Melissa Lyken | July 21, 2022
Summary: Indiana protects consumers against debt collectors bringing up old debts. Find out if your creditor is trying to collect on a debt that expired under the Indiana's statute of limitations. You might be able to put that debt behind you and move on with your life.
Indiana has a specific time frame that creditors can pursue lawsuits for debts. This timeframe is commonly referred to as the statute of limitations. Depending on the kind of debt you owe, this period varies anywhere from two to twenty years.
So, if a creditor doesn't file a lawsuit against a debtor during the prescriptive period, the debt collector or creditor loses the right to sue for the debt later. You may be wondering if the statute of limitations has lapsed on your debt. Keep reading to find out.
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If you owe money to a creditor or your debt was sold to a debt collection agency, the creditor has a set amount of time to file a lawsuit against you for the debt. The time frame varies from one state to another, depending on the debt involved.
Indiana law provides a different time frame for written and oral contracts. For example, written contracts have a limitation period of 6-10 years from the date of default. On the other hand, oral or unwritten contracts have a period of six years. The statute becomes active from the date your payment is due or the last time you made payment before you defaulted.
Now that you have a general overview of how the statute of limitations in Indiana works, let's look at the different categories of debts and their respective perceptive periods.
In Indiana, there are two types of statutes of limitations on debt:
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According to Indiana law, creditors or debt collectors can charge debtors for breach of unwritten contracts within six years after the cause of action accrues. This provision applies to credit card debts, rent, damages resulting from detention of personal property, and recovery of personal property.
A written contract is a signed agreement between the debtor and the creditor stating the amount of debt, nature of the debt, and maturity date. This category also includes promissory notes, bills of exchange, and other written contracts. A creditor has 6-10 years to collect debt associated with written contracts.
Here is a closer look at the most common written contracts:
If your medical debt entails a written contract, a creditor can file a lawsuit within six years.
If your debt is a promissory note, this debt is a written agreement to pay back the debt at a fixed interest rate by a specific date and time.
Student loans and home loans are considered promissory notes. In Indiana, a creditor has six years to file a lawsuit for defaulted payment.
A creditor has four years to file a lawsuit for breach of contract for the sale of goods. In Indiana, the law allows both parties to reduce the period of limitation, but they can't extend it. This means the period can be reduced to three, two, or one year, but not less than one year.
For car loans, the lender has four years to file a collection lawsuit from the default date.
Use SoloSuit to have your debt collection case dismissed.
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Indiana Statute of Limitations |
|
|
Debt Type |
Deadline in Years |
|
Oral |
6 |
|
Written |
4-10 |
|
Medical |
6-10 |
|
Promissory |
6 |
|
Sale of Goods |
4 |
|
Auto |
4 |
|
Source: Findlaw |
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The statute of limitation can start again when a debtor makes a written acknowledgment to pay or voluntarily make payment before the expiration of the prescriptive period. In this case, the debt collector may decide to extend the period for collecting the consumer's debt by filing for judgment.
In Indiana, the statute of limitations by judgment is ten years, but it can be renewed, further extending the collection period. This means once a creditor makes a charge against the debtor, the judgment is collectible for up to ten years. Before the ten years lapses, the creditor may have the judgment renewed, adding ten more years. The period starts running from:
If the judgment is not renewed on time or the debt collector doesn't do anything to execute that judgment for a specified period, it lapses. When a judgment lapses, the debtor can't be arraigned in court for unpaid debt. This means the debt collector can't:
A debt collector can renew the statute of limitation once or twice. If the judgment against the debtor lapses, the debt collector can still revive it within a specific time limit. The time frame begins when the judgment becomes dormant, or the last time the collector tried to collect debt on the judgment.
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Here's an example: Collins Asset Group v Alkhemer Alialy Case
In this case, the defendant obtained a mortgage in September 2007 and defaulted on payments in July 2008. The loan was transferred to a debt collector, the plaintiff, in October 2016, who accelerated the debt and demanded full payment. The plaintiff moved to sue the debtor to recover the loan in April 2017.
You would think the defendant could argue that the six-year statute of limitations on a promissory note lapsed, so they were no longer liable to pay. However, the six-year- period started running when the plaintiff exercised the acceleration clause in 2016. Because of this, it was well within the plaintiff's right to file the suit to recover the full amount. The Supreme Court used this argument, judging the case in the plaintiff's favor.
Legally, tolling pauses or delays the set time frame on a statute of limitation. This means a debtor can be charged after the statute of limitation has run. In Indiana, tolling state law applies when:
Tolling statute of limitations on debt doesn't apply when:
Debt can put anyone in a tight and embarrassing spot, especially when the collector keeps hounding you for payment. If you are being sued for a debt and believe the statute of limitations has run its course, you can include this information in your Answer. Filing your answer doesn't have to be a tedious or frustrating process. We hope these insights give you more information on the statute of limitations in Indiana and take some of the confusion out of the legal process.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance
Here's a list of guides for other states.
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