When you can’t pay a bill which is due the process of aggressive debt collection quickly begins. In Iowa there is an excellent law to protect you–the Iowa Debt Collection Practices Act (Iowa Code Sections 537.7101 to 537.7103). The Federal Fair Debt Collection Practice law is very similar to the Iowa law but it applies only to third party debt collectors–not to a creditor collecting its own debt. Iowa law, however, defines everyone engaging in debt collection, directly or indirectly, as a debt collector which makes it cover anyone trying to get money from you.
The debt collector(s) cannot:
- Threaten or use violence
- Falsely accuse you of a fraud or any other crime
- Report or threaten to report false accusations to any person, including a credit reporting agency
- Threaten to sell your debt to someone else who will engage in abusive collection practices
- Falsely threaten that nonpayment will result in arrest or that your wages will be garnished or your property will be seized
- Take or threaten to any action prohibited by law
- Use profanity or obscene language
- Trick you into paying for collect calls or telegrams
- Repeatedly or continuously call to the point of harassment, or call at unusual hours
- Communicate by postcard or include anything on an envelope that relates to debt collection
- Contact a third party except to locate you
- Contact your employer or credit union more than once every three months for the purpose of obtaining debt counseling services for you
- Contact your employer more than once a month for the purpose of verifying employment
- Contact the parents of a minor debtor, a trustee, a conservator, or a guardian more than once every three months
- Publish or post your name
- Misrepresent the amount of money owed
- Tack on collection fees and charges
- Pretend he’s an attorney if he’s not
- Send you legal-looking documents when they’re not court documents
- Try to trick one spouse into signing a document making him or her liable for the other spouse’s debt
- Try and get you to sign a document saying that you owe a debt that’s been discharged in bankruptcy
- Contact you directly if you have an attorney
Also, the debt collector must disclose the name of the debt collection agency and state that he is collecting a debt in a phone call.
Iowa law allows individual consumers to sue debt collection agencies. A successful lawsuit filed in the state can result in an award of actual damages and statutory damages. This is in addition to being able to sue a debt collection agency for violation of the Fair Debt Collection Practices Act. The FDCPA makes certain debt collector tactics illegal, and gives you the right to sue a debt collection agency in federal court. If the debt collection agency has broken the law, you can receive actual expenses, attorney fees, and up to $1,000.
It is very useful to retain an attorney to represent you in Iowa because the harassment and collection calls made directly to you must then stop. The debt collectors must always communicate with the attorney once they have been given this information. After that they can only file lawsuits against you to try to collect the debt. Also, if you file a bankruptcy, not only must the communications by the debtor collectors stop, but civil lawsuits for money collection generally come to an end unless permitted by the bankruptcy court (which is unusual).
Iowa Bankruptcy Attorney Robert J. Liptak
Fairfield, Iowa