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Stop Wage Garnishment in Iowa

Sarah Edwards | July 06, 2023

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Harris is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: In Iowa, creditors can seize up to 25% of your weekly disposable earnings in wage garnishment. Luckily, wage garnishment laws protect you from unfair treatment, and provide ways to stop a wage garnishment that has already occurred. Alternatively, you can avoid Iowa wage garnishment before it happens through debt settlement. SoloSettle makes the debt settlement process easier.

When you’re struggling to keep up with your regular debt payments, you may wonder what will happen if you stop paying your creditors. Will your debts disappear into a black hole? Will your creditors suddenly forget about you and stop calling you?

Unfortunately, that’s wishful thinking. Creditors seldom forget when someone owes money, and they’re likely to step up their collection efforts if you stop paying your bills.

Continued nonpayment can result in a debt lawsuit. If your creditor wins a debt lawsuit against you, it will obtain a judgment they can use for wage garnishment.

You don’t want a wage garnishment. For starters, your employer isn’t likely to welcome the extra effort they’ll need to put into preparing your paycheck and withholding money for your creditor. You may lose a significant chunk of your income, harming your ability to pay for other expenses, like rent.

Avoid wage garnishment through debt settlement.

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Iowa has complicated wage garnishment laws

The federal government sets base guidelines for wage garnishment. However, every state retains the right to set its own wage garnishment limitations, provided these are equal to or less than the federal restrictions.

Under Iowa Code § 642.21, Iowa sets a cap on the cumulative amount of annual garnishment. The cap depends on the individual’s yearly disposable earnings:

  • Under $12,000: Maximum garnishment of $250 each year.
  • $12,000 to Under $16,000: Maximum garnishment of $400 each year.
  • $16,000 to Under $24,000: Maximum garnishment of $800 each year.
  • $24,000 to Under $35,000: Maximum garnishment of $1,500 each year.
  • $35,000 to Under $50,000: Maximum garnishment of $2,000 each year.
  • $50,000 or More: Garnishment of up to 10% of wages.

The caps stipulated by the law apply to all garnishments. For instance, if someone earning $11,500 yearly has three different outstanding garnishments, the maximum that an employer can withhold from their paycheck is $250, regardless of the additional amounts pending.

Aside from this law, Iowa has another wage garnishment limitation that applies to consumer debt. Under Iowa Code § 537.5105, the maximum wage garnishment is equal to the lesser of:

  • 25% of the individual’s disposable earnings.
  • The amount that the individual’s disposable earnings exceed 40 times the current federal minimum wage of $7.25 hourly.

Consumer debt includes household credit, like credit cards, personal loans, and car loans. Disposable earnings include wages, salary, commissions, and bonuses after required withholdings, like federal and state tax. It’s important to note that required withholdings do not include voluntary items, like healthcare or life insurance premiums.

Let’s consider an example of how wage garnishment works in Iowa.

Example: Phoebe has an unpaid credit card with Flex Bank with a $1,000 balance. Flex Bank sues Phoebe and wins a judgment against her for the debt. Flex Bank wants to garnish Phoebe’s wages. She currently earns $35,000 per year. Under the caps outlined in Iowa Code § 642.21, Flex Bank can withhold up to $1,500 yearly. Since Phoebe’s debt is a consumer credit transaction, the restrictions of Iowa Code § 537.5105 apply. We can assume Phoebe’s weekly disposable earnings are $673.08, or $35,000 ÷ 52 weeks. Under Iowa Code § 537.5105, creditors can withhold the lesser of two numbers: either 25% of her earnings or $673.08 - (40 x $7.25). The first option is $168.27 weekly, and the second is $383.08. The lesser amount (25% of Phoebe’s disposable earnings) applies. The creditor can withhold $168.27 each week until she satisfies the $1,000 outstanding debt.


Are you facing a debt lawsuit in Iowa? Avoid wage garnishment by settling your debt with SoloSettle.

Don’t ignore an Iowa debt lawsuit

Wage garnishment doesn’t benefit anyone: your creditor, your employer, or yourself. Your creditor will need to go through a long legal process to win a judgment. Your employer will be stuck calculating your garnishment amount according to the very complex Iowa wage garnishment laws. You’ll lose a significant chunk of your income until you repay the debt.

Rather than allowing the situation to spiral out of control, take action.

When you receive notice of a pending debt lawsuit, take your time to read through the creditor’s Complaint. The Complaint will list the amount you owe and any pertinent information about your account. Check it for accuracy, and note any discrepancies you find.

You’ll want to respond to the creditor’s Complaint with an Answer. In your Answer, you’ll note your defenses to the lawsuit, if you have any. You'll still want to file an Answer even if you don’t have a defense. With an Answer, your creditor can’t ask the judge for a default judgment against you.

Draft and file an Answer to your debt lawsuit with SoloSuit.

Next, you’ll want to resolve the debt before your court date. You can either repay the debt or attempt to settle it.

Repaying the debt is a full stop to any further legal actions against you concerning the debt. You won’t need to worry about a judgment or wage garnishment since you will no longer owe the creditor any money.

If you don’t have the money to repay the entirety of the obligation, you can try to settle it.

Avoid wage garnishment through debt settlement

To settle a debt, you must offer the creditor a portion of the balance in one lump-sum payment. If it agrees to the settlement — and you hold up to your end of the bargain — the creditor will drop the lawsuit against you and release you from any remaining claims.

If you can negotiate a debt settlement, the debt lawsuit and the potential for wage garnishment go away.

SoloSettle, powered by SoloSuit, is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers until you reach an agreement with the collector. Once an agreement is reached, we’ll help you manage the settlement documentation and transfer your payment to the creditor or debt collector, helping you keep your financial information private and secure.

To learn more about how to stop wage garnishment through debt settlement in Iowa, check out this video:

Stop wage garnishment in Iowa by filing an Affidavit of Property Exempt from Execution

Some types of income are exempt from garnishment in Iowa, such as public benefits, social security, veteran's benefits, child support and alimony. If you receive such income, it is protected by Iowa wage garnishment laws, and you can stop garnishment before it happens by filing an Affidavit of Property Exempt from Execution.

Click here to learn more about garnishment in Iowa.

Wage garnishment is financially painful

While repaying or settling your debt before your court date may be tough, the pain you incur now will stop your creditor from seizing part of your income for months. Don’t let your creditors win. Instead, take the appropriate action and say goodbye to the debt lawsuit.

What is Solo?

Solo makes it easy to resolve debt with debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt. SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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