Indiana Debt Collection Laws: Know Your Rights in 2024
Indiana residents are protected by the FDCPA and state laws requiring collection agencies to be licensed. You have six years before the statute of limitations expires on most consumer debts. If collectors violate your rights, you can file complaints or sue for damages up to $1,000.
Respond to LawsuitIf you live in Indiana, the Fair Debt Collection Practices Act (FDCPA) offers your strongest defense against abusive debt collectors. Indiana law requires all debt collection agencies to hold a valid state license. For common consumer debts like credit cards and medical bills, Indiana enforces a six-year statute of limitations.
What Are the Debt Collection Laws in Indiana?
Indiana maintains several state-level debt collection regulations. You’ll find these outlined in Indiana’s statutes on consumer sales and collection agencies.
Been Sued by a Debt Collector in Indiana?
You have only 20-23 days to respond to your court summons. Solo has helped 280,000 people respond to debt lawsuits and settle for less.
Answer Your SummonsThe first law provides general consumer protection against third-party collectors. The law mirrors the FDCPA, which bans harassment and unfair collection tactics.
The second law regulates debt collection agencies through mandatory licensing. Every collection agency operating in Indiana must register with the state.
Federal Laws Offer the Strongest Protection
Both Indiana laws work alongside the federal Fair Debt Collection Practices Act. The FDCPA protects you from harassment and abusive collection practices. Every Indiana resident receives protection under this federal law.
The FDCPA exists to shield consumers from third-party debt collectors. The law clearly defines what collectors can and cannot do.
What Debt Collectors Must Do
- Send you a debt validation letter within five days of first contact
- Verify the debt if you dispute it in writing
- Stop contacting you if you request it in writing
- Identify themselves as debt collectors in all communications
What Debt Collectors Cannot Do
- Call you before 8 a.m. or after 9 p.m.
- Contact you at work if you tell them not to
- Harass, threaten, or use profane language
- Lie about the debt amount or their identity
- Threaten actions they cannot legally take
- Discuss your debt with others
Indiana stands out as one of the minority states requiring collection agencies to hold licenses.
Indiana Requires Debt Collectors to Be Licensed
Not every state requires collection agencies to obtain licenses. Indiana does require licensing for every collection agency in the state.
Indiana law defines a “collection agency” as any individual or firm attempting to collect debts. Collection agencies must register through the Nationwide Multistate Licensing System (NMLS). The Indiana Secretary of State, Securities Division issues these licenses.
Request Licensing Information
When a debt collector contacts you, ask for their licensing information. You have every right to verify that collection activity is lawful. Requesting this information helps you avoid debt collection scams.
Collectors must send you a debt validation letter before or within five days of first contact. The letter should include basic debt information and your right to dispute. If licensing information isn’t included, request it immediately.
What You Can Do if a Debt Collector Breaks the Law
Debt collectors who violate your rights deserve to face consequences. You can hold them accountable by filing a complaint.
File a Complaint With the Indiana Secretary of State
Collection agencies that break Indiana law can be reported. File your complaint with the Indiana Secretary of State. Gather all supporting documents before filing. The Indiana Attorney General’s office provides helpful tips for filing complaints.
File a Complaint With the CFPB
FDCPA violations should be reported to the Consumer Financial Protection Bureau. The CFPB protects consumers and enforces consumer protection laws. The agency empowers and educates consumers nationwide.
File a Lawsuit Against the Debt Collector
You can sue third-party debt collectors who violate the FDCPA. State or federal court may hear your case. Speaking with an attorney is your best approach for filing a lawsuit.
Many attorneys work on contingency, meaning no upfront fees. The attorney can request fee reimbursement as part of the lawsuit. If you win, you could recover actual damages like lost wages. You may also receive up to $1,000 in statutory damages.
What Is the Statute of Limitations for Debt Collection in Indiana?
Statutes of limitations are state laws limiting lawsuit timeframes. After the statute expires, collectors cannot sue you for the debt. They can still contact you about old debt.
Indiana’s statute of limitations varies by debt type. The following timeframes apply to most situations:
| Debt Type | Statute of Limitations |
|---|---|
| Credit cards | 6 years |
| Written contracts | 6 years |
| Medical debt | 6 years |
| Contract of sales | 4 years |
What Debt Collectors Can Do to Collect Debt in Indiana
Understanding legal collection methods helps you identify illegal practices. Indiana allows debt collectors to sue for judgments and repossess secured property.
Debt Collectors Can Sue for a Judgment
Debt collectors can take you to court for unpaid debts. If the collector wins, the judge issues a judgment. The judgment allows the collector to pursue wage garnishment, a bank levy, or a property lien.
In Indiana, original creditors, debt collectors, and debt buyers can all obtain wage garnishments with valid court judgments.
If you’re served with a court summons in Indiana, respond quickly. You have 20 days to answer if served personally. You have 23 days if served by mail. Missing these deadlines hurts your case. Review Upsolve’s guide to responding to an Indiana court summons.
If you need help responding to a debt lawsuit, our partner Solo can help. Solo has helped 280,000 people respond to lawsuits and settle debts. They offer a 100% money-back guarantee.
Debt Collectors Can Repossess Your Car
Missing car payments puts you at risk of vehicle repossession. Lenders don’t need court orders to repossess vehicles. If you default on your auto loan, repossession becomes a real threat.
Repossession can happen after just one missed payment. Review your auto loan contract to understand your specific terms.
Need Help With Debt Relief? Here Are Your Options
Living with overwhelming debt takes a toll on your mental health. Consumer credit counseling offers a great starting point. Meeting with an accredited nonprofit counselor provides personalized guidance.
Credit counselors might suggest a debt management plan, debt consolidation, or bankruptcy. Our partner Cambridge Credit Counseling can help you create a payment plan that works.
Bankruptcy offers a powerful legal tool for reclaiming your finances. If debt has become unmanageable, filing bankruptcy might provide the fresh start you need. Bankruptcy immediately stops all collection efforts, including wage garnishments.