Repossession Laws in Iowa

When Can My Car Be Repossessed in Iowa? 

Your car can be repossessed once you’re in default on the car loan.

🗓️ In Iowa, you're not legally in default on a car loan until you're more than 10 days late on a payment. That 10-day timeline works like a short grace period. 

You can also be in default for other reasons, like not maintaining insurance or violating terms in your loan agreement.

Once you're in default, the lender has to follow a specific process before they can repossess your car. This is spelled out in state law. 

📄 The process includes sending a right-to-cure notice that gives you a chance to fix the issue. If you don’t take action, the lender may be allowed to repossess the car — even if you’ve only missed one payment.

📌 If you've already received a right-to-cure notice in the past 12 months for the same loan, your lender may not have to send another one before repossessing your car.

Will I Be Notified Before the Repossession? How?

In most cases, you’ll be notified before a repossession, but not necessarily right before the car is taken.

The right-to-cure notice your lender must send before repossessing your vehicle gives you 20 days to catch up on missed payments or fix whatever caused the default. This is often the only warning you'll get.

If you don’t act within the 20-day window, the lender can move forward with repossession without sending additional notice or getting a court order.

How Can I Prevent a Repossession?

If you've fallen behind on your car loan, you may still have time to avoid a repossession, especially if it’s your first missed payment. 

⌛ In most cases, you’ll have about 30 days from the missed payment to catch up before your lender can legally take the car. That time can give you some breathing room to look at your options and take action.

If you can’t catch up on your payments right away, it may still help to call your lender. Since repossession can be costly and time-consuming, many lenders are open to exploring other solutions. They may offer a modified payment plan or temporarily pause your payments.

🚗 If you know you just can’t afford the car anymore, you might consider voluntary repossession, where you return the car yourself. This won’t erase the loan, but it could reduce the extra fees and stress that come with a forced repossession.

If you’re struggling with your car loan and a lot of other debts, you can also explore Chapter 7 bankruptcy. Once you file, an automatic stay takes effect and temporarily stops repossession and other collection efforts. Bankruptcy may also help wipe out other debts so you can afford your car payments or walk away from the car and the debt entirely.

✨ Upsolve is a nonprofit that helps people file Chapter 7 bankruptcy for free. It only takes a few minutes to see if you qualify to use our free filing tool.

What Can Repo Companies in Iowa Do? 

✅ Repo companies can take your car without your permission if it’s in a public or open space, like a street, parking lot, or your driveway. 

❌ But they can’t enter your garage, go behind a locked gate, or other secured areas unless you give them permission.

Repo agents don’t need a special license to operate in Iowa, but they do have to follow the law. Most importantly, they aren’t allowed to breach the peace. 

That means they can’t use force, threats, lies, or cause a dangerous or aggressive situation while repossessing your car. If you ask a repo agent to leave and they ignore you, that might be considered a breach of the peace.

What About the Personal Property in My Car? 

If you think your car might be repossessed, it's a good idea to remove all personal items from the vehicle as soon as possible. That way, you won’t have to deal with the hassle of getting them back later.

If your car has already been repossessed with your belongings inside, contact your lender right away and ask how to retrieve your property. They should let you know when and where you can pick it up. While they’re allowed to charge a storage fee, they can’t charge you just to return your items.

What Happens After a Repossession in Iowa? 

After your car is repossessed, your lender can keep the car to settle the debt, but they usually sell it at auction. 

📄Before the sale happens, you should receive a notice with important details, including:

• The date, time, and location of the auction (if it’s a public sale)

• How much you’d need to pay to get the car back before the sale

• Whether you’ll still owe money after the sale

• Contact info if you have questions or want more information

You have the right to attend the sale or try to get the car back before it’s sold by paying the required amount — usually what you owe on the loan, plus repossession and storage fees.

✍️ In some cases, the lender may offer to keep the car instead of selling it. But under Iowa law, they can only do this if you agree to it in writing after the repossession.

If you’ve already paid at least 60% of the loan balance, the lender is legally required to sell the car within 90 days, unless you give them written permission to keep it. This rule is meant to protect you from losing your car without getting credit for its fair value.

💰 No matter how the car is sold, the lender must try to get a fair price. This is called a commercially reasonable sale. The price should reflect the car’s market value, considering its condition and the circumstances.

Do I Still Owe After a Repossession in Iowa? 

Many people still owe money after their vehicle is repossessed. This will depend on how much the lender sells your car for and how much you owe on the loan.

After the sale, the lender uses the funds to pay off any repossession and storage costs (like towing or repo company fees) first. Then, they’ll pay expenses related to the sale itself, such as advertising, minor repairs, or auction fees. If anything is left, it goes toward the balance of your loan.

If the sale price doesn’t cover everything, you’ll owe the difference. This is called a deficiency balance.

If you don’t pay the deficiency balance, your lender can sue you to collect it. If they win, they can get a deficiency judgment and get access to serious collection measures like wage garnishment.

Chapter 7 bankruptcy can wipe out a deficiency balance along with other consumer debts. If you’re considering filing, Upsolve’s free tool can help you navigate the process without a lawyer.

Can I Get My Car Back After a Repossession in Iowa? 

The notification your lender sends you after your car is repossessed should include information on how to get the car back before it’s sold. 

💡 This process is called redemption. It usually requires paying the full amount you owe on the loan, along with repossession-related costs like towing, storage, and other fees.

For most people, coming up with that kind of money on short notice is difficult. If you can’t redeem the car and it’s sold, you usually can’t get it back post-sale.

Where Can I Find More Information About Repossession Laws in Iowa? 

If you're looking for more help or want to dive deeper into your rights, these resources can give you reliable information and connect you with local support:

• Iowa Legal Aid provides free civil legal help to underserved Iowans, plus a helpful FAQ on auto repossession.

• Polk County Bar Association Volunteer Lawyers Project provides volunteer attorneys to represent low-income individuals in civil legal matters in Iowa.

• 211 Iowa connects you with local help through a database to find the best resources for your needs.

🏛️ The Iowa Consumer Credit Code (Chapter 537, Sections 537.5109–537.5111) contains statutes related to repossession, including default and the right to cure. The Iowa Uniform Commercial Code (Title 14, Sections 554.9609–554.9627) covers repossession, sale of collateral, and deficiency balances.