Sued by JPMorgan Chase Bank in Iowa? Here's What to Do Next

2015 · consent order

$216M+ total (at least $50M consumer refunds + $30M CFPB penalty + $30M OCC penalty + $106M state payments) plus permanent ban on collecting 528,000 consumer accounts

Joint CFPB and 47-state action finding Chase sold credit card debts that had already been settled, paid, discharged in bankruptcy, or identified as fraudulent, and used robo-signed sworn statements with inaccurate balances and account information to support more than 528,000 collection lawsuits. Chase was permanently barred from collecting on those 528,000 accounts.

CFPB source

Statute of Limitations Defense

In Iowa, the statute of limitations for credit card debt is 5 years. If your last payment was more than 5 years ago, the debt is time-barred. Verify when your last payment or account activity occurred and raise the SOL defense in your Answer if applicable.

Challenge the Amount

Demand a complete accounting from the original creditor's last statement through the current claimed balance. Any unauthorized fees, post-charge-off interest, or collection costs not in the original agreement should be disputed line by line.

Iowa Wage Garnishment Exemptions

Greater of 75% of disposable earnings or 40x federal minimum wage is exempt.

Iowa Consumer Fraud Act

In addition to the federal FDCPA, Iowa's Iowa Consumer Fraud Act may provide additional protections and remedies against JPMorgan Chase Bank's collection practices.

Iowa Court System

Small claims limit $6,500. District court handles larger civil cases. Filing fees in Iowa typically range $50-$250.

Does Chase sue for credit card debt?

Yes. Chase is one of the most litigious credit card issuers and regularly sues for unpaid balances on all Chase card products including Sapphire, Freedom, and co-branded cards.

What if I was never properly served in a Chase lawsuit?

Improper service is a valid defense. If you were not personally served according to your state's rules, you can move to dismiss or vacate any default judgment entered against you.

Can I settle a Chase credit card lawsuit?

Chase sometimes settles, particularly after you file an Answer and show you will actively defend. Settlement amounts vary but can be significantly less than the full balance.

Does Chase sell debt to collectors?

Yes. Chase sells some defaulted accounts to debt buyers like LVNV Funding and Portfolio Recovery Associates. If a debt buyer sues you for a Chase debt, they must prove the chain of ownership.

How long do I have to respond in Iowa?

20 days from service.

What is the SOL in Iowa?

5 years for credit cards. 10 years for written contracts.

Can they garnish my wages?

Yes. The greater of 75% of disposable earnings or 40x minimum wage is exempt.

Where do I file my Answer?

In the court listed on your summons, typically district court.

What is the statute of limitations on debt in Iowa?

Iowa's statute of limitations is 10 years for a written contract under Iowa Code § 614.1(5), and five years for an unwritten contract or open account under Iowa Code § 614.1(4). Iowa courts have generally applied the 10-year written-contract limit to credit-card debt because the cardholder agreement is in writing. The clock starts on the date of the last payment or the date of charge-off, depending on the agreement. If you are sued after 10 years, statute of limitations is an affirmative defense you must plead in your answer under Iowa Rule of Civil Procedure 1.421 or you waive it. Filing a time-barred collection lawsuit can support a counterclaim under the federal FDCPA at 15 U.S.C. § 1692e and the Iowa Consumer Credit Code at § 537.7103. Partial payment or written acknowledgment can restart the clock under Iowa Code § 614.11.

How much can be garnished from my paycheck in Iowa?

Iowa wage-garnishment law at Iowa Code § 642.21 is more protective than federal law for low and middle earners. The total amount a creditor can garnish in a year is capped by income bracket: $250 if annual earnings are between $12,000 and $16,000, $400 between $16,000 and $24,000, $800 between $24,000 and $35,000, $1,500 between $35,000 and $50,000, and 10 percent of annual earnings if above $50,000. Earners below $12,000 are fully exempt from consumer-debt garnishment. The federal cap at 15 U.S.C. § 1673 of 25 percent of disposable earnings still applies on a per-pay basis. Social Security, SSI, VA benefits, unemployment, workers compensation, and most retirement accounts are exempt under federal law and Iowa Code § 627.6. File a claim of exemption with the clerk after notice.

Can a collector freeze my Iowa bank account after winning a judgment?

After a judgment, an Iowa creditor can apply for a writ of garnishment under Iowa Code § 642.4 directed to your bank. The bank will hold the funds up to the judgment amount until further order. Iowa Code § 627.6 provides exemptions for most retirement accounts, life insurance proceeds, and a $1,000 wildcard. Federal law exempts Social Security, SSI, VA benefits, unemployment, child support, and federal student aid. The federal Treasury Garnishment Rule at 31 CFR Part 212 requires banks to look back two months for direct-deposited federal benefits and protect them automatically. For non-protected funds, file a claim of exemption with the court within 10 days of notice. Iowa law also includes a head-of-household exemption applicable to certain bank deposits.

What can a debt collector legally say to me in Iowa?

Both the federal FDCPA at 15 U.S.C. § 1692c-§ 1692f and the Iowa Consumer Credit Code at Iowa Code § 537.7103 limit collector conduct. Collectors cannot call before 8 a.m. or after 9 p.m. local time without your consent, cannot use obscene or threatening language, cannot misrepresent the amount or legal status of the debt, and cannot threaten lawsuits they do not intend to file. They cannot tell family members, neighbors, or your employer about the debt itself. Calls at the workplace must stop if the collector knows the employer prohibits them. Document every call with the date, time, caller name, and what was said. Each violation can mean up to $1,000 in statutory damages plus actual damages and attorney fees under 15 U.S.C. § 1692k and Iowa Code § 537.5201.

How do I respond to an Iowa small-claims debt-collection notice?

If you are served with an Iowa small-claims original notice under Iowa Code § 631, you must file a written answer with the clerk by the appearance date listed in the notice, generally 20 days after service. Small-claims procedures are simplified, but you still need to deny the allegations you do not know to be true, assert affirmative defenses including statute of limitations under Iowa Code § 614.1, lack of standing of the debt buyer, and any FDCPA or Iowa Consumer Credit Code counterclaim under § 537.7103. The court will set a hearing where both sides present evidence informally. If you cannot attend, you may request a continuance with good cause. Default judgment is entered if you do not respond. Iowa Judicial Branch provides free fillable small-claims answer forms.