Debt relief in Indiana: collection rules, time limits and your options
Updated November 9, 2026
Indiana at a glance (checked November 2026)
| Indiana | |
|---|---|
| Time limit to sue on credit cards and open accounts | 6 years |
| Wage garnishment for consumer debt | Up to 25% of take-home pay; a court can lower it to as little as 10% |
| State debt collection law | Collection agencies must be licensed (Indiana Code 25-11) |
| Who licenses debt collectors | Indiana Secretary of State, Securities Division |
| Where to complain | Indiana Attorney General, the Securities Division, and the CFPB |
Debt collection rules in Indiana
A collection agency needs a license from the Indiana Secretary of State's Securities Division, renewed every year, with a bond for each Indiana office (Indiana Code 25-11). You can check an agency's license on NMLS Consumer Access. The Securities Division takes complaints about licensed agencies and can take action against them.
The federal Fair Debt Collection Practices Act sets most of the rules for how collectors behave. A third-party collector can't call before 8 a.m. or after 9 p.m., threaten arrest or a lawsuit it doesn't plan to file, or misstate what you owe. It must send you a validation notice, and if you dispute the debt in writing within 30 days, it has to stop until it verifies the debt. The Attorney General's Consumer Protection Division also takes complaints about collectors.
How long creditors have to sue
Indiana gives creditors 6 years to sue on credit cards and other written promises to pay money, and the same 6 years for open accounts (Indiana Code 34-11-2-9 and 34-11-2-7). The clock usually starts when you default.
A signed written acknowledgment of the debt, or a written promise to pay, can restart the clock, so check how old a debt is before you sign anything or pay. After the limit has run, a collector can still ask you to pay but can't sue you or threaten to. A court judgment, on the other hand, can be enforced for up to 20 years, so don't ignore a lawsuit.
What can be garnished in Indiana
A creditor with a judgment can take the lesser of 25% of your take-home pay or the amount you earn above $217.50 a week, which is 30 times the federal minimum wage (Indiana Code 24-4.5-5-105).
Indiana adds a protection many states don't have: if you can show the court good cause, it can lower the garnishment to as little as 10% of your take-home pay. Indiana Legal Help has a form for asking.
Child support and taxes follow separate rules. Social Security and other federal benefits stay protected from ordinary creditors, even after they're deposited in your bank account.
Ways out of debt in Indiana
- Nonprofit credit counseling can put your cards on one debt management plan, usually at lower rates. Look for an agency accredited by the NFCC or FCAA. Indiana requires debt management companies to be licensed by the Department of Financial Institutions, so check before you sign up.
- A consolidation loan only helps if the new rate beats what you pay now. Check the numbers with our debt consolidation calculator.
- Debt settlement companies can't charge you a fee until they've actually settled a debt, under federal rules. Forgiven amounts can count as taxable income.
- Bankruptcy: Indiana makes you use its own exemption list rather than the federal one. A bankruptcy attorney can tell you what you would keep.
Where to get help or complain
- Indiana Attorney General, Consumer Protection Division takes consumer complaints, including about collectors.
- Indiana Securities Division, collection agencies licenses collection agencies and takes complaints about them.
- Consumer Financial Protection Bureau takes complaints about collectors and lenders nationwide.
- Indiana Legal Help has free legal information and forms and helps you find legal aid.
General information about Indiana law, not legal advice. Checked November 2026.