[IA] Can I require an employee to keep working or repay a truck loan in full if they leave the job?

IA Employment

My employee is buying my truck from me with the agreement he will work for me until the truck loan is paid in full. I filled out a promissory note, but it doesn’t have a place to list the vehicle. Is there something else we should be using?

January 15, 2026

Richard

76,546 satisfied customers

View context

Solved

Based on Iowa law, this situation raises several considerations:

The agreement should clearly outline payment obligations and employment conditions.
Combining an employment relationship with a loan repayment agreement requires careful drafting to ensure enforceability.
The agreement should explicitly state that the $40,000 loan has no interest (Iowa Code § 535.2).
Clear terms are needed to require immediate repayment if employment ends (Iowa Code § 554.1309).

Loan Agreement/Promissory Note

Create Document

Full Conversation

Lexi, Chatbot

I understand you’re trying to formalize an agreement with your employee regarding the truck sale and loan. Have you discussed the terms in detail with your employee?

Yes. They understand they are to pay $500 weekly, taken directly from their paycheck, and if they leave the company they must pay the loan in full before leaving.

Lexi, Chatbot

Is there a specific timeline for when you expect the loan to be paid off?

No, there isn’t.

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you?

I don’t want the $500 weekly payment written in the agreement because we’re a tree service and some weeks income is lower. His household bills are more important than the truck payment.

Richard

Hello, my name is Richard. I’m a licensed attorney with over 25 years of experience. Could you tell me more about the specific terms you want included?

The total loan amount is $40,000. We don’t want to include interest. We just want language stating the employee will work until it’s paid in full or must pay it in full before leaving the business.

Richard

Thank you. What state are you located in? Also, have you considered what happens if the employee can’t continue working for reasons beyond their control?

We’re in Iowa. No, we haven’t thought about that.

Richard

If the employee leaves before the loan is paid off, would you want the remaining balance due immediately?

Yes, they would need to pay it immediately.

Richard

Based on Iowa law, this situation raises several considerations:

The agreement should clearly outline payment obligations and employment conditions.
Combining an employment relationship with a loan repayment agreement requires careful drafting to ensure enforceability.
The agreement should explicitly state that the $40,000 loan has no interest (Iowa Code § 535.2).
Clear terms are needed to require immediate repayment if employment ends (Iowa Code § 554.1309).

That all makes sense. Thank you.

Richard

You’re welcome. Feel free to reach out if you have any other questions.

Richard

76,546 satisfied customers

Welcome! Have a similar question?

12 lawyers online now

Andres Sanchez

Attorney

4.73 (22,292)

[OK] Do I have a viable constructive discharge and retaliation claim against my employer?

Answered 3 days ago

TJ, Esq.

4.68 (17,778)

[IN] Can a contractor terminate a contract for material breach when a homeowner performs unauthorized work on a job site?

Answered 2 weeks ago

Richard

4.26 (76,546)

[CA] [CA Can I legally reduce employees’ hours and offer an optional severance without risking lawsuits?

Answered 1 month ago

Disclaimer

By messaging AskaLawyer.com, you agree to our Terms and have read our Privacy Policy.

The information provided on AskaLawyer.com is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the information presented, we make no guarantees regarding its completeness or applicability to your specific circumstances.

Use of this website does not create an attorney-client relationship between you and AskaLawyer.com or any of its attorneys. Communications through this website, including any responses from attorneys, are not privileged or confidential. For advice tailored to your individual situation, we recommend consulting a licensed attorney in your jurisdiction.

AskaLawyer.com disclaims any liability for actions taken or not taken based on the content of this site. We are not responsible for any third-party content that may be accessed through this website. Reliance on any information provided herein is solely at your own risk.