To be among the best business debt settlement companies in Iowa, a provider must understand that Iowa homestead exemptions are based on acreage rather than value, business borrowers cannot raise usury, and confessions of judgment can still be entered against businesses.
Can a merchant cash advance (MCA) funder take my house in Iowa?
Probably not if you owned the home prior to signing the MCA guarantee and the property is within size limitations. The homestead exemption is limited by size, not value: Iowa Code 561.2 caps it at one-half acre in a platted city or 40 acres in non-platted areas. Iowa Code 624.23 provides that an Iowa judgment cannot attach as a lien to a homestead, and written demand can force an MCA funder claiming a lien to levy within 30 days or lose its claim.
An experienced provider will still review the specifics. Iowa Code 561.21 allows levy for a deficiency on any debt contracted before the homestead was acquired, so buying a house after signing an MCA guarantee exposes it, as does a written contract stipulating that the homestead is liable. Excess acreage is exposed, and Iowa Code 561.3 treats a business shop on the homestead as an appurtenance only if it is worth $300 or less. For more, see Can a personal guarantee on a merchant cash advance be used to take my house?
What can an MCA funder take from a business owner in Iowa?
A good provider knows that bank accounts are probably the most vulnerable asset because Iowa Code 627.6(14) only exempts $1,000 of cash, bank deposits and other personal property. Other exemptions include:
| Property | Iowa exemption | Section |
|---|
| One motor vehicle | $7,000 | 627.6(9) |
| Non-farm tools of the trade | $10,000 combined | 627.6(11) |
| Farm implements, equipment, livestock and feed | $10,000 combined | 627.6(12) |
| Household goods and furnishings | $7,000 combined | 627.6(5) |
| Cash, bank deposits, and other personal property | $1,000 combined | 627.6(14) |
| Retirement accounts, including 401(a) plans, IRAs and Roth IRAs | Broadly exempt, with limits on recent contributions | 627.6(8)(f) |
Wage garnishment is limited yearly for each creditor: Iowa Code 642.21 starts at $250 per year for expected earnings under $12,000 and rises to 10% of expected earnings at $50,000 or more. A good provider will focus on protecting your operating bank account, any non-exempt equipment and any excess land.
Can a business borrower in Iowa use usury to reduce an MCA?
Probably not. 5% is Iowa’s default rate only without a written agreement, and Iowa Code 535.2(2) provides that a corporation or a person obtaining credit for business or agricultural purposes may contract in writing for any rate and cannot plead usury. Even an Iowa court treating the MCA as a loan wouldn't change that. Be wary of any provider that uses “Iowa usury” as a selling point. As of March 2026, a survey of commercial financing disclosure laws by Venable LLP shows Iowa does not have one.
How do confessions of judgment and out-of-state judgments work in Iowa?
Iowa Code Chapter 676 allows a Clerk of the District Court to enter a judgment by confession without a lawsuit, and Iowa Code 537.3306’s prohibition against confessions prior to default only applies to consumer credit. The confession must be for a specified sum and include a statement, signed and verified by the owner, of the facts behind the debt. Under Iowa Rules of Civil Procedure 1.1012 and 1.1013, if a judgment by confession is obtained irregularly or by fraud, the owner can file a petition within one year alleging a meritorious defense. For more, see What is a confession of judgment and is it still legal?
More often, the funder sues in New York or New Jersey and files the judgment in Iowa under the Uniform Enforcement of Foreign Judgments Act, Iowa Code 626A. The judgment becomes enforceable as if obtained in Iowa, except that no execution may issue until 20 days after filing, and your provider should be able to settle before a bank levy is executed.
How do you choose a business debt settlement company in Iowa?
Weigh the answers to these questions above where we rank on this page.
- How will you deal with my homestead? When did I buy my house? How many acres do I have? Did I stipulate in the contract that my homestead would be subject to the debt?
- Do you understand the boldface requirements of section 561.22 of the Iowa Code if I have agricultural land and signed a homestead waiver?
- Do you understand the 20-day window after a foreign judgment is filed and the one-year window to vacate a confessed judgment?
- Are you experienced with farm cash flow and receivables from elevators and co-ops?
- Are you licensed under Iowa Code 533A? If not, why don’t you need to be?
Iowa Code 533A requires a license from the Superintendent of Banking to negotiate debt settlements for a fee on behalf of a natural person residing in Iowa, and Iowa attorneys acting incident to the practice of law are exempt. The statute does not apply to settling an LLC's debt, but it arguably applies to settling a personal guarantee. Fees are limited to $50 for initiation plus either 15% of amounts applied to accounts or 18% of enrolled debt, depending on the program. See How much does business debt settlement cost?
Frequently Asked Questions
Does it matter if I bought my house before or after signing the personal guarantee?
Yes, Iowa Code 561.21 makes the homestead subject to a deficiency judgment for a debt contracted prior to acquisition of the homestead. A new homestead bought with proceeds from the old one stays exempt up to the old home's value.
I operate my business out of my farm, what is exempt?
Your homestead may include up to forty acres if it is not located within a city plat. Any additional acreage is subject to the debt. Farm implements, equipment, livestock, and feed are exempt up to ten thousand dollars combined. A business building on the homestead is exempt as an appurtenance only if worth three hundred dollars or less.
Do you need to be licensed to operate a debt settlement business in Iowa?
Iowa Code 533A requires a license to negotiate debt settlements for a fee on behalf of a natural person residing in Iowa, with Iowa attorneys acting incident to the practice of law exempt. The law does not apply to debt incurred by a business entity. However, if you have personally guaranteed the debt, ask the provider why it does not need a license.
How long do I have to act after a New York judgment is filed in Iowa?
Iowa Code 626A provides that no execution may be issued until twenty days after the judgment is filed with the clerk of the district court. However, you may be able to obtain a stay of proceedings if you can show that an appeal is pending or for other reasons.