Debt collection laws in Indiana come from two directions at once: the federal Fair Debt Collection Practices Act and its CFPB rules on the one hand, and Indiana’s licensing statute, Deceptive Consumer Sales Act, and garnishment code on the other. Together they control when a collector can call you, what it must tell you in writing, how much of your paycheck it can take after winning in court, and how long it has to sue in the first place. If a collector breaks those rules, you can dispute the debt, complain to state and federal regulators, and sue for damages and attorney’s fees.
What a Collector Must Send You First
Before a collector can lean on you for payment, federal law requires a written validation notice. It has to come with the collector’s first communication or arrive within five days after it.1Consumer Financial Protection Bureau. What Information Does a Debt Collector Have to Give Me About a Debt Under the CFPB’s Regulation F, that notice must identify the collector by name and mailing address and say the message is from a debt collector, name the creditor who owned the debt on the itemization date and the creditor who owns it now, show the balance as of the itemization date along with an itemization of interest, fees, payments, and credits since then, give the current total, list the account number if there is one, and state a specific end date for your 30-day dispute period.2eCFR. 12 CFR 1006.34 – Validation Information
If you never got a validation notice, or the one you got was missing key details, the collector already has a compliance problem. Keep the envelope and the letter. Both matter if the dispute escalates.
What Collectors Cannot Do
The FDCPA and Indiana’s licensing rules draw hard lines around collector behavior. A handful of restrictions come up most often.
Call Times and Frequency
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 caps calls at seven per seven consecutive days about the same debt, 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 Those limits run per debt, so a collector handling two of your accounts could technically place fourteen calls in a week, but going past the per-debt cap creates a presumption of harassment.
Harassment, Threats, and Lies
Threats of violence, profane language, and repeated calls meant to annoy are illegal.5Federal Trade Commission. Fair Debt Collection Practices Act So are false statements: a collector cannot inflate the balance, pose as an attorney or government official, threaten legal action it doesn’t plan to take, or misrepresent the status of the debt. Telling you that you’ll be arrested for an unpaid credit card bill is flatly illegal. Consumer debt is a civil matter, not criminal.
Where and Who They Can Contact
Collectors cannot contact you at work once they know your employer prohibits personal calls. If you tell a collector that a particular time or method of communication is inconvenient, it has to stop using it.6Consumer Financial Protection Bureau. 12 CFR 1006.6 – Communications in Connection With Debt Collection Contact with family, neighbors, or coworkers is limited to locating you and must not reveal that you owe a debt.
Disputing the Debt and Stopping the Calls
You have 30 days from receiving the validation notice to dispute the debt in writing. Once you do, the collector must 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 request the name and address of the original creditor within that same 30-day window.2eCFR. 12 CFR 1006.34 – Validation Information
Miss the 30 days and the collector can treat the debt as valid. You don’t lose your defenses if you get sued later, but you lose the leverage of forcing the collector to pause and prove up the debt.
Separately, you can send a written cease-communication letter. After receiving it, the collector can only contact you to confirm it will stop, or to notify you of a specific action such as a lawsuit.3Consumer Financial Protection Bureau. When and How Often Can a Debt Collector Call Me on the Phone The calls stop. The debt doesn’t. The collector can still sue.
How Old Is Too Old: Indiana’s Statute of Limitations
Indiana’s statute of limitations sets a deadline for the creditor to file suit. Once it runs, the debt is time-barred and a court should dismiss any lawsuit filed after the deadline.
- 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 fall in the same 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 mortgages 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 against you, it stays enforceable for two decades.8Indiana General Assembly. Indiana Code 34-11-2-12 – Satisfaction of Judgment After Twenty Years
Time-barred does not mean gone. A collector can still contact you about an old debt, and here is where people get burned. Making a small payment on an old debt, or acknowledging in writing that you owe it, can restart the clock in Indiana. A $20 “good faith” payment on a seven-year-old credit card balance could give the collector a fresh six-year window to sue. If a collector surfaces an old account, don’t pay anything and don’t confirm the debt is yours until you know whether the statute has expired.
If You’re Sued and Lose: Garnishment and Judgment Rules
Ignoring a collection lawsuit is one of the most expensive mistakes a consumer can make. If you don’t respond, the collector gets a default judgment, and the tools available to collect become far more aggressive.
Wage Garnishment Caps
Indiana caps garnishment at the lesser of two amounts: 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. Disposable earnings are what’s left after legally required deductions like taxes and Social Security; voluntary deductions for health insurance or retirement contributions don’t 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 $217.50, they cannot be garnished at all. You can also ask an Indiana court to reduce the garnishment below 25 percent, down to a floor of 10 percent, for good cause.9Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment
Income That Can’t Be Touched
Some income is off-limits to collectors enforcing a consumer judgment. Social Security benefits are generally exempt from garnishment 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 as fully exempt. Child support withholding takes priority over a civil garnishment, so a collector only reaches what’s left after support is paid.9Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment
Property Exemptions
Indiana shields certain property from seizure. 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. Retirement accounts, including pensions, IRAs, and 401(k) plans, are generally exempt, and health savings accounts and medical care accounts receive full protection. Intangible property, like cash in a bank account, has a very low exemption of $450 per person, which means a judgment creditor can freeze and seize most of a bank balance.
Interest Keeps Running
Interest starts accruing on a judgment from the date it’s entered. Indiana sets the post-judgment rate at the rate specified in the original contract, capped at 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’s $400 a year in interest alone, compounding across the 20 years the judgment is enforceable.8Indiana General Assembly. Indiana Code 34-11-2-12 – Satisfaction of Judgment After Twenty Years
What You Can Recover If a Collector Broke the Rules
You can sue a debt collector in federal or state court for FDCPA violations. A win gets you three things: any actual harm you suffered, such as lost wages, emotional distress costs, or 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 violations top out at $1,000 in statutory damages in an individual case. Class actions can reach $500,000 or 1 percent of the collector’s net worth, whichever is less.12Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability
The attorney’s fee provision is the real teeth of the statute. Because a losing collector pays your legal fees, many consumer attorneys take these cases on contingency, and you don’t need money upfront to bring a claim.
Under Indiana’s Deceptive Consumer Sales Act, the Attorney General can pursue civil penalties of up to $1,000 per affected consumer for knowing violations tied to debt collection.13Indiana 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 operating in Indiana must be licensed, and the Indiana Secretary of State’s Securities Division regulates them under Indiana Code Title 25, Article 11. The Division investigates complaints and takes enforcement action when collectors violate state law.14Indiana Secretary of State. Collection Agencies
The Indiana Attorney General’s Consumer Protection Division mediates and investigates consumer complaints and can take legal action on behalf of the state against companies that violate the Deceptive Consumer Sales Act.15Indiana Attorney General. Consumer Protection Division For federal violations, submit a complaint through the CFPB at consumerfinance.gov. Filing with more than one agency is worthwhile. Regulators track complaint patterns, and a single filing can trigger an investigation that helps other consumers dealing with the same collector.