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How to Get Debt Relief in Indiana

Dena Standley | October 19, 2022

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

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.

When you get the debt relief you need ^^

Summary: If you're struggling with debt in Indiana, SoloSuit can help you find the relief you need.

Debt relief is supposed to help you stay on top of your finances. If you can reduce the principal amount you owe, the interest you are paying, or pay off your debt faster, you will save yourself a substantial amount of money and reduce your anxiety about finances.

Usually, people seeking debt relief are borrowers with so much debt that they cannot keep up with their ongoing bills. Have you found yourself in such a place? Debt relief may be an option.

Provisions for debt relief vary by state. Some states have laws that protect borrowers from getting into too much debt while offering ways out if you find yourself in overwhelming debt. As a resident of Indiana, you may have several options. Different debt relief options suit different circumstances. Be sure to vet each way out to determine whether it's the best option for your situation.

Now, let's explore a few ways to get debt relief in Indiana.

Work out a debt management plan

Nonprofit debt counseling agencies may get your creditors to reduce your interest rates, forgive late fees, or reduce monthly payments. Your counselor can also help you design a sustainable budget based on your income. You'll learn how to reduce your expenses and stay on top of your finances. There's usually an enrollment fee that the agency is obligated to tell you about before signing up.

Debt management plans work for unsecured loans like medical and credit card debts. The debt counselor contacts your creditors to see if they are willing to help. Most debt management plans can get you out of debt within five years. But you have to commit to not taking on more credit during the program.

Here's what you need to know about debt management plans:

  • Creditors are not obligated to participate.
  • You cannot access your credit cards or open new credit lines for the entire program.
  • You typically get out of debt in five years.

See a list of federally approved credit counseling agencies in Indiana.

Debt consolidation

To consolidate all your debts, you take out one large loan with a lower interest loan to pay off your existing debts. Debt consolidation works best if you have a good credit score because that's the only way to get low-interest personal loans. If not, you may need a cosigner. Otherwise, it's pointless to take out a higher-interest loan and risk sinking deeper into debt.

You can open a new credit card account with a 0% APR introductory offer as an alternative to a personal loan. You then transfer your existing debt to the new card.

Some pointers on debt consolidation:

  • It helps you stay on top of your finances with one predictable monthly payment.
  • It works best if you have a high credit score.
  • It's easy to accrue more debt if you continue using your paid credit cards.

Use caution when considering debt consolidation. Many people find themselves in worse financial shape because they consolidated debt, freeing up room on revolving credit, then resumed negative spending habits. Consider first if consolidating your debts will work to your advantage before leaping.

DIY negotiations

You can get debt relief directly from your creditors. All you have to do is approach them and explain your situation. Some may reduce the interest rates, waive late fees, review monthly payments, or settle for a percentage of what you owe.

The government has bailed out some credit companies before, so they understand that consumers may also need help. Remember that for them, it's business, so don't take it personally. If one creditor doesn't help, move on to the next. Many credit providers are willing to cooperate because they'd rather take your offer to settle than lose out completely if you decide to file for bankruptcy.

Benefits of negotiating your own debt settlement:

  • No extra fees because you do the negotiations yourself.
  • Some creditors prefer to work with struggling consumers rather than debt relief companies.
  • You can start rebuilding your credit if you stick to the new repayment plan.

Debt relief companies can help

There are many debt relief companies in every state. Some are legitimate, while others are not who they say they are. The Federal Trade Commission (FTC) lists banned debt relief providers on its website as a precaution. Always double-check that you're working with an approved and legitimate company. Read the accompanying case histories to know the kind of crimes blocked debt relief providers committed. Student loan borrowers can also learn how to detect student loan scammers.

Debt relief companies can primarily help you in two ways:

  • Debt consolidation: Some debt relief companies offer loans to help you pay off your delinquent accounts. You then pay them an agreed-upon monthly installment to clear the new debt. Always confirm that when they say debt consolidation, they don't mean debt settlement because that may hurt your credit further without your knowledge.

  • Debt settlement: As we saw earlier, you can negotiate a settlement for yourself. However, you may prefer to use a debt relief company if you need help. Debt relief companies charge a percentage of the forgiven amount as fees and may also require monthly maintenance fees. You will also need to open a dedicated "savings account" where you deposit money monthly. As the savings accumulate, the company can approach your creditors with an offer. These agencies will typically let your accounts become delinquent to have a better shot at negotiating a settlement.

What to remember about debt settlement

Whether you go it yourself or hire someone to negotiate a settlement for you, debt settlement has some repercussions you need to know.

  • The IRS may see the forgiven amount as taxable income if it's more than $600
  • Settling debt affects your credit score.
  • Creditors are not obligated to settle.
  • Debt relief companies help only a fraction of those who sign up to clear all or some of the enrolled debt.

To learn more about the potential effects of debt settlement, check out this video:

Utilize these debt relief programs in Indiana

As a resident of Indiana, you have access to special state programs that can help you stay financially afloat and get the relief you need from the stresses of debt. Check these Indiana debt relief programs out to see if you qualify:

  • Temporary Assistance for Needy Families (TANF): Provides cash assistance and supportive services to assist families with children under age 18, helping them achieve economic self-sufficiency.
  • Supplemental Nutrition Program (SNAP): The Supplemental Nutrition Assistance Program provides food assistance to low and no income people and families living in the United States. It is a federal aid program administered by the Food and Nutrition Service of the U.S. Department of Agriculture, however, distribution of benefits occurs at the state level. In Indiana, the Family and Social Services Administration is responsible for ensuring federal regulations are initially implemented and consistently applied in each county.
  • INconnect Alliance: Comprised of fifteen Aging and Disability Resource Centers, serving sixteen areas, throughout Indiana, this program helps Indiana residents find the information and resources they need as they navigate the complex care puzzle for seniors and the system of long term services and supports.
  • Healthy Indiana Plan (HIP): Makes health coverage available to low-income adults ages 19 to 64.
  • The Salvation Army: The Salvation Army of Indiana offers a variety of services to those who might be struggling financially. These include disaster relief, unemployment services, youth education and activity groups, etc.

Filing for bankruptcy in Indiana

Bankruptcy is not a popular debt relief option. However, there are reasons businesses and individuals end up applying for it. In 2021 alone, there were 413,616 (business and non-business) bankruptcy filings in the USA. Indiana ranked tenth in the number of bankruptcies that year, with 10 out of 100 residents filing.

Going bankrupt allows you to start over. Your debts are dropped. Any lawsuits or wage garnishments stop immediately.

You may not want to file if you are scared of your financial woes going public. You may also hesitate to let go of your property to pay off debt, or you may not want the stain on your credit report for 5-10 years. However, If you are left with no other way out, research the benefits of filing and how to proceed. It may be the break you need.

Finding debt relief is possible if you talk with a credit counselor, negotiate with your creditors, hire a debt relief company, or file for bankruptcy. Even if you waited too long and a debt collector sues you, Solosuit can help you win in court.

What is SoloSuit?

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.

Respond with SoloSuit

"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

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