Statute of Limitations for Credit Card Debt in Iowa
A few years ago law firms and debt settlement companies were advising consumers the statute of limitations on a credit card debt in Iowa was ten years. Because of a case brought by the Johnson Law Firm, Iowa courts now generally hold the statute of limitations is five years. The Iowa Court of Appeals in Gemini Capital Group v. New reversed an Iowa small claims court and held that a collection action by a debt buyer must be brought within five years from the time the account went into default.
If a debt collector is attempting to collect a time barred debt from you, please contact us immediately. Do not make the mistake of thinking you can let a collector obtain a judgment against you and then refuse to pay because the debt was time barred. The defense that a debt is time barred must be raised as an affirmative defense to a district court lawsuit and, in small claims, it must be raised as a defense at trial. The defendant has the burden of proving a debt is time barred. A defendant may also have an unfair debt collection counterclaim if she has been sued on a time barred debt.
There can be many related issues as to whether a debt is time barred and whether the defense has been properly asserted. Call or e-mail us for a free initial consultation and we can discuss your specific situation with you.
Other types of debt may or may not have a five year statute of limitations. For example, there is a very good argument a collection action for debts such as auto deficiencies must also be brought within five years. It may be more difficult to win the argument for a consumer loan with a signed financing agreement. Even if a debt such as an auto deficiency from a car repossession is not time barred, it is likely there are numerous other credible defenses to the alleged debt. The older the debt is, the more difficult it will be for the creditor to prove the amount of a car loan deficiency.