Iowa Debt Management Bond

Enter the business name to obtain a quote:

Iowa Debt Management Bond: A Comprehensive Guide

This guide provides information for insurance agents to help debt managers obtain Iowa Debt Management Bonds

At a Glance:

  • Lowest Cost: $375 per year or $38 per month, based on the applicant’s credit
  • Bond Amount: $25,000
  • Who Needs it: All debt management companies seeking to obtain a license in Iowa
  • Purpose: To ensure the public will receive compensation for any damages should the debt manager fail to comply with licensing law
  • Who Regulates Debt Managers in Iowa: The Iowa Division of Banking
 Iowa Debt Management Bond Form
Iowa Debt Management Bond Form


ARC 3954C requires all debt management businesses operating in the state to obtain a license with the Division of Banking. The Iowa legislature enacted the licensing laws and regulations to ensure that debt managers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law debt managers must purchase and maintain a $25,000 surety bond to be eligible for licensure.

What is the Purpose of the Iowa Debt Management Bond?

Iowa requires debt managers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the debt manager fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the debt manager breaks licensing laws.

How Can an Insurance Agent Obtain an Iowa Debt Management Surety Bond?

BondExchange makes obtaining an Iowa Debt Management Bond easy. Simply login to your account and use our keyword search to find the “debt” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Not an agent? Then let us pair you with one!

BX Agent Finder Link

Click the above image to find a BX Agent near you

Is a Credit Check Required for the Iowa Debt Management Bond?

Surety companies will run a credit check on the owners of the debt management company to determine eligibility and pricing for the Iowa Debt Management bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Iowa Debt Management Bond Cost?

The Iowa Debt Management surety bond can cost anywhere between $375 to $1,250 per year or $38 to $125 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $25,000 bond requirement.

$25,000 Debt Management Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
800+ $375 $38
650 – 799 $500 $50
600 – 649 $1,000 $100
450 – 599 $1,250 $125

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Iowa Define “Debt Management Business?”

Iowa Statute 17A,533A defines a debt management business as any business entity who performs one or more of the following services:

  • Arranges or negotiates, or attempts to arrange or negotiate, the amount or terms of debt owed by a debtor to a creditor
  • Receives from a debtor, directly or indirectly, money or evidence thereof for the purposes of distributing the same to one or more creditors of the debtor in payment or partial payment of the debtor’s obligations
  • Serves as an intermediary between a debtor and one or more creditors of the debtor for the purpose of obtaining concessions from the creditors
  • Seeks to settle the amount of a debtor’s debts with creditors for less than the amounts owed on the debts

Iowa Debt Management Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Debt Management Businesses Apply for a License in Iowa?

Debt management businesses in Iowa must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.

License Period – The Iowa Debt Management License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Debt management license applicants must purchase and maintain a $25,000 surety bond

Step 2 – Request NMLS Account

The Iowa Debt Management License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.

Step 3 – Complete the Application

All Iowa Debt Management License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

    • Bank account information of the applicant’s LOC, operating or trust account(s) (if applicable)
    • Financial statements prepared by a CPA or certified by an executive officer
    • Company business plan containing the following information:
      • Marketing strategy
      • Products
      • Target markets
      • Operating structure the applicant intends to employ
    • Certificate of Good Standing obtained from the Iowa Secretary of State
    • Copy of a sample debt management agreement between the company and a consumer
    • Company formation documents
    • Management chart showing the company’s hierarchy
    • Organizational chart showing the company’s ownership structure
    • Trust account authorization

Applicants for the Iowa Debt Management License must pay the following fees when submitting their application:

    • $100 application fee
    • $250 license fee

How Do Iowa Debt Management Businesses Renew Their License?

Debt Managers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Iowa Debt Management License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Iowa Debt Management License?

The State of Iowa does not require debt managers to obtain any form of liability insurance as a prerequisite to obtaining a business license. Debt management license applicants must purchase and maintain a $25,000 surety bond.

How Do Iowa Debt Management Businesses File Their Bond?

Debt management businesses should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the debt management company. The surety company should include the following information on the bond form:

  • Legal name of entity/individual(s) buying the bond
  • Surety company’s name
  • Date the bond is signed
  • Date the bond goes into effect

What Can Iowa Debt Management Businesses Do to Avoid Claims Against Their Bond?

In order to avoid claims made against their bond, debt managers in Iowa must follow all license regulations in the state. Including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Properly account for all funds received from consumers

What Other Insurance Products Can Agents Offer Debt Managers in Iowa?

Iowa does not require debt managers to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Iowa Debt Management Customers?

The NMLS conveniently provides a public database to search for active debt managers in Iowa. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Iowa Debt Management Bond