Indiana judgment laws give a winning creditor real power: a money judgment automatically becomes a ten-year lien on any real property you own in the county where it’s entered, and the creditor can garnish your wages, levy your bank accounts, and ask the court to force you to disclose your assets under oath.1Indiana General Assembly. Indiana Code 34-55-9-2 – Liens Upon Real Estate and Chattels Real At the same time, Indiana caps how much of your paycheck can be taken, shields certain property from execution, and gives you specific ways to challenge or reduce what a creditor collects.
What a Judgment Lets a Creditor Do
Once a court enters a money judgment, the creditor has several tools. Indiana Code 34-55-1-7 authorizes writs of execution, which direct the sheriff to seize your non-exempt property and sell it at auction, with the proceeds applied to the judgment.2Indiana General Assembly. Indiana Code 34-55-1-7 – Execution Requirements In practice, execution against personal property often yields little because most household items fall within Indiana’s exemptions.
The more effective tools are wage garnishment and bank levies. Both require court orders, and both are subject to legal limits. A creditor who doesn’t know what you own can also file a verified motion for proceedings supplemental under Trial Rule 69(E), which forces you to appear in court and answer questions under oath about your income, accounts, and property.3Indiana Rules of Trial Procedure. Rule 69 – Execution, Proceedings Supplemental to Execution, Foreclosure Sales The creditor can also name your bank or employer as a garnishee and require them to disclose what they hold for you.
Skipping a proceedings supplemental hearing after proper service is dangerous. The court can issue a rule to show cause and hold you in contempt, imposing fines, jail time, or both.4Indiana Judicial Branch. Indiana Contempt Procedure Benchcard If you’re served, show up.
Wage Garnishment Limits
Indiana caps what a creditor can take from a paycheck at the lesser of two figures: twenty-five percent of your disposable earnings for the week, or the amount by which your weekly disposable earnings exceed thirty times the federal minimum hourly wage.5Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment “Disposable earnings” means what’s left after legally required deductions like taxes and Social Security. Voluntary deductions for health insurance, retirement contributions, and similar items don’t count.
Indiana offers something most states don’t. You can petition the court to reduce the garnishment to as low as ten percent of disposable earnings by showing good cause why the standard twenty-five percent creates undue hardship.5Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment The federal Consumer Credit Protection Act sets the twenty-five percent figure as a nationwide ceiling, so no state can allow more.6Office of the Law Revision Counsel. 15 U.S. Code 1673 – Restriction on Garnishment
Child support garnishments follow different rules. The cap rises to fifty percent of disposable earnings if you support another spouse or child, and sixty percent if you don’t. Each figure increases by another five percent when the support obligation is more than twelve weeks overdue.5Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment
Bank Account Levies and Federal Benefit Protection
When a creditor obtains a garnishment order against a bank account, the bank places a hold on your funds. Indiana law requires the court to schedule a hearing promptly, generally no later than five business days after you submit a request, so you can challenge the hold or claim exemptions.7Indiana General Assembly. Indiana Code 28-9-3-5 – Garnishment of Deposit Account; Notice Requirements
Federal benefits get automatic protection. Under 31 CFR Part 212, the bank must review your account for federal benefit payments (Social Security, VA benefits, and similar deposits) made during the prior two months. Any amount traceable to those deposits is shielded from the garnishment order without any action on your part.8Electronic Code of Federal Regulations. 31 CFR Appendix C to Part 212 – Examples of the Lookback Period and Protected Amount If those funds have been mixed with other money, the protected amount equals the total federal deposits during the lookback period, as long as the account balance is at least that high.
Judgment Liens on Real Property
Every final Indiana money judgment automatically becomes a lien on real property you own in the county where the judgment is entered and indexed in the judgment docket. The lien lasts ten years from the date of the judgment, pausing during any period the creditor was prevented from enforcing it by an appeal, injunction, or your death.1Indiana General Assembly. Indiana Code 34-55-9-2 – Liens Upon Real Estate and Chattels Real
The lien only reaches property in the county where the judgment is docketed. If you own real estate in another Indiana county, the creditor must file a transcript of the judgment in that county to create a lien there.9Indiana General Assembly. Indiana Code 34-35-7-2 – Judgment for Cost; Recording; Lien The practical effect is heavy. Title companies flag the lien during a title search, and selling or refinancing without paying it off is nearly impossible.
Interest That Piles On While Unpaid
Post-judgment interest accrues from the date the court enters the judgment until it’s paid in full. The rate depends on the underlying obligation:
- Contract cases: Interest runs at the rate in the original contract, capped at eight percent per year, even if the contract charged a higher rate before judgment.
- Non-contract cases: Interest accrues at eight percent per year.
On a $50,000 judgment, eight percent adds $4,000 a year. Combined with collection costs and attorney fees, the balance grows quickly when payment is delayed. Prejudgment interest is calculated separately. When a court awards it, the rate is set between six and ten percent per year.11Indiana General Assembly. Indiana Code 34-51-4-9 – Rate of Prejudgment Interest
How Long a Judgment Stays Enforceable
An Indiana judgment remains directly enforceable through standard execution for ten years. After that window closes, the judgment doesn’t disappear, but collecting on it becomes harder. The creditor must petition the court for leave to issue execution, provide at least ten days’ personal notice to you, and prove under oath that all or part of the judgment remains unpaid.12Indiana General Assembly. Indiana Code 34-55-1-2 – Issuance After Lapse of Ten Years If you can’t be found, the court can authorize service by publication. An old judgment does not automatically expire just because ten years have passed.
Property a Creditor Can’t Touch
Indiana shields certain property from execution so debtors aren’t left destitute. Under Indiana Code 34-55-10-2, exempt property includes a homestead exemption, personal property protections, and a vehicle exemption. These exemptions apply to most judgments, but they generally don’t block collection of child support, tax debts, or liens you voluntarily agreed to, such as a mortgage.
Retirement accounts receive strong protection. Funds in 401(k) plans, IRAs, and similar qualified retirement accounts are typically shielded from judgment creditors under both federal and Indiana law, regardless of the account balance.
Federal benefits deposited into your bank account are protected under the two-month lookback rule described above, whether or not you file anything with the court.8Electronic Code of Federal Regulations. 31 CFR Appendix C to Part 212 – Examples of the Lookback Period and Protected Amount
How to Fight Back
The strongest defenses often turn on things that happened before the judgment ever landed.
Statute of Limitations
Indiana sets firm deadlines for filing suit. Once the clock runs out, you can move to dismiss. Common periods include:
- Two years: Personal injury, personal property damage, wrongful death, defamation, trespass, and professional malpractice.13Indiana General Assembly. Indiana Code 34-11-2-4 – Injury or Forfeiture of Penalty Actions
- Six years: Oral contracts, debt collection, fraud, and actions for use or profits of real property.14Indiana General Assembly. Indiana Code 34-11-2-7 – Six Year Limitation
The limitations period starts when the cause of action accrues, usually the date of the injury or the breach. This defense must be raised in your answer or it can be waived. Assuming the court will notice the timing problem on its own is a mistake that costs defendants cases they should have won.
Improper Service
Indiana Trial Rule 4 lays out specific methods for delivering the complaint and summons. If the plaintiff served you at the wrong address, used an unauthorized method, or never actually delivered the documents, the court lacks personal jurisdiction. A judgment entered without proper service can be set aside, forcing the plaintiff to start over. Default judgments in old debt cases often fail on service grounds when the debtor never received real notice.
Motion to Correct Error and Appeal
Losing at trial doesn’t end your options. Indiana Trial Rule 59 allows the losing party to file a motion to correct error, asking the trial court itself to reconsider based on newly discovered evidence, errors of law, or other grounds. If that motion is denied, or if you skip it, you can appeal.
Under Indiana Appellate Rule 9, the notice of appeal must be filed within thirty days after the final judgment is noted in the court’s case summary. When a motion to correct error was filed, the thirty-day clock starts when the court rules on that motion or when it’s deemed denied, whichever comes first.15Indiana Rules of Appellate Procedure. Rule 9 – Initiation of the Appeal Missing that deadline almost always kills the appeal, because courts treat it as jurisdictional.
Comparative Fault in Tort Cases
Indiana follows a modified comparative fault system for tort claims. Your recovery, or a plaintiff’s recovery against you, is reduced by their percentage of fault and eliminated entirely if they’re more than fifty percent at fault.
Getting the Judgment Cleared Once It’s Paid
When you pay a judgment in full, the creditor should endorse the satisfaction on the court record. Under Indiana Code 34-54-6-1, an endorsement of payment or release noted on the judgment record or on the execution operates as a formal satisfaction in favor of later purchasers and lienholders.16Indiana General Assembly. Indiana Code 34-54-6-1 – Satisfaction or Release of Judgments The satisfaction can be entered by the judgment creditor, their attorney of record, or an assignee whose assignment is noted on the record.
Confirm the satisfaction is actually filed. An unsatisfied judgment on the record continues to cloud your title to real property and will appear on background checks and title searches. If a creditor refuses to file a satisfaction after full payment, you may need to file a motion with the court to compel it.