Debt collection laws in Indiana combine federal rules under the Fair Debt Collection Practices Act and the Consumer Financial Protection Bureau’s Regulation F with state licensing and consumer-protection statutes. Together they control when a collector can call you, what they must put in writing, how much of your paycheck they can take if they win in court, and how long they have to sue you in the first place. If a collector breaks those rules, you can dispute the debt, complain to Indiana regulators, or sue for damages and attorney’s fees.
What a Collector Must Send You First
Before a collector can seriously push you to pay, federal law requires a written validation notice. It must arrive with the first communication or within five days after it.1Consumer Financial Protection Bureau. What Information Does a Debt Collector Have to Give Me About a Debt Under Regulation F, the notice has to spell out:
- The collector’s name and mailing address, and a statement that the communication is from a debt collector.
- The name of the creditor who owned the debt on the itemization date and the creditor who owns it now.
- The balance as of the itemization date, an itemization of interest, fees, payments, and credits since then, and the current total.
- The account number tied to the debt, if there is one.
- A specific end date for a 30-day dispute period, and a statement explaining that you can dispute the debt in writing before that date.2eCFR. 12 CFR 1006.34 – Validation Information
If you never got a validation notice, or the one you got is missing pieces, the collector already has a compliance problem. Hold on to the envelope and the letter. It matters later.
What Collectors Are Not Allowed to Do
The FDCPA and Indiana law both draw hard lines around collector conduct. A few categories cover most of what Indiana consumers run into.
Calling Limits and Hours
Collectors cannot call before 8 a.m. or after 9 p.m. in your time zone without your permission.3Consumer Financial Protection Bureau. When and How Often Can a Debt Collector Call Me on the Phone Regulation F adds a concrete cap: no more than seven calls about the same debt within any seven consecutive days, and after an actual phone conversation the collector must wait at least seven days before calling again.4eCFR. 12 CFR 1006.14 – Harassing, Oppressive, or Abusive Conduct The cap is per debt, so a collector working two of your accounts could technically make fourteen calls in a week, but exceeding the per-debt limit creates a presumption of harassment.
If you tell a collector that a particular time or method of contact is inconvenient, they have to stop using it. If you tell them your employer prohibits personal calls, they cannot call you at work.5Consumer Financial Protection Bureau. 12 CFR 1006.6 – Communications in Connection With Debt Collection
Harassment, Threats, and Lies
Threats of violence, profane language, and repeated calls meant to annoy are all illegal.6Federal Trade Commission. Fair Debt Collection Practices Act So are false statements: a collector cannot lie about the amount you owe, falsely claim to be an attorney or a government official, threaten legal action they do not intend to take, or misrepresent the legal status of a debt. Telling you that you will be arrested for an unpaid credit card balance is flatly illegal. Consumer debt is a civil matter, not a criminal one.
Contact With Other People
Collectors can contact your family, neighbors, or coworkers only to find your contact information, and they cannot reveal that you owe a debt in the process.
Disputing a Debt or Stopping Contact
You have 30 days from receiving the validation notice to dispute the debt in writing. Once you do, the collector has to stop all collection activity on the disputed amount until it sends you verification of the debt or a copy of a judgment.1Consumer Financial Protection Bureau. What Information Does a Debt Collector Have to Give Me About a Debt You can also ask, in the same 30-day window, for the name and address of the original creditor.2eCFR. 12 CFR 1006.34 – Validation Information
Miss the 30-day deadline and the collector can legally treat the debt as valid. You can still raise defenses if they sue, but you lose the leverage of forcing them to pause and prove the debt before going any further.
A separate tool is the cease-communication letter. Write to the collector and tell them to stop contacting you, and after they receive it they can only reach out to confirm they will stop or to notify you of a specific action, such as filing a lawsuit.3Consumer Financial Protection Bureau. When and How Often Can a Debt Collector Call Me on the Phone The letter stops the calls. It does not erase the debt, and it does not stop a lawsuit.
How Long a Collector Has to Sue You
Indiana’s statute of limitations sets a deadline for filing a collection lawsuit. Once it runs out, the debt is “time-barred” and a court should dismiss a late-filed suit.
- Six years for written contracts for the payment of money, including most credit card agreements, personal loans, and promissory notes. Oral agreements and open accounts also fall in the six-year window.7Indiana General Assembly. Indiana Code 34-11-2-11 – Written Contract Actions
- Ten years for written contracts not for the payment of money, including most mortgage agreements and deeds of trust.7Indiana General Assembly. Indiana Code 34-11-2-11 – Written Contract Actions
- Twenty years for court judgments. Once a creditor wins a judgment, it stays enforceable for two decades.8Indiana General Assembly. Indiana Code 34-11-2-12 – Satisfaction of Judgment After Twenty Years
A time-barred debt does not disappear. Collectors can still contact you about it, and here is where people get burned: making even a small payment on an old debt, or acknowledging in writing that you owe it, can restart the Indiana statute of limitations. A twenty-dollar “good faith” payment on a seven-year-old credit card balance can hand the collector a fresh six-year window to sue. If a caller is pressing you about something that sounds very old, do not agree to pay anything or confirm the debt is yours until you have figured out whether the deadline has already passed.
What Collectors Can Take If They Win
A collector who sues and wins can garnish your wages, levy your bank account, and put liens on property. Indiana law limits how far that goes.
Wage Garnishment Caps
Garnishment is capped at the lesser of two numbers: 25 percent of your disposable earnings for the week, or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage.9Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment “Disposable earnings” means what is left after legally required deductions like taxes and Social Security. Voluntary deductions, such as health insurance or 401(k) contributions, do not count.
At the current federal minimum wage of $7.25 per hour, 30 times that is $217.50 per week. If your weekly disposable earnings are below that, nothing can be garnished. Indiana also lets you ask a court to reduce the garnishment below 25 percent, down to a floor of 10 percent, if you can show good cause.9Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment
Income That Cannot Be Touched
Some income is completely off-limits to a judgment creditor. Social Security benefits are generally exempt under federal law, with narrow exceptions for federal tax debts and child support.10Social Security Administration. SSR 79-4 – Levy and Garnishment of Benefits Indiana adds unemployment compensation, workers’ compensation, veterans’ benefits, and railroad retirement benefits to the exempt list. Child support withholding orders take priority over civil garnishment, so a collector only reaches what is left after support is satisfied.9Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment
Property Exemptions
Indiana shields some property from seizure too. The homestead exemption protects up to $22,750 per person in equity in your primary residence. Non-residential real estate and tangible personal property are exempt up to $12,100 per person. Pensions, IRAs, 401(k) plans, health savings accounts, and medical care accounts are generally protected. Cash in a bank account gets much thinner coverage: only $450 per person, which means a judgment creditor can freeze and seize most of a bank balance.
Judgment Interest and Duration
Once a judgment is entered, interest starts running at the rate set in the original contract, up to a maximum of 8 percent per year. If there was no contract rate, the default is also 8 percent.11Indiana General Assembly. Indiana Code 24-4.6-1-101 On a $5,000 judgment that is $400 a year in interest alone. The judgment itself stays enforceable for twenty years, and interest compounds that whole time.8Indiana General Assembly. Indiana Code 34-11-2-12 – Satisfaction of Judgment After Twenty Years Ignoring a collection lawsuit is one of the most expensive mistakes you can make. If you do not respond, the collector gets a default judgment and the enforcement tools open up.
What Bankruptcy Does to Collection
Filing for bankruptcy triggers an automatic stay that stops most collection activity the moment the petition is filed. Calls, letters, lawsuits, wage garnishments, and bank levies all halt.12Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay A collector who keeps calling or garnishing after being notified of the stay can face fines and damages.
The stay has limits. If a prior bankruptcy was dismissed within the past year, the stay in a new case may last only 30 days, or may not apply at all without a court order. Some creditors, including those pursuing child support, can continue collection despite the stay.13United States Bankruptcy Court. FAQ – Automatic Stay and Debtor Protection Student loans, most tax debts, and child support typically survive bankruptcy regardless of which chapter you file.
If a Collector Breaks the Rules
You have real options when a collector crosses the line.
Suing Under the FDCPA
You can sue a debt collector in federal or state court for FDCPA violations. If you win, a court can award actual damages (lost wages, emotional distress costs, bank fees caused by the violation), statutory damages up to $1,000 per lawsuit, and your attorney’s fees and court costs. The $1,000 cap is per lawsuit, not per violation, so even a dozen rule breaks in one case max out at $1,000 in statutory damages. Class actions go higher: up to $500,000 or 1 percent of the collector’s net worth, whichever is less.14Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability
The attorney’s fee provision is the real teeth of the FDCPA. Because collectors must pay your legal fees if you win, many consumer attorneys take these cases on contingency. You usually do not need money upfront to bring a claim.
Indiana State Remedies
Under Indiana’s Deceptive Consumer Sales Act, the Attorney General can seek civil penalties of up to $1,000 per consumer for knowing violations tied to debt collection.15Indiana General Assembly. Indiana Code 24-5-0.5-4 – Actions and Proceedings, Damages A collector can defend by showing the violation was unintentional and resulted from a genuine error despite reasonable compliance procedures.
Where to File a Complaint
Collection agencies in Indiana are regulated by the Indiana Secretary of State’s Securities Division, which investigates complaints and takes enforcement action against licensed collectors who violate state law.16Indiana Secretary of State. Collection Agencies The Indiana Attorney General’s Consumer Protection Division also mediates and investigates consumer complaints and can sue companies that violate the Deceptive Consumer Sales Act.17Indiana Attorney General. Consumer Protection Division For federal violations, you can file at consumerfinance.gov with the CFPB. Filing with more than one agency is worth doing. Regulators track complaint patterns, and a single complaint can trigger an investigation that helps other consumers facing the same collector.