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Debt Collection Laws in Indiana

Patrick Austin, J.D. | April 17, 2023

Patrick Austin
Attorney from George Mason
Patrick Austin, JD

Patrick Austin is a licensed attorney with a background in data privacy and information security law. Patrick received his law degree at George Mason University's Antonin Scalia Law School, where he served as the Editor-in-Chief for the National Security Law Journal.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Indiana debt collection laws were written to protect you.

Summary: The Hoosier State provides consumers with certain statutory protections when it comes to interacting with debt collectors. For example, debt collectors are legally obligated to provide you with written notice concerning the debt, explain your right to formally dispute the debt, and cannot use harassment and/or deceptive collection practices.

If you reside in Indiana and are being contacted incessantly by a creditor or debt collector, then it is perfectly understandable if you are feeling intimidated and anxious. You may not be sure how to approach the situation or what steps you can take to address the debt collector. SoloSuit is here to help.

This article provides a comprehensive overview of debt collection laws in Indiana, including laws designed to protect you from harassment, intimidation, and deceptive collection practices.

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Indiana debt collection laws govern collection practices

There are various statutory provisions applicable to debt collection practices in the Hoosier State. Indiana regulates the practice of debt collection. For example, there are licensing requirements that debt collection agencies must satisfy to legally operate in Indiana, according to Section 25-11 of the Indiana Code. Also, debt collectors are obligated to register with the Office of the Secretary of State and comply with various licensing standards.

Indiana laws protect you from unfair debt collection practices

Indiana’s debt collection laws protect consumers from unfair debt collection practices. This includes the right to receive written notice of the debt, the right to dispute the debt, and the right to challenge the debt collector’s practices in court. Specifically, Indiana law prohibits debt collectors from making false or deceptive statements, communicating with third parties about the debt, or threatening to take illegal action.

Indiana law also protects the wages of consumers from garnishment. Debt collectors must obtain a court order before attempting to garnish wages. In addition, Indiana law limits the amount of debt that can be collected. If a debt collector attempts to collect more than is legally allowed, they may be found in violation of state law. Reach our Stop Wage Garnishment in Indiana guide to learn more.

Federal debt collection laws offer more protection

The Fair Debt Collection Practices Act (FDCPA) is a landmark federal law governing what debt collectors can, and cannot, do when engaging with individuals to try and recover an alleged debt. Creditors, including debt collection agencies, are prohibited from doing several things in Indiana to collect on a debt, including the following:

  • Debt collectors cannot harass you.
  • Debt collectors cannot rely on false information, use inappropriate or offensive language, threaten you, or accuse you of false crimes.
  • Debt collectors are prohibited from calling you at your place of employment or contacting third parties (e.g., friends and family members) about your alleged debt.
  • Debt collectors cannot contact you prior to 8:00 a.m. or after 9:00 p.m.

Dispute debt collection efforts in Indiana

Under Indiana law, individuals have the legal right to dispute debt collection efforts. Individuals also possess the right to receive a written notification about the debt. If the individual believes the debt is inaccurate, they have the legal right to dispute the collection efforts in writing. The debt collection agency must respond to an individual’s objection by conducting an investigation. If the debt collector cannot verify the debt, they are legally obligated to cease their collection efforts.

Send a Debt Validation Letter to force debt collectors to verify the debt before they continue collection efforts. If they can’t validate the debt, then they must stop bothering you about it.

Debt collectors have to collect a debt before the statute of limitations runs out

According to Indiana law, debt collectors have a deadline to try and recover a debt. This period of time is known as the statute of limitations. This is a state law that prevents debt collectors from suing people over an old debt. In other words, if a debt collector fails to file a collection lawsuit against an alleged debtor during the applicable time period, the debt collector loses the right to file an action from that point on.

Check out our article on Indiana Statute of Limitations on Debt.

However, it is important to note the Indiana statute of limitations on debt can last anywhere from six years to ten years, depending on the type of debt in question. 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.

The table below further outlines the statute of limitations on different types of debt in Indiana:

Statute of Limitations on Debt in Indiana

Debt Type Deadline in Years
Auto loan 4
Sale of goods 4
Written contracts 4-10
Medical debt 6-10
Credit card 6
Oral contracts 6
Judgment 20

Report debt collectors who harassed you

If you are being subjected to harassment or threats by a debt collector, do not throw your hands up in despair. Both Indiana state law and federal law provide statutory rights and protections applicable to these situations.

Under federal law, you may want to consider filing a complaint against the debt collector with the Consumer Financial Protection Bureau (CFPB) and/or Federal Trade Commission (FTC).

Under Indiana law, the Collection Agency Division of the Secretary of State is empowered to handle complaints regarding alleged violations by debt collectors and debt collection agencies. It is important to understand that, in the Hoosier State, harassment of consumers is not tolerated or acceptable, without regard to the nature or circumstances of the debt.

In addition, Indiana regulatory authorities do not allow illegal or improper collection efforts. If someone is subjected to illegal or harassing collections actions by a creditor or debt collector, it is important to research and develop an understanding of your legal rights and protections. You should also take advantage of the resources and tools offered by SoloSuit.

If a debt collector in Indiana violates state and/or federal law, it is also important to know you have the option to file a lawsuit against the debt collector. If you opt to file suit against a debt collector, you may seek financial restitution for the harms and losses stemming from the debt collector’s unlawful and improper actions, as well as court costs and attorney fees.

Key Takeaways

Indiana debt collection laws were created to keep consumers safe from abuse and harassment. These laws even the playing field and make it easier for consumers to defend themselves in and out of court. Here are some key takeaways on this article on Indiana debt collection laws:

  • If you are contacted by a creditor or debt collection agency, do not fret. You have legal rights and protections under both federal law and Indiana law.
  • If you are being subjected to harassment by a debt collector, you may have grounds to file a legal action under the aforementioned FDCPA, and other laws, to potentially recover compensatory damages.
  • Debt collectors can only contact you between the hours of 8:00 am and 9:00 pm. They are also legally prohibited from calling you multiple times per day.

If you’ve been sued for a debt in Indiana, respond to the case with SoloSuit’s Debt Answer form and increase your chances of winning by 7x. Check out this video to learn more:

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