Wage Garnishment in Iowa

If you work in Iowa and have debt you can’t pay, a creditor may pursue a wage garnishment against you. If successful, this will reduce your take-home pay and put a serious damper on your budget. In this article, we’ll help you learn more about wage garnishment in the Hawkeye State.

What Is Wage Garnishment?

Wage garnishment is a method creditors use to collect debt from your paycheck. For most debts, creditors must get a court order to garnish your paycheck. This includes credit card debt, medical bills, personal loans, mortgages, payday loans, rent, and auto loans. When the government collects on debts like back taxes, federal student loans, and child support, it doesn’t have to get a court order.

Iowa state laws and federal laws limit when how much of your wages creditors can garnish and when. You can find Iowa’s state laws on garnishment in Chapter 626 of the Iowa codes and the Iowa Consumer Credit Code in Chapter 537. The Consumer Credit Protection Act (CCPA) is the major federal law that regulates wage garnishment. When there’s a conflict between state and federal laws, the lesser garnishment amount must apply. 

Who Can Garnish My Wages in Iowa?

A creditor, debt collector, or debt buyer with a judgment from the court can garnish your wages in Iowa. 

Federal debts, such as IRS debt and student loan debt, have their own special rules. The government doesn’t need a court order to garnish your wages to collect on these debts.

Child support in Iowa is also subject to special rules. If you have no other dependents and owe back child support, up to 60% of your wages can be garnished without a court order. If you’re already supporting a spouse or other child, only up to 50% of your wages can be garnished. When a court order for child support payments in Iowa is issued, it comes with an additional order that gives permission for the child’s parent to garnish wages when child support payments fall behind. 

Iowa also has rules for non-special debts that do not apply to child support and alimony. For instance, there is a limit to how much of your wages can be deducted in a single year for consumer debt, but these limits do not apply to child support and alimony. 

This article focuses on non-government debt that can only be garnished with a court order.

Iowa Wage Garnishment Process 

To garnish wages in Iowa, a creditor must first get a court order. The process for court procedures are found in Iowa’s Rules of Civil Procedure and Iowa Code Chapters 626 and 654. The creditor may be called the petitioner, plaintiff, or judgment creditor. The person who owes the debt is called the respondent, defendant, or judgment debtor.

The creditor files and serves a petition for judgment.

To get a court order, a creditor must file a petition and notice in civil court to sue you if you owe them money. In this petition and notice, the creditor will ask the court for a wage garnishment judgment. The creditor then serves you this petition and notice. The notice will give you information about the court date, who is suing and why, and how much debt you owe. It will also have instructions on how to raise objections.

You can object to the creditor’s claims.

You can generally object to a claim if your wages are exempt from garnishment. You can also object if you don’t owe the debt, if the debt has been paid, or if the debt has been discharged through a bankruptcy. In Iowa, you have 20 days to respond to the notice and petition by filing and serving an answer or motion with your objections. If you receive a notice of garnishment from a small claims court, you’ll only have 10 days to respond.

If you don’t show up in court and don’t file an answer or an objection, the creditor can win by default, and the court will issue a default judgment. Once you’re in court, the judge will ask you and the creditor questions and evaluate the facts and compare them to state and federal laws. If you’re being sued for a debt, you may want to contact an attorney. They can advise you of your rights and help you defend yourself.

The judge will issue a court order.

After evaluating your case, the judge will make a court order, including the judgment amount. After the court order judgment is issued, the creditor files a Request for Execution, sometimes called a praecipe. This is a form that states that an action is needed. This praecipe, or Request for Execution, will either be served on the employer for a wage garnishment or a financial institution for a bank account garnishment. The employer or bank is known as the garnishee. You will also get a copy. 

Wage garnishment papers are covered in Iowa Code chapters 626 and 654. The judgment execution papers are delivered to the employer, and the employer must give notice to the employee of the garnishment with the garnished paycheck. Wage garnishments are sometimes called wage attachments. 

How Much of My Paycheck Can Be Taken by Wage Garnishment?

Your paycheck can never be garnished for more than the judgment amount. The judgment amount will include the debt as well as fees, costs, and interest. There are also federal and state limits and exemptions. Per the Consumer Credit Protection Act (CCPA), the maximum amount of your total wage garnishment cannot exceed 25% of your disposable income, with some government exceptions. Your disposable income is what you take home after legally required deductions (like federal taxes and Social Security) are taken out. 

You can have more than one judgment against you, but creditors can’t garnish more than 25% of your disposable earnings. For instance, if one creditor is garnishing 20%, the next creditor can only garnish 5%. Some creditors will have priority over others based on Iowa law.

In a judgment for consumer debt, federal law states that creditors can garnish whichever is less:

• 25% of your weekly wages; or

• The amount your weekly disposable income exceeds 30 times the federal minimum wage (currently $7.25). If your weekly income doesn’t exceed $217.50 ($7.25 x 30), all your wages are protected from garnishment.

In Iowa, employee’s have extra protection. Section 537.5105 of the Iowa Codes raises the exempt amount from 30 to 40 times the federal minimum wage. So let’s do an example. If your weekly disposable income is $500, 25% of your wages would be $125. And 40 times the federal minimum wage would be $290 (40 x $7.25). So your weekly wages would exceed the federal minimum wage standard by $210 ($500 - $290). Since $125 is less than $210, creditors can only garnish $125 of your weekly disposable income.

Iowa also limits how much of your wages can be garnished each year based on your income. If you make more than $50,000, no more than 10% of your expected earnings can be garnished annually. If you earn $16,000-$23,000 a year, only $800 per year total can be garnished. If you make $11,999 or less, creditors can garnish more than $250 per year. 

How To Stop a Garnishment in Iowa

There are two primary ways to stop a garnishment in Iowa. You can pay the debt or file bankruptcy. Even if your wages are being garnished, you may still be able to negotiate your debt payments or try debt settlement.

When you file bankruptcy in Iowa, the court issues an automatic stay. This court order tells creditors to stop debt collection efforts, including wage garnishment. Certain types of income and property in Iowa are protected and exempt from the bankruptcy proceeding. Your debt may be completely discharged after bankruptcy so you’ll no longer owe the debt that your wages were being garnished for.

Upsolve has a free online bankruptcy tool you can use to file Chapter 7 bankruptcy pro se (without an attorney). Or you can contact a bankruptcy attorney to help you file a bankruptcy court action. You can also call your local legal aid office to see if you qualify for assistance. 

Are There Any Resources for People Facing Wage Garnishment in Iowa?

There are resources available for people working in Iowa who are facing wage garnishment. Here are some helpful Iowa resources:

• Iowa Legal Aid: Information on wage garnishment exemptions.

• Local Iowa Resources from the Iowa State Bar Association: Links to nonprofit legal service resources in Iowa.

• Iowa Courts: Info on how to represent yourself in court.

• Iowa Attorney General Office: Information on wage garnishment in Iowa.

• Free Legal Answers: Legal advice for low-income individuals provided by the American Bar Association.

• Self-Help for Filing Judgments: Help from the Iowa Judicial Branch.

• Iowa’s Rules of Civil Procedure: The rules that must be followed for civil legal matters in Iowa.