How to Settle a Debt in Indiana

Dena Standley | December 01, 2022

Edited by Hannah Locklear

An outstanding debt can cause you sleepless nights if the debt collector is constantly contacting you, demanding that you pay. They may call at odd hours of the day or night and leave countless emails or voicemails.

If you ignore their attempts to collect, they may sue you for the debt, fees, interest, and legal costs. Indiana debt collection laws allow debt collectors to take you to court before the statute of limitations on debt expires.

To avoid all this trouble, settling the debt is often the better option, and you will eventually be able to improve your credit score as a result. This article will take you through the steps to settle a debt. We will also give you essential information about debt settlement in Indiana.

Three steps to settle a debt in Indiana

Consumers can pursue debt settlement if they are burdened with credit card debt, private student loans, personal loans, and medical bills. You can make a debt settlement offer at any stage of the collection process. The following steps cover how to settle a debt after you’ve received a lawsuit.

Take a look at this video to learn more about these three steps:

1. Respond to the debt lawsuit with an Answer

Even though you may have decided to settle the delinquent debt, responding to the lawsuit is a mandatory step. Otherwise, the settlement offer you want to make will be worthless. Consequently, if you jump to making a settlement offer before filing an Answer, the court may give the creditor a default judgment—because they will assume you ignored the lawsuit.

Once you receive the suit, respond before the deadline for filing an Answer in Indiana, which is 20 days.

Pay attention to all sections and answer to the best of your ability. For instance, the Complaint document requires you to admit, deny, or deny for lack of knowledge for each allegation the creditor made against you. Next, list any affirmative defenses that can help your situation.

2. Make an offer to start negotiations

Once you have filed your Answer successfully, think about how much you want to offer your creditor. There isn't a standard figure that dictates how much to offer a debt collector. Rather, it depends on your financial situation, the debt you owe, and the creditor’s position.

Typically, creditors rarely go below 45%, and their offer often falls between 60% to 80% of the original amount owed. Debt counselors recommend you begin the offer at 30% to 40% to give you room for negotiation. So, before making an offer, calculate the maximum amount you can afford to pay and then offer a little less than that.

Here’s what your offer might look like:

“I see you’re suing me for [$500] for [case number]. I don’t have that kind of money and I don’t agree with the amount. But I do have [$250] that I can pay within 30 days to settle the debt in full. Let me know if you accept.”

Alternatively, you can use SoloSettle to send your offer. SoloSettle takes care of the settlement negotiation process for you. When the creditor or debt collector accepts your offer, or makes a counteroffer, their response will be sent directly to you. You may receive a few counteroffers that you’ll have to consider, but using SoloSettle simplifies the process and takes the weight of communicating with creditors and debt collectors off your shoulders.

3. Get the settlement agreement in writing

Once the negotiations have been successful and the creditor accepts your offer, do not make any payments until the creditor accepts and puts it in writing. Many consumers have suffered at the hands of debt collectors who promised to write off their debt after negotiations but were later sued or harassed for the remaining amount.

Having it in writing forces them to keep their word and ultimately settle the debt. View a sample debt settlement agreement to learn more about what kind of information should be included. Most debt collectors and creditors will draft the settlement agreement for you, so be sure to review it carefully before signing.

SoloSettle’s software takes care of the negotiation process for you.

Let's look at an illustration to explain the steps above.

Indiana debt collection laws

Creditors and debt collection agencies are allowed by the Indiana government to contact consumers directly for a long-standing debt. However, they are required to abide by the Indiana Code, Title 28, 1-29 for Debt Management Companies.

The Indiana Code asks consumers to consider and acknowledge that debt settlement and management plans are not right for all individuals and carry some risks, including:

• Debt management companies may receive compensation from your creditors.
• Nonpayment of debts under a debt management plan can result in damage to your credit.
• Creditors may increase finance charges and other fees.
• Creditors may decide to file a lawsuit to collect the debt.
• Reduction of debt can result in taxable income, increasing your tax liability, even though you didn’t receive any money.

Most creditors would prefer a fair settlement vs. the expense of a lawsuit, but it is their right to refuse negotiations unless there is an arbitration clause in the original agreement. If there is an arbitration clause, you can explore SoloSuit’s Motion to Compel Arbitration to move your case out of court.

What’s the best debt settlement company in Indiana?

SoloSettle is superior to other debt settlement companies because you can settle a debt of any size with a company that has a proven reputation for legitimacy. Unlike other debt settlement companies, you negotiate directly, through email, with your creditors. SoloSettle facilitates the communication, but you decide what settlement terms you can agree to without being forced into an agreement you may be unable to uphold.

The best debt settlement company should help you manage your current debts without plunging you into more financial trouble. Additionally, they should not expect you to pay upfront fees without showing you the progress they've made in settling your debt.

Below are other good debt settlement companies you might consider:

• NewEra Debt Solutions: This company does not charge an initial fee or have hidden add-on fees. They only take their cut when the settlement deal is done.


• Century: The specialists at Century first evaluate your debt situation and customize a plan to best suit your debt needs based on your financial ability.


• IndiananDebtRelief.org: This company gives you a free analysis and savings estimate and then works with you on viable options to settle your debt.

The Fair Trade Commission has a long list of blacklisted debt relief companies and individuals. Visit the page before settling on any debt settlement company. Additionally, check the company’s Better Business Bureau (BBB) profile to assess its accreditation and third-party reviews.

Choose the best method to contact the debt collector

Communicating with debt collectors is always challenging because they want to control the narrative. Regardless of the method you use, be aware of this fact and always think carefully before responding to their questions or requests. The three methods below are often used to communicate with debt collectors, especially when it comes to making a settlement offer:

• Phone: Discussing a settlement deal over the phone is not the best option because you can only prove you had an agreement with them if you record the conversation. Luckily, Indiana Code § 35-31.5-2-176 allows for one-party consent, meaning you can record the conversation with the debt collector without them knowing.


• Mail: Communicating via mail is more favorable because every interaction has a paper trail, but the negotiation process may take longer than you'd wish. On the other hand, it gives you time to keenly read through the letter from the creditor and plan your next response. Use certified mail to ensure the collection agency receives the mail.


• Email: Communicating via email is great because delivery is instant, and you can get a response within minutes. In addition, you will have proof of the settlement discussion, and the debt collector cannot deny a promise made in writing.

If anything is unclear as you communicate, ask for clarification because debt collectors try to manipulate or confuse you to make the settlement agreement vague.

How to get debt relief in Indiana

Apart from debt settlement, there are other options you can explore to help you get out of debt. Debt relief companies and credit counseling agencies help you choose the best plan for your situation.

These institutions perform varying functions. Some help you develop a debt management plan, while others provide necessities such as food, healthcare, and education. These services help you save money to pay off debt or get back on your feet. Check out our complete guide for debt relief in Indiana to learn more.

SoloSettle can help you settle your debt

Debt settlement can be what you need to find renewed hope for your financial situation. If you are being pursued for a legitimate debt, SoloSettle can assist you in settling the debt for yourself, no sketchy debt settlement companies involved.

SoloSettle makes negotiating easy by providing a structured process. You can use our web-app to send and receive offers from collectors. It will draft offers for you and protect you from the potential lies and bullying of debt collectors. Most importantly, SoloSettle makes sure all of the proper legal language is included to protect your rights when communicating with the creditor or debt collector. When a settlement agreement is reached, SoloSettle manages the settlement agreement documentation for you and protects your sensitive financial information from the collectors, preventing them from over-charging you.

Check out this review from a real SoloSettle customer:

“I'm very thankful for SoloSettle.. Having a third party negotiate the settlement was instrumental in resolving this case and saved me from two giant headaches: 1) I didn't have to deal with the plaintiff's lawyer and 2) I didn't have to go to court. I also love that the payment was processed through SoloSettle. I was nervous about sharing my personal financial data with the other side, but SoloSettle protected that for me. I hope I never get sued again, but if I do, I would use SoloSettle again in a heartbeat.

SoloSettle really saved me a ton of time and heartburn and kept me from having to be my own lawyer in court.”

At SoloSuit, we know that dealing with financial struggles and debt collectors is a stressful affair, and we are here to help.

Frequently Asked Questions

Do debt settlement programs in Indiana work?

Yes, debt settlement programs are effective in assisting you to become financially free if you stick to the plan the debt counselors recommend. Further, genuine debt settlement programs in Indiana help eliminate the pressing debt that may cause further financial problems if you are sued and the creditor wins the case. However, debt settlement programs often leave your credit score in disarray for a long time and require a substantial financial commitment. Further, you need to be careful to avoid scams that can look like legitimate debt settlement opportunities.

How do you negotiate debt settlement?

Debt settlement negotiations start when you or the creditor makes the first contact requesting either party to settle the debt. SoloSettle helps you make the initial contact seeking debt settlement and carry out the negotiation process on your own. It is a good idea to make the initial offer for less than the maximum you can pay to settle a debt. Offering less than you could conceivably pay allows some room for negotiation. The creditor or collector may counter the offer, and you can counter back until you reach an agreed-upon amount that you can afford to pay.

How does debt settlement affect my credit score?

The extent to which your credit score is affected by debt settlement depends on your credit profile. Debt settlement will significantly lower your score if you have a good credit score. But if you already had a low score with many negative entries, the actual point decrease may be less noticeable.

That being said, settling a debt won’t hurt your credit score as much as paying nothing at all. This is why debt settlement can be a great option for many consumers; it lets you pay off your debt for less and move on with your life.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

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Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

• Absolute Resolutions Investments LLC
• Accredited Collection Services
• Alliance One
• Amcol Clmbia
• American Recovery Service
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• Asset Recovery Solutions
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• Autovest LLC
• Cach LLC
• Cavalry SPV I LLC
• Cerastes LLC
• Colinfobur
• Covington Credit
• Crown Asset Management
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• Eagle Loan of Ohio
• Educap
• Estate Information Services
• FIA Card Services
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• Howard Lee Schiff
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• Integras Capital Recovery LLC
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• Jefferson Capital Systems LLC
• LVNV Funding
• Mannbracken
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• Medicredit
• Michael J Adams PC
• Michael J Scott
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• Mullooly, Jeffrey, Rooney & Flynn
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• MRS Associates
• National Collegiate Trust
• Nationstar Foreclosure
• Northstar Capital Acquisition
• NCEP LLC
• NRC Collection Agency
• OneMain Financial
• Palisades Collection LLC
• Pallida LLC
• Paragon Revenue Group
• Pinnacle Collections Agency
• PMAB LLC
• Portfolio Recovery Associates
• Provest Law
• PYOD LLC
• Reunion Student Loan Finance Corporation
• Revenue Group
• Regents and Associates
• RSIEH
• Salander Enterprises LLC
• Second Round Sub LLC
• Security Credit Services
• Sherman Financial Group
• Suttell and Hammer
• T-Mobile
• Transworld Systems
• Tulsa Teachers Credit Union
• UCB Collection
• Velo Law Office
• Velocity Investments
• Waypoint Resource Group
• Weinberg and Associates
• Wolpoff & Abramson

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

• Bank of America
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• Chase
• Credit One Bank
• PayPal Synchrony Card
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