Indiana: Credit, Debt & Bankruptcy

Federal law sets the floor in every state. What changes a real Indiana case is the Indiana Code. It sets how long a creditor has to sue, how much of a paycheck is reachable, and what a debt buyer must put in front of the judge before the case even starts.

That last one is the piece most people never hear about. Indiana added it in 2019, and it applies to a large share of the collection suits filed here.

Your official Indiana resources

These are the state-level starting points most Hoosiers dealing with debt problems need:

• IndianaLegalHelp.org — the statewide portal for free and low-cost civil legal services, plain-language forms, and a calendar of free legal clinics, searchable by county.
• Indiana Courts Self-Service Legal Center — the court system's own forms and self-representation materials.
• Indiana Attorney General — Consumer Protection Division — where complaints about collectors and credit repair companies are filed.
• U.S. Bankruptcy Courts — Indiana has two federal districts: Northern (South Bend, Fort Wayne, Hammond) and Southern (Indianapolis, Evansville, New Albany, Terre Haute).

If you need	Official starting point
To respond to a debt lawsuit	IndianaLegalHelp.org or the Self-Service Legal Center
To report a collector or a credit repair company	Attorney General consumer complaint
Free or low-cost legal help	IndianaLegalHelp.org or the LSC legal aid locator
Bankruptcy forms and local rules	Your district's bankruptcy court site

Debt lawsuits in Indiana

Most Indiana collection cases start in small claims or in a circuit or superior court, and the summons served on the defendant sets the response date. That printed date controls.

Indiana has one rule worth knowing before anyone decides whether to respond. It is Ind. Code §24-5-15.5, and it applies to cases brought after 2019. A debt buyer that sues must attach two things to its first filing.

The first is proof of the agreement. That means a copy of the signed contract, if one exists. If not, it means a document handed to the debtor while the account was active. For a revolving credit account, a charge-off statement is enough. So is the most recent monthly statement showing a purchase, a last payment, or a balance transfer.

The second is the paper trail. The debt buyer must attach a dated list of every prior owner of the debt, starting with the original charge-off creditor. It must also attach the assignment papers or bill of sale showing it owns the account now. Failing to comply is a deceptive act. The Attorney General can act on it under Ind. Code §24-5-0.5, which treats an attempt to collect a debt as a consumer transaction.

Missing the response date lets the creditor ask for a default judgment, which opens the door to garnishment. Start with what to do when you are sued for a debt and the debt lawsuit response checklist.

Statute of limitations basics

Indiana splits its limitation periods by the kind of paperwork behind the debt.

Written contracts for the payment of money carry a six-year deadline under Ind. Code §34-11-2-9. So do promissory notes and bills of exchange signed after August 31, 1982. Accounts and contracts not in writing also get six years, under Ind. Code §34-11-2-7. Written contracts not for the payment of money run ten years under §34-11-2-11. Suits on a deposit account are limited to two years.

An expired limitations period is generally a defense that has to be raised in the case. Courts do not apply it automatically. Read how the statute of limitations on debt works before making any decision about an old account. Indiana also treats every judgment of a court of record as satisfied after twenty years, under Ind. Code §34-11-2-12.

Wage garnishment and protected income

Indiana's cap starts where the federal one does. Under Ind. Code §24-4.5-5-105(2), the maximum taken from disposable earnings in a workweek is the lesser of 25 percent of those earnings, or the amount by which they exceed 30 times the federal minimum hourly wage.

The Indiana-specific part sits in the same subsection. Upon a showing of good cause by the individual as to why the amount should be reduced, the cap becomes an amount less than 25 percent but at least 10 percent of that week's disposable earnings. That is a written invitation to ask, and no employer or creditor will raise it for you.

Different limits apply to child support. Social Security and certain other federal benefits are generally protected from commercial garnishment regardless of state law, and money already sitting in an account is governed by Indiana's exemption list rather than the garnishment cap. Our wage garnishment guide covers the federal baseline, and the bank levy guide covers frozen accounts.

Bankruptcy in Indiana

Bankruptcy is federal, and Indiana has two districts. The Northern District has offices in South Bend, Fort Wayne, and Hammond. The Southern District sits in Indianapolis, with courthouses in Evansville, New Albany, and Terre Haute. Each posts local rules, forms, self-representation tools, and a page for people filing without an attorney.

State law decides what a filer can protect. Indiana opted out: Ind. Code §34-55-10-1 says an individual debtor domiciled in Indiana is not entitled to the federal exemptions in 11 U.S.C. §522(d), so the Indiana list applies.

Ind. Code §34-55-10-2(c) sets the statutory base amounts: $15,000 for property used as the debtor's residence, available individually to joint debtors holding as tenants by the entireties; $8,000 for other real estate or tangible personal property; and $300 for intangible personal property, including deposit accounts and cash. Retirement plans, health savings accounts, and qualified tuition programs get their own protection.

Those base numbers do not stand still. Ind. Code §34-55-10-2.5 directs the Department of Financial Institutions to adopt a rule setting new amounts every six years, based on changes in the Consumer Price Index. Confirming the current figures with the court, legal aid, or a bankruptcy attorney is the safer approach.

For the big picture, start with our bankruptcy hub, the Chapter 7 guide, and filing without a lawyer. If bankruptcy is not the right fit, the debt relief options page compares the alternatives.

Free and low-cost legal help

Many Hoosiers qualify for free help and never use it. IndianaLegalHelp.org connects people to free and low-cost legal services by county, hosts plain-language forms and guides, and lists free legal advice clinics.

The Indiana State Bar Association is direct about its own role: it is a voluntary organization that does not provide legal advice or referrals, and it points the public to IndianaLegalHelp.org instead. The Southern District bankruptcy court keeps a free or low cost legal help page and a pro bono program, and the LSC legal aid finder covers every state.

Common mistakes to avoid

• ✕Not reading what the debt buyer attached to the complaint. Ind. Code §24-5-15.5-5 requires account documentation plus a chronological list of every prior owner starting with the original charge-off creditor.
• ✕Assuming 25 percent is fixed. Ind. Code §24-4.5-5-105 lets a judgment debtor show good cause for a lower figure, down to a floor of 10 percent of disposable earnings.
• ✕Treating a phone call as harmless. Indiana treats acknowledgments and promises as evidence of a new contract only in writing and signed, but a payment is handled separately under Ind. Code §34-11-9-3.
• ✕Quoting an Indiana exemption figure from an old article. The base amounts in Ind. Code §34-55-10-2 are adjusted by Department of Financial Institutions rule every six years.
• ✕Paying a credit repair company before the work is done. Indiana treats that as a deceptive act unless the company is bonded, and the federal CROA bans advance fees everywhere.
• ✕Paying for help before checking IndianaLegalHelp.org and the Self-Service Legal Center, which are free.

Credit repair companies in Indiana: registration, bond, and how to check

Indiana treats credit repair as a credit services organization under Ind. Code §24-5-15. The definition in §24-5-15-2 is broad. It reaches anyone who takes payment to improve a buyer's credit record, history, or rating. It also reaches those who promise to obtain credit, get a lower interest rate, or run debt settlement.

Indiana does not keep a public credit repair registry. What it requires instead is a bond. Ind. Code §24-5-15-8 says a credit services organization must get a $25,000 surety bond before doing business here. The bond runs to the state, for the benefit of anyone harmed by a violation, and a copy must be filed with the Attorney General. A letter of credit for the same amount can be accepted instead, and it has to be filed first too.

Money up front: Ind. Code §24-5-15-5(1) makes it a deceptive act to take money before the agreed work is done, unless the company has that bond or letter of credit. The same section bans false or misleading claims. It calls out one in particular: a promise to erase bad credit is banned unless the pitch clearly says this only works when the credit history is wrong or out of date.

Contract rules: Ind. Code §24-5-15-7 requires a written contract, dated and signed by both sides. Next to the signature line it needs a note in at least 10-point boldface. That note must say the buyer may cancel any time before midnight of the third business day after the deal. The contract also needs the full price and a detailed account of the services and results promised.

If the rules are broken: Ind. Code §24-5-15-9 lets a harmed person recover the greater of twice actual damages or $1,000, plus attorney's fees. A violation is also a deceptive act under Ind. Code §24-5-0.5.

How to check and complain: ask for the Indiana bond and confirm it was filed with the Attorney General before signing, then look the company up in the CFPB complaint database. Complaints go to the Indiana Attorney General and the CFPB.

The federal floor everywhere: the Credit Repair Organizations Act (15 U.S.C. §1679) bans advance fees, requires a written contract, and gives a three-business-day right to cancel. Accurate, timely information cannot be removed by anyone. How to vet an offer is on credit repair services.

Finding a bankruptcy attorney in Indiana

An Indiana bankruptcy case is filed in the district covering the filer's county, either the Northern District or the Southern District. Both post local rules, local forms, electronic self-representation systems, and pages for people filing without an attorney.

Because the Indiana State Bar Association does not run a referral service, the practical starting points are IndianaLegalHelp.org and the courts' own free or low cost legal help pages. The LSC legal aid locator finds the federally funded program for any Indiana address, and the NACBA member directory lists consumer bankruptcy attorneys by ZIP code. The ordered path, what a consultation costs, and the questions to ask before paying are on how to find a bankruptcy attorney near you.

Frequently asked questions

Can my wages be garnished in Indiana for credit card debt?

Yes, once a creditor has a judgment. Under Ind. Code §24-4.5-5-105(2) the maximum taken from a workweek's disposable earnings is the lesser of 25 percent of those earnings or the amount by which they exceed 30 times the federal minimum hourly wage. The same subsection lets a judgment debtor show good cause for a lower amount.

What is Indiana's statute of limitations on credit card debt?

Six years for most written debts. Ind. Code §34-11-2-9 gives six years for actions on promissory notes, bills of exchange, and other written contracts for the payment of money executed after August 31, 1982. Ind. Code §34-11-2-7 gives six years for accounts and contracts not in writing, and actions on a deposit account are limited to two years.

How low can an Indiana garnishment go?

Ind. Code §24-4.5-5-105(2)(a) sets 25 percent as the ceiling, then says that upon a showing of good cause by the individual as to why the amount should be reduced, the figure becomes less than 25 percent and at least 10 percent of that week's disposable earnings. The reduction has to be asked for.

What does a debt buyer have to file with an Indiana lawsuit?

Under Ind. Code §24-5-15.5-5, a plaintiff debt buyer must attach to the initial pleading either the signed contract or a document provided to the debtor while the account was active, plus a chronological list of every previous owner with transfer dates, beginning with the original charge-off creditor, and the assignment documentation or bill of sale.

Can a payment restart the statute of limitations on an old debt in Indiana?

Indiana handles admissions and payments separately. Ind. Code §34-11-9-1 says an acknowledgment or promise is not evidence of a new or continuing contract unless it is in writing and signed by the party charged. Ind. Code §34-11-9-3 says the chapter does not lessen the effect of a payment, so the dates are worth checking first.

Can Indiana filers use the federal bankruptcy exemptions?

No. Ind. Code §34-55-10-1 states that an individual debtor domiciled in Indiana is not entitled to the federal exemptions provided by 11 U.S.C. §522(d), so the Indiana list in Ind. Code §34-55-10-2 applies instead.

What is Indiana's homestead exemption in bankruptcy?

Ind. Code §34-55-10-2(c)(1) sets a statutory base of $15,000 for real or personal property used as the debtor's or a dependent's personal or family residence, available individually to joint debtors for property held as tenants by the entireties. Ind. Code §34-55-10-2.5 has the Department of Financial Institutions adjust the amount by rule every six years.

Where do I find legal aid in Indiana?

IndianaLegalHelp.org connects people to free and low-cost civil legal services by county and lists free legal advice clinics. The Indiana State Bar Association does not provide referrals and points the public there. Both bankruptcy courts publish their own free or low cost legal help pages.

Do credit repair companies have to be registered in Indiana?

They have to be bonded, not registered. Ind. Code §24-5-15-8 requires a credit services organization to obtain a $25,000 surety bond, or an irrevocable letter of credit the Attorney General accepts instead, and to file a copy with the Attorney General before doing business in Indiana. Charging before the work is finished without that bond is a deceptive act under §24-5-15-5.

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