Legal Question in Credit and Debt Law in Iowa

Re: Debt Collections in Iowa

When you co-sign for someone, you agree to the pay the debt in full if the other party fails to do so. The creditor generally has no obligation to attempt to collect from the "primary" first. Additionally, the creditor is not required to accept payments, unless the agreement you signed states differently. In other words, if the note you signed says the debt must be paid in full on March 26, 2004, they don't have to agree to accept anything less than the full amount on March 26. They can only garnish her wages AFTER they have obtained a judgment against her. This will entail filing a lawsuit, serving your wife with the summons and complaint, and a hearing or trial. If they do this, make sure you respond to the complaint and show up for every date set for court. If you fail to do so, the creditor will win by default. As far as whether the $1100 amount is excessive, that will be for the judge or jury to decide (you will not be entitled to a jury trial unless you or the creditor demand one). The other debtor is protected forever by her bankruptcy. If this debt was included in her bankruptcy, the creditor can never attempt to collect it from her. Otherwise, bankruptcy would be kind of pointless. Unfortunately, you are mistaken in your belief that "if you show a willing effort to pay a regular sum they cannot dictate the amount."

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