputes the debt, you'll need to prove your claim in court. Strong documentation is essential - contracts, invoices, delivery receipts, and communications. If the debtor raises valid defenses (they've already paid, the goods were defective, etc.), a judge will evaluate the evidence and decide. Prepare to present your documentation and respond to their arguments.
What to Expect When Collecting Debts in Des Moines
Understanding realistic outcomes helps you approach debt collection with appropriate expectations.
Voluntary Payment Rates:
Many debts are paid after a single demand letter, especially when the debtor has the means to pay and simply needed a reminder or push. Professional demand letters citing legal consequences often produce better results than informal requests. Expect some portion of debtors to pay voluntarily to avoid court.
Negotiation Outcomes:
Some debtors will negotiate even if they can't pay in full. You may recover more by accepting a lump-sum settlement for less than the full amount or establishing a payment plan. Consider whether partial recovery now is better than uncertain full recovery later.
Court Judgment Success:
If you have good documentation and the debtor has no valid defense, obtaining a judgment is usually straightforward. Default judgments are common when debtors don't respond to lawsuits. Contested cases require presenting evidence, but documented debts typically result in judgments for the creditor.
Collection Rates:
Having a judgment and collecting on it are different matters. Industry statistics suggest that creditors with judgments collect somewhere between 30-70% of amounts owed, depending on the debtor population and collection efforts. Persistent, systematic collection efforts improve outcomes.
Timeline Expectations:
Demand letter response: 1-4 weeks. Small claims court from filing to judgment: 2-3 months. Post-judgment collection: Ongoing, potentially months to years for full recovery. Wage garnishment: Gradual collection over time from each paycheck.
Cost-Benefit Considerations:
Filing fees, process server costs, and time investment should be weighed against the debt amount. For very small debts, the costs may exceed potential recovery. For larger debts, the investment in proper collection usually pays off.
Judgment-Proof Debtors:
Some debtors have no collectible assets. Judgments against these individuals may be uncollectible in the short term but can be pursued if their circumstances change. Iowa judgments last 20 years.
Des Moines Debt Collection Resources and Contacts
Des Moines creditors have access to numerous resources:
For filing small claims and district court cases.
Address: 500 Mulberry Street, Des Moines, IA 50309
Phone: (515) 286-3772
Website: www.iowacourts.gov
For serving court papers and executing judgments.
Address: 1985 NE 51st Place, Des Moines, IA 50313
Phone: (515) 286-3333
For filing financing statements and searching for liens.
Phone: (515) 281-5204
Website: www.sos.iowa.gov
Free legal assistance for qualifying individuals.
Phone: (800) 532-1275
Website: www.iowalegalaid.org
Lawyer referral service.
Phone: (515) 243-3179
Website: www.iowabar.org
For checking bankruptcy filings.
Website: www.pacer.gov
The Debt Collection Playbook
Proof is Power
Contracts, invoices, texts, emails… gather all evidence of the debt.
Time is Your Ally (and Their Enemy)
Interest accrues. Late fees may apply. The longer they wait, the more they may owe.
Track Every Penny
Principal, interest, late fees… don't miss a dollar.
The Debtor's Options
Many states allow you to recover collection costs, including attorney fees in some cases. Know your rights.
Iowa Debt Collection Laws
Applicable Laws
- FDCPA
- Iowa Debt Collection Practices Act - Iowa Code § 537.7101
Small Claims Limit
$6,500
Consumer Protection Agency
Iowa AG / CFPB
Collection Combat FAQ
When should I send a demand letter?
After the second broken payment promise. Don't let them string you along indefinitely.
What if they ignore my demand?
Small claims court is your next step. The filing fee is often recoverable, and you don't need a lawyer.
How do I prove they owe me money?
Contracts, invoices, text messages, emails, bank transfers, promissory notes, or witness statements all help prove the debt.
Can I charge interest?
Yes, if your contract includes interest terms. Even without a contract, many states allow pre-judgment interest on debts.
What about collection costs?
Many contracts allow recovery of collection costs and attorney fees. Check your agreement and state law.
Is there a time limit to collect?
Yes. Statutes of limitation vary by state and debt type, typically 3-6 years. File suit before the deadline expires.
What if they claim they already paid?
Demand proof. Bank records, cancelled checks, or receipts should show payment. If they can't prove it, they still owe you.
About FreeDemandLetter
FreeDemandLetter provides free, AI-powered demand letter generation with location-specific legal citations. Our content is reviewed by subject matter specialists and regularly updated to reflect current laws. We help thousands of people resolve disputes effectively—but we're not lawyers, and this isn't legal advice. For complex situations, consult a licensed attorney in your jurisdiction.