Iowa Debt Management Businesses Now Need Surety Bonds

Iowa Debt Management Businesses Now Need Surety Bonds

Individuals and businesses experiencing financial difficulties have plenty to worry about, whether it’s figuring out how to scrape together enough money for the electric bill or finding a way to pay the employees on their payroll. A debt management business is often brought in to help relieve some of the pressure that comes with a heavy financial burden.

All individuals, entities, or companies must post a $25,000 surety bond when applying for an Iowa debt management business license with the Iowa Division of Banking, which is required to legally work in the state. Debt management businesses are required to get a bond under Iowa Code Chapter 533A to ensure the debt management business and all associated employees will faithfully account for all money collected while on the job.

What is a Debt Management Business?

A licensed debt management business refers to any company, entity or individual engaging in the following types of work:

  • Renegotiating the amount of debt or terms of a debt owed by a debtor
  • Receiving from a debtor, money or evidence thereof for the purpose of distributing the same to creditors of the debtor in payment or partial payment of the debt
  • Serving as an intermediary between a debtor and creditor for the purpose of obtaining concessions from the creditors
  • Assisting in debt settlement, which means seeking to settle a debtor’s debts with creditors for less than the amounts owed on the debts

How to obtain a debt management business license in the State of Iowa

To obtain an Iowa debt management business license, all applicants must:

  • Complete an application with the State of Iowa Division of Banking
  • Purchase the required $25,000 surety bond
  • Conduct and pass a criminal background check
  • Pay the $100 investigation fee and $250 license fee by writing a check made out to the State of Iowa Division of Banking
  • The following items must also be enclosed with applications
    • A copy of the most current financial statements certified by an executive officer
    • Current list and biography of each owner, partner, manager (of L.L.C.), director, and principal officer
    • Current list of owners, partners, members, or shareholders
    • If a limited partnership, limited liability company, or corporation, the authority to file an application for a license
    • Credit report of the person in charge of the office
    • Copy of proposed debt management contract

Any other inquiries regarding license applications can be directed to the State of Iowa Division of Banking Finance Bureau at (515) 281-4014 or [email protected].

Who is exempt from needing a debt management business license in Iowa?

Although most entities performing the duties of debt management businesses must first be licensed, there are a few exemptions specified in the law. The following is a list of those who do not need to be licensed as a debt management business in the state of Iowa:

  • Licensed attorneys, judicial officers, or others acting under court orders
  • Banks, federally chartered savings and loan associations, credit unions, mortgage bankers and mortgage brokers, insurance companies and similar fiduciaries, regulated loan companies, and industrial loan companies
  • Abstract companies performing an escrow function
  • Nonprofit religious, fraternal, or cooperative organizations offering to debtors gratuitous debt management services 

Need a surety bond for an Iowa debt management business?

The experts at have years of experience issuing debt management business license bonds nationwide, meaning they know what it takes to get the bond you need quickly and easily. Visit or call 1 (800) 308-4358 today for a free, no obligation quote on your surety bond!

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About the Author

Michelle Cummings
Michelle is a senior at the University of Missouri - Columbia studying journalism with an emphasis in strategic communication. She is a member of the marketing department and outreach team for, a leading provider of online bonding for clients nationwide.