Iowa law sets rules for transferring assets to pay creditors

An assignor transfers all included assets to an assignee to manage for creditors. It applies to specified Iowa residents and organizations, including some organizations they own or control. The chapter covers individuals whose main home is in Iowa and organizations meeting its Iowa business, governance, ownership, or control rules. An individual’s property exempt from legal process, and property effectively restricted from assignment, is excluded. The chapter applies to assignments made on or after January 1, 2027.

The assignee manages the assignment estate, handles creditor claims, and distributes available assets by priority. These rules concern the assignee and creditors with claims against the assignor or the assigned assets. The assignee must notify known creditors within a reasonable time, no later than 30 days after the agreement takes effect, unless a creditor waives notice in a signed record. Creditors generally must submit claims within 120 days after the agreement takes effect, though the assignee may accept some late claims. If assets cannot cover claims at the same priority, creditors at that level share the available amount in proportion to their claims. The notice deadline runs from the agreement’s effective date, when the last required signer signs unless the agreement sets a later date.

A transfer of property from an assignor to an assignee under this chapter is exempt from the real estate transfer tax. The exemption covers property transferred under an assignment agreement governed by this chapter. This provision takes effect January 1, 2027.